| Letter to Shareholders -
No. 8 - From Harland C. Stonecipher - Date: May 16, 2006
Recent negative publicity
about us is but another example of what we have endured
since becoming the target of a short attack five and a
half years ago. Since then we have communicated directly
with you several times to help you better understand
what was taking place. By addressing the negative points
brought up, we would like to bring you up-to-date on
what we have been doing and where we are headed.
Rereading the previous seven letters to shareholders
will give you an even better understanding of what we
have accomplished.
The recent negative
publicity addresses the lawsuits we have had to contend
with, questions the value of our membership, seems to
indicate that we may have regulatory problems, questions
the viability of our business based on how long our
members remain members, and suggests we are more
interested in building a sales force than in delivering
our product.
How Has Pre-Paid Legal
Services Faired While Under An Extraordinarily Severe
Short Attack That Has Lasted Five and A Half Years?
Pre-Paid Legal Services,
a 34-year-old company headquartered in Ada, Oklahoma,
selling a one-of-a-kind legal membership product has
been subjected to an extraordinarily severe
five-and-a-half-year short attack via lawsuits without
merit and in the media. While, understandably, we were
totally unprepared for a short attack, we seem to be
rather fast learners.
We had some rock-solid
assets to rely on-a management team that has been with
us for an average of 171/2 years, some 850 seasoned
employees in Ada and elsewhere in Oklahoma, a long-time
association with 38 fine law firms, a great many
seasoned sales associates and field leadership, and an
unusual number of seasoned shareholder partners who have
stuck by us. While the short attack slowed our growth,
it certainly did not stop it. In fact, we seem to be
winning. We managed to grow our membership revenues
approximately 10% a year. Our membership base grew 7% a
year to 1.5 million members. In addition, we introduced
a new identity theft membership product which now has
540,000 members.
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