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Pre-Paid Legal Services Inc.

posted on:  5/17/2006     revised: 3/9/2010

 

The following letter could have been appropriately titled: "There is Still a Sucker Born Every Minute".

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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Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved.