Is LegalShield a Pyramid Scheme? Honest Review

LegalShield MLM Review

This post is an unbiased review of LegalShield MLM company that sells legal services via its direct sellers.

Let’s see an overview of LegalShield, where we will go through its company profile, products, MLM compensation plan, and then personal review.

Legal Shield
FounderJeff Bell
When Started2011
Head Office Ada Oklahoma, USA
Opportunity TypeMLM
ProductsLegal Service Plans
Joining Cost$29.95

What is LegalShield?

In 1969, Harland Stonecipher met a car accident and he was unable to find legal service at that moment. Hence in 1972, he started ‘The Sportsman’s Motor Club’ with the concept of ‘Legal expense reimbursement services’.

After 11 years of operation on the traditional model, in 1983 this company adopted the MLM model and rebooted it as Prepaid Legal.

It is traded publicly for a long time, as it is listed on NASDAQ in 1984 and on Newyork Stock Exchange in 1999.

In 2011 it became a private company when it was acquired by MidOcean Partners and they changed its name to LegalShield.

Jeff Bell is the current CEO of LegalShield.

legal shield founder

LegalShield developed an app that provides the ability to talk to a lawyer on any legal matter.

Similarweb stats show that most of the traffic to is from the United States (97.72%), Canada (1.19%), and India (0.20%).

LegalShield titles that they promote peace of mind and confidence in a world that is oftentimes uncaring and selfish.

LegalShield claims to provide 900+ lawyers for their law firms.

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LegalShield Joining Process

To get access to the LegalShield app one needs to purchase any suitable plan from this.

  • Individual & Family Plan: $29.95 per month
  • Small Business: $49 & up per month
  • Starting a Business: $145 + state filing fees

One can also customize their own plan for $14.95 per month.

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LegalShield Products

LegalShield provides many plans and services regarding legal services.

  • Personal Legal Advice
  • Contracts and documents reviewed
  • IRS audit assistance
  • Civil Trial Defense
  • Family services (divorce, adoption, seperation, name change)

Moreover, LegalShield also offers an ID shield, which is a service that helps prevent identity theft and restore it.

legal shield product

On, LegalShield customers mentioned that they receive very poor lawyer service and also titles that they just want to waste your time so you can pay more money on a monthly basis. We have discussed more about it ahead.

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LegalShield Compensation Plan

The following incomes in the LegalShield compensation plan are:

  1. Personal Sales Commission
  2. Overrides Commission
  3. Mama Bonus
  4. Breakways Bonus
  5. Platinum Breakaway Overrides
  6. Renewal Commission

1. Personal Sales Commission

When a LegalShield associate sells legal plan membership also called premium to any customer then receive personal Sales Commission. It highly depends on the rank and active downline.

The below table consists of LegalShield ranks, their requirements and this commission.

Whenever associates’ performance reaches to meet rank qualification requirement, then the possible Personal Sales Commissions is also shown in the last column.

Pipe “|” denotes 2 options of qualification requirements and the $ number is the membership sales amount from personal (mentioned below) or team members.

RankRequirementPersonal Sales Commission
Senior AssociatePersonal $180 | $90 + Recruit 1 Associate$135.04
ManagerPersonal $400 | $400 + 3 Legs having 1 active Associate$157.54
Senior ManagerPersonal $1,350 | $1,350 + 3 Legs having 1 active Senior Associate$180.05
DirectorPersonal $2,700 | $2,700 + 3 Legs having 1 active Manager in each$213.81
Senior DirectorQuality Director and $700 monthly sales (Max $400 from 1 leg)$258.82
Executive DirectorQuality Director and $1,400 monthly sales (Max $650 from 1 leg)$315.09

Personal Sales Commissions is counted advanced for a year, hence if customers don’t renew any premium, the commissions get reduced.

Senior Associate rank can be achieved within 20 days by selling $60 in premium + recruit 1 new Associate or personally selling $180 membership.

Other than the above-mentioned, there are other higher ranks in LegalShield, whose proper data is not available.

2. Override Commission

Associates earn override when their downline team brings new associates.

Override Bonus is from 2 generations deep downline. For example, if a Director recruits a new associate then the first preceding Senior Director or higher ranked associate in upline will get the override bonus for recruitment.

The rank of recruiting associate and upline who gets this commission (in orange color) decides the amount of this bonus. The below chart shows the cumulative override bonus.

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3. Mama Bonus

Associates need to personally purchase at least a $100 membership to be eligible for Mama Bonus.

It offers an additional override of $3.38 for the first year and $0.24 on renewals on membership sold by personally enrolled associates.

4. Breakways Bonus

Breakaways Income is only for Director and Executive Director ranked associates. For eligibility, It requires to sell at least $500 membership in the previous month (personal and downline both included, max $300 from on leg).

The above criteria need to be fulfilled after completing 12 months being as an associate.

Breakaways Income is given to 5 breakaways points. This income is separate for Directors and Executive Directors (ED).

LegalShild MLM Plan

1 Breakaway point means the presence of the first preceding Director/Executive Director in upline.

When a Director/Executive Director ranked associate makes a membership sell, the first 5 upline Director/Executive Directors get this bonus.

For qualified Directors and Executive Directors, this bonus at different breakaways points is as follows.

  • Director 1 Breakway: $5.63
  • Director 2 Breakway: $3.38
  • Director 3 Breakway: $2.25
  • Director 4 Breakway: $1.13
  • Director 5 Breakway: $1.13
  • Executive Director 1 Breakway: $14.63
  • Executive Director 2 Breakway: $7.88
  • Executive Director 3 Breakway: $5.63
  • Executive Director 4 Breakway: $2.25
  • Executive Director 5 Breakway: $2.25

5. Platinum Breakaway Overrides

This is an additional bonus on Breakaways Bonus for Platinium or above ranked associates.

They get $3.38, $2.25 and $1.13 extra from membership sales in the first three-generation respectively.

6. Renewal Commission

Above incomes are only given for a year on active renewal. But after 1 year of active renewals, only this income is offered.

This income is based on Persistency Level and rank associates accomplished.

Persistency Level is the percentage of active memberships after 12 months from purchase. If you sell 10 membership in the first month of joining and only 4 membership remains active after 12 months, then your Persistency Level will be 40%.

The below chart shows rewards on each active membership after 1 year based on rank and the persistency level.

legalshield renewal income

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To Be Concluded

This was all about the LegalShield MLM compensation plan. Before ending this post, here are some facts and our opinion we want you to know before becoming its associate or buying a membership.

Is LegalShield a Scam?

No, LegalShield is not a scam as per its business model. LegalShield is selling legal services using the direct selling concept.

Associates are paid based on personal and downline sales. It is not a money circulation like Ponzi or pyramid scheme, as the customer pays for legal services.

In September 2011, LegalShield rebranded from Prepaid Legal. Compared to 2009, in 2010 decrement of 25.6% in new associate enrollment and 11.5% in new membership sales, was considered the main reason behind it.

The psychological effect of the “pre-paid” term affects consumer buying behaviour and people don’t want to pre-pay. Hence parent company, MidOcean partner just changed the name and not the business structure.

Tricky Compensation Plan

Considering services as products, its compensation plan is also tough to understand. We got 4 page PDF explaining ranks and all incomes. While higher ranks are not explained in the compensation plan PDF.

All incomes are written in an extremely succinct manner, so one can’t understand without an explainer making it less possible to succeed in MLM.

It has a few incomes and shown commission figures sincerely, which makes LegalShield’s compensation plan more transparent than most MLMs.

Unique and Questionable Services

There are thousands of direct selling companies operating globally, but LegalShield has quite unique products.

Prepaid legal services providers and MLM companies using different services as products both exist, but using legal services as MLM product is a new thing for me.

Many are sceptical about the prepaid legal service concept and stuck on a question, is it worth buying prepaid legal service?

There is a long debate on it. Prepaid Legal services are as insurance, which you can avail of if some mishap goes.

But, you can get an attorney after getting in legal trouble, which is not feasible with insurance. You can’t buy health insurance and use it at the time when you are sick, but for legal service it is possible.

LegalShield can be useful for small business owners or individuals for short consultations who can’t afford expensive attorneys. LegalShield membership offers limited legal services and you will need to hire an attorney and pay for serious matters.

Most reviews denote, LegalShield only provides general legal suggestions and does not fully protect you legally.

There are different state laws, therefore who will be your attorney and their expertise is another subject of concern.

Individuals need to do personal level research to understand LegalShield membership’s actual advantages.

Should I Join LegalShield?

This decision is completely up to you. LegalShield has unique products from most MLM companies, but same time there is a doubt of reliability. Also, you need to learn specific MLM skills to sell such unique products.

MLM has a bad reputation, so individuals need to put extra effort into marketing.

Like most MLM companies, it also has less success rate. It will take around 2 to 3 years to build a strong downline and earn a decent regular commission.

Hope this post helped you to make a wise decision.

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