Friday, February 13, 2009

Pre-Paid Legal Earnings Plans

One of the first decision you make when signing up to be an Independent Associate of Pre-Paid Legal Services, Inc., is whether you'd like your earned commissions calculated over a one year or three year basis.

For those who have been in other MLMs, the idea of "advanced" commissions might be new to them and a bit confusing. I'm guessing that PPLSI realized that earning $2.80 a month on a sale wouldn't be very motivating and decided to advance the whole commission, let's say $100 for example, so that the Associate would have more funds with which to expand their business. Sound good? You betcha! Hey, I just sold a $26 a month plan and I got $100 deposited the next day in my personal checking account! Woo-hoo!

Oops. Rent was due or that money went to pay some other bill and the person you sold a Membership to decided to cancel it the following month after having made only two payments. Yeah, so what? Well, PPLSI is going to want the money back they advanced to you. Oh.

Folks, those "advanced" commissions are actually loans! Says so on the back of the Associate Application, the part hardly anyone reads. You have now incurred a "chargeback". Since you didn't earn much of what was advanced to you, you now owe the unearned portion back. Well, how much is that?

The two offered Earnings Plans, 1 year & 3 year, operate a little differently. What is the same is the amount that PPLSI advanced to you, which in our example is $100. In the one year plan you opted to "earn" your $100 commission over 12 equal installments, or $8.33 a month. So after 2 payments you have earned $16.66 and will be charged back $83.34.

The three year plan works similarly, only the monthly amount is one third as much, or $2.78. After two monthly payments you will have earned $5.56 and be charged back $47.22.

Huh? What happens to the other $47.22 (for total of $94.44) of the advanced, unearned commission?

Winner! You get to keep it! Your total earnings from that $100 advance commission are now $52.78. And you can spend it on whatever you want!

OK, so it's a no-brainer to take the 3 year earnings plan over the 1 year earnings plan, right? In fact, if the person you sold the membership to, or someone that anyone on your team for which you earn override bonuses, drops out in months 1-7, you earn more commission on the 3 year plan than the 1 year plan.

So where's the downside? Well, if most of the people for which you are earning a commission or override bonus stay in the program for longer than 7 months, your long-term commissions will be higher if they end up canceling their PPLSI membership before the 36th month. This is due to the fact that under the 1 year earnings plan you have earned your full commission after the 12th payment and there is no possibility of a chargeback at that point, but under the 3 year earnings plan you could incur a chargeback at any time up until the 36th month.

Just to muddy the water even more, there is another option: Opt to get paid on an "as-earned" basis. Send a request in writing to PPLSI and you will only be paid as you earn a commission and avoid chargebacks altogether. I was surprised to learn from a PPLSI Customer Service Rep that almost 50% of new Associates choose this option! I can see why I would consider it, but I'm not certain if there is a regulatory reason in some jurisdictions that might be the cause of such a high rate.

And a couple of other factors that relate to this choice: You can only change your earnings plan once in any 12 month period of time. (I haven't seen any documentation that indicates how such a change would impact existing memberships that you are earning on.) Also, once you reach the Executive Director level (which is the key level that all Associates should be striving to attain at a minimum) you incur only a 50% chargeback on even the 1 year earnings plan!

Why is PPLSI doing this? I think it's because they are aware of the massive dropout in MLMs during the first 3-6 months and figured out a way to ease the pain to their more active and favored Associates, the Executive Directors and higher ranks. In fact, it's a pretty sweet deal if you sign up a bunch of people who quit after 1-3 months! You are paid virtually all of the money that the quitting member paid to PPLSI and sometimes more. This IS the sweet spot in the compensation plan.

Example: You are an Executive Director and you sign up a new member for the $26 Extended Plan. They pay the $26 one time, along with the $10 fee, for a total of $36, then they cancel. You were paid $182.50 and are on the 1 year earnings plan. Your chargeback would be $182.50 x (11/12) / 2 = $83.65, meaning that you got to keep $98.85...and the member only paid $36!

I suspect that this is the reasoning behind my mom and my brother being told by Ryan that they should start off on the 3 year earnings plan and switch after 6 months, which makes sense if they have achieved Executive Director status by then. Silly me, I just like knowing the "why" behind the suggestion!

Of course, there is always the possibility that I'm mistaken, especially as I'm not yet a member or Associate and I don't have the full info packet yet.

And there are other considerations that come into the decision about earnings plans, like renewals.

I'll edit this post as necessary to reflect the most accurate info I can find.

Next up will be my examination of the $249 Fast Start option.

Thursday, February 12, 2009

Policies and Procedures

As is customary with MLM Distributor Applications, there are company Policies and Procedures on the back of the Pre-Paid Legal Associate Application. Yes, I'm that 1 in a 100 person that actually reads them, although every applicant signs that they have read them. One might even draw the cynical conclusion that if you have an Applicant read the Policies and Procedures you don't want to work with them. Too analytical!

Go figure...Pre-Paid Legal's P & P are full of more legalese than most I have read, as I guess they have more access to attorneys than most MLMs. Regardless, I did find one clause to be unusual and a bit disturbing:

13) Advance commissions for sales produced by the Associate or in the Associate's downline shall be paid only when sales of PPLSI products/services have occurred, and shall be earned only as fees on PPLSI products/services are received by PPLSI. PPLSI reserves the right to change commission advance rates, adjust advances for membership cancellations, pay commissions on as as-earned basis or to place commissions on hold in its sole discretion. Any sums advanced to the Associate shall create a debit balance which will be a loan to the Associate from PPLSI. This balance will normally be repaid by withholding earned commissions, including renewals, but the Associate is ultimately liable for repayment upon demand by PPLSI. An Associate may request commissions be paid on less than a 100% advance basis. Advance commissions are made in connection with the business of selling PPLSI products or services and the Associate agrees that advance commissions are for business purposes and are not a loan for the Associate's personal, family or household purposes. (Bolding added.)

Well, the last line of that clause helps me make a decision! I'll go with the option, which must be in writing, to only be paid commissions as they are earned.

Smart move for anyone else? Probably not, as I'm sure that over 90% of the active Associates just spend their advanced, unearned commissions on whatever they please. And it also means that I might be losing out on a source of income that takes advantage of the huge 3-6 month fallout rate in most MLMs. More next time on the 1 year versus 3 year Earnings Plan.

Tuesday, February 10, 2009

Signing Up...Almost

While I made the decision to sign up as an Independent Associate of Pre-Paid Legal a couple of weeks ago, I've been busy with work projects and have been waiting for a few things before I proceeded.

So I went to Mark's Pre-Paid Legal website and had to figure out what to do next. There are links on the right hand side of the page to:

"Family Legal Service Plans
Business Opportunity
Identity Theft Shield
Legal Forms iPlan
Insurance & Financial Professionals"

These pages provide additional info about Pre-Paid Legal and their services. Yet, I was looking to sign up, not get any additional info at this stage.

Down near the bottom of the page on the left hand side are two links:
"Become an Independent Sales Associate" and "Enroll Now", the latter of which is for enrolling as a member.

I clicked on the link for becoming an Independent Associate, filled out a couple of pages of forms (which I'll cover in later posts), and was greeted with a message indicating that my application was already in the system. This is the message I had received previously and so I was confused as to why I was getting it now, as I had attributed it to using FireFox instead of Internet Explorer. A phone number for Marketing Services was provided (580-436-7424) and I called up to try and figure out what was going on. I talked to a Ann Marie, who was very helpful and told me that I had gotten that particular message because I had previously signed up as an Independent Associate in 2002.

Huh? I knew that my mom had signed up back then, but couldn't recall my having done so, too. Turns out that I hadn't signed up for a membership plan and now I vaguely remember $15 being deducted from my bank account or something like that. Unfortunately, in order to reinstate my Independent Associate status I would have to fill out a hard copy form and mail it in. And while I could sign up for a Membership online, Ann Marie suggested sending both applications in at the same time.

So, later in the day I dropped by my mom's house and picked up a couple of forms (with lots of boxes to fill in) and brought them home. I'll fill them out and mail them in (when's the last time I used a postage stamp?) and once they arrive at Pre-Paid Legal it will take up to 48 hours to process them.

Monday, February 9, 2009 9 Minute Video

I filled out the form at with contact info and now I've arrived at the 9 minute video. ('s the transcript:

"Congratulations on taking the next step toward a better life. Make sure that you view the video until the very end where I will be discuss what it is that you will be doing and how you'll get paid. Also, at the end of the video there is a short form for you to fill out. This will be your opportunity to tell us how to proceed with you, so if you express an interest, we'll put you at the very top of our priority list and we'll give you a call back.

So, the company is called Pre-Paid Legal Services, Incorporated. We're a 36 year old publicly traded company on the New York Stock Exchange. We've been featured in just about every major business journal out there, from Barron's, Fortune, Forbes, Business Week, Newsweek, The Wall Street Journal, Success Magazine, Success From Home, and many others. But most recently we were featured in Forbes Magazine, again, as one of the 200 Best Small Companies in America. So you can feel good about knowing that you will be working with a very reputable company.

The reason we have captured the interest of so many in the business community is because of our impressive track record. We've had 14 years of record breaking growth, finishing last year with a record of nearly half a billion dollars in revenue. That's billion with a "b". We've done well over the years, even through recessions, because of the need for our services. We have services that everyone needs, can afford, and virtually no competition. So, for the next few minutes I'll highlight those services--briefly--because if you don't see the value in our services, the odds are you won't make much money representing our company. On the other hand, if you do see the value in our services, you'll have a much greater chance of success.

Though we offer several valuable services, I'll cover our two most popular plans, our Life Events Legal Plan and our Identity Theft Shield. With our Life Events Legal Plan you'll have unlimited access to the best attorneys in the country for a very small monthly fee.

Think about this for a minute...have you ever been overcharged for a repair, ripped off, or treated unfairly? Have you ever wanted to know if you were right or wrong, or just wanted to know what your rights were on a given situation? Our members are entitled to phone consultation on unlimited number of issues. Imagine being able to pick up the phone, talk to an attorney as often as you needed, talk as long as you need to, on as many different issues that creep up in your life. And, if your attorney feels that writing a letter or making a phone call on your behalf will better your situation, they'll do so as a part of your membership. One letter or phone call per issue, on unlimited number of personal issues, and they'll even write one letter per year for your business.

Have you ever signed something that you wished you wouldn't have, like a cell phone or car purchase agreement, a gym membership or credit card application? As a Pre-Paid Legal Member you can have an attorney review all of your contracts and documents, up to 10 pages in length, included in the membership.

Seventy-five percent of Americans don't have an updated will. Are you one of them? Depending on where you live, wills can cost as much as $1000, and that's why most people don't have them, most families don't have an extra thousand dollars laying around the house. As a Pre-Paid Legal Member you can have your will done and updated every year you remain a member, at no additional charge. Wouldn't it be nice to get that done and not have to worry about it anymore?

As a Pre-Paid Legal Member you'll have access to all of these and many, many more legal services that I didn't mention, for a very small monthly fee.

As you know, Identity Theft is sweeping North America. Everybody knows about it, most people fear it, but very few know what to do about it. As a Member of our Identity Theft Shield, you and your spouse or significant other will have access to your credit report, as well as your credit score. We'll monitor your credit files on a daily basis and notify you should something look suspicious. And, if your identity is stolen, you'll be assigned a licensed investigator who will assist you every step of the way and attempt to put your life back together, the way it was before the thief took over. We're the only company in North America that can assist you before, during, and after an identity theft crisis. And we're the only company that can help you with all 5 types of id theft, including Financial, Character, Medical, Social Security, and Drivers License Identity Theft. Furthermore, our Identity Theft Shield is the only service that is connected to a Pre-Paid Legal Membership, because let's face it, if you have an identity theft issue, you also have a legal issue.

If our Life Events Legal Plan and Identity Theft Shield were a total of $100 a month, I think we can agree it would be a great deal, but it wouldn't be a good budget. It would compete with our cable bill, and you know, we wouldn't want to do that. At $50 a month this would be a no-brainer for a lot of people, but still $50 is a lot of money. So for $35.95 a month, month to month, with no long term commitment, you can have access to both of these services and put an umbrella protection around you and your family.

Unlike many of the other work-from-home opportunities we're not trying to push high-priced lotions, potions and pills on our friends, family and neighbors, that you can get at Walmart for a fraction of the cost. This is precisely why so many people have done so well marketing Pre-Paid Legal. Because we get paid real money for sharing real services, the likes of which are not available anywhere else. Now, should we feel that you are a good match for our company, what you'll actually be doing is simple, you simply put people in front of this information, that's it. If they buy our services from you, you get paid. It's that simple. If you can get people to watch this video, or one like it, you can succeed at this business. Pretty simple.

Now let's talk about how you get paid. If you were in real estate, would you want be a broker or an agent? A broker, right? Why? Because they make more money. And if you were a broker, how many agents would you want? As many as you can get, right? Why? Because in real estate, every time an agent moves a home, the agent makes money. But the broker also makes money. The money the broker gets is called an override and our compensation plan works in a similar way.

Every time you share our membership and collect $35.95 plus a one-time $10 enrollment fee, and send it to the company, you can earn as much as $34 all the way up to $252. As an illustration, let's say that you are somewhere in the middle of our compensation plan,and all you want to do is market 10 memberships a month, part time. That's as much as $1700 a month--which could be more than $20,000 a year--on a part time basis. Now if you want to be the equivalent of a broker, you can money from the efforts of your team, just like in real estate. Your overrides can range from $34 all the way up to $182 when someone on your team shares a membership. Again, let's say you're not at the top and not at the bottom, but somewhere in the middle. And let's say as an example that your team produced just 10 memberships a week. Your override is as much as $103 per membership, times 10 memberships, which is more than a thousand dollars a week in overrides. $1000 a week times 52 weeks in a year is more than $52,000. Again, working very part time. Add the $52,000 a year to the $20,000 you earn from your own efforts and you can see how you can generate a very respectable part or full time income. And that's based on you and your team just doing 10. What if you did 20, 30, 300, a thousand, or more? You can do the math and see how in 2007 approximately every 12 days a new family or individual starting earning a six-figure income working with our company.

Now, of course, your results may vary, but with the economy getting softer and softer, where else can you earn this type of income? And, we'll pay you daily, every day, Monday through Friday. Imagine submitting a membership on Monday morning and getting paid as early as Tuesday. Not to mention you can qualify to earn as much as $500 a month in car bonuses, as well as all-expenses paid trips to exotic places around the world, such as Cancun, the Bahamas, the Dominican Republic and others.

Now as good as everything sounds so far, it actually gets better. You couldn't be starting at a better time. History shows that when a new industry hits 2% market penetration, critical mass is achieved. Critical mass looks like this. It's when an idea goes from obscurity--nobody knows what you are talking about--to mainstream, a household name, in a very short period of time. We've used the example of health insurance.

In 1953 most people thought it was a dumb idea. Today, we'll put you in the oval office or keep you out, based upon your policy on health care. In 1953 health care was created and it took 10 years to find just 2% of the population to get it. But after that, it only took 7 years to reach a full 52% market penetration. Right now, Pre-Paid Legal is at about 2% nationwide. When do you want to position yourself to profit, here [video indicates point at very beginning of HMO time chart] when everybody thinks you are crazy, or here [video indicates point on chart where HMO reach 52% market penetration] where everybody already has it, or at least has heard about it, or do you want to get started right now, at the beginning stages of critical mass?

Now is the time to join Pre-Paid Legal Services. We have a 36 year old New York Stock Exchange. We have a service that everyone needs and most can afford, with virtually no competition. We pay every day, Monday through Friday. And we're poised for explosive growth.

Now, in just a moment, a form will come up on your computer screen. If you want to start getting paid daily and stabilize yourself in an unstable economy, fill out the form completely so we'll know how to proceed with you. If you express a high level of interest we'll put you on the top of our priority list and give you a call right away. And we'll introduce you to one or more of your Field Trainers and perhaps even your Success Coach.

If you're not interested in working with us, please let us know that, too, and we'll gladly scratch your name off our list and wish you luck.

Thanks again for your interest...and please complete the form.

Here it comes..."

After submitting your info and answers to some questions, you are taken to another page that begins with this image:

Then my contact info is listed:

Kent Vorkink
Your Success Coach

and this image:

Sunday, February 8, 2009

Although I haven't yet signed up as an Independent Associate, I was able to get my own landing page for capturing leads. My page is located at and launches a roughly 2 minute video clip when you arrive. (Note that case is important and all lower case won't get you to the right place.)

Here is the text of the video clip:

"I want to congratulate you for coming to this website to learn how you can start getting paid every day just for helping people. With the economy getting more and more unstable, responsible people all across North America are frantically searching for ways to earn additional income. Over the next 10 minutes we'll discuss 3 major challenges facing North America today, our solutions to those challenges, and how you can position yourself to profit.

The first thing we'll address is the current condition of our economy. The reality is things are tough for a lot of people. Expenses are escalating, consumer debt is at an all-time high, savings is at an all-time low, millions of people have lost their jobs or businesses, and record numbers of families have or are losing their homes, and millions more are just sitting around in a daze, feeling disoriented about the unknown challenges ahead. That's the bad news. The good news is we have an answer for this.

Identity theft is another issue plaguing our society. It's reached epidemic proportions and some are even calling it a pandemic. Experts suggest that it's not a matter of if your identity will be stolen, but rather, when your identity gets stolen, what are you going to do about it? And we have an answer for this as well.

And finally, the third challenge we will discuss is the legal system in this country. As good as it is, the American legal system is broken. From dead broke to Bill Gates, the average person in North America is earning $13 an hour, but the average is charging more than $200 an hour. So most people when they need legal help don't do anything about it because they find that it's cheaper just to get ripped off and taken advantage of than it is to consult with an attorney at $200-300 an hour. We've leveled the legal playing field in North America and have made access to justice accessible for almost everyone.

Fill out the form to your right to watch our 9 minute video so that you can start getting paid daily, Monday through Friday, by simply providing solutions to the three aforementioned issues."

The referenced form asks for Name, Email Address and Phone Number.

In the Beginning there was Pre-Paid Legal

My mother, Patricia Sheranian, recently renewed her membership with Pre-Paid Legal and is starting to recruit other individuals and businesses to be Independent Associates with the company. Naturally, she started with her immediate family, despite the fact that we've been pitched by her on bunches of MLMs in the past. My older brother, Mark Vorkink, signed up last week and I'll be signing up under him. Mom's excited about this venture, and at age 76, and with few other good options for earning an income, her being excited is a good thing.

Of course, she and I don't see eye to eye on many things as we have different personality types/temperaments, so I'll end up doing things my way as usual. I hope to chronicle some of the happenings with this Pre-Paid Legal adventure in this blog, in addition to providing "first look" insights to the opportunity itself.