Disclaimer: Here on bottlesoup.com, we review direct sales and MLM opportunities. No one at the blog works for LegalShield, sells LegalShield, or is associated with LegalShield in any way. This post is the opinion of the author and should not be taken in place of professional legal, professional financial, or professional medical advice.
Hey there! Welcome to the blog. If you’re a returning reader, you know the drill. If this is your first time visiting us, here’s what to expect. We publish reviews of direct sales and MLM companies, analyzing the opportunity to earn money.
Our free Direct Sales Calculator can help you do the math on your own.
Each of our direct sales/MLM analysis articles do the following:
- Define the opportunity
- Assess the compensation strategy
- Determine how the company pays its consultants
- Figures out how much of the product you must sell to earn the equivalent of a minimum wage job
What is LegalShield?
LegalShield is a pre-paid legal service. It’s a subscription-based model that offers legal services to its members. By signing up for the service, you have access to attorneys who can help with things like traffic tickets, estate planning, and other small legal issues.
The product is available for individuals and small business owners. And one of its new features is identity theft protection. This is a big selling point for the product.
Two arms of LegalShield
It’s important to know that LegalShield has two arms: the actual product that is available for individuals and small business owners (who can offer LegalShield as an employee benefit) and the direct sales arm, which provides an opportunity for income.
Becoming a LegalShield Associate
It’s easy to become an Associate. You simply sign up. Then you sell. Then you sign others up.
This formula is not unique to LegalShield. All direct sales companies and MLM companies operate this way.
Is LegalShield a pyramid scheme?
Technically, no. LegalShield is not a pyramid scheme. To technically (and legally) be defined as a pyramid scheme, the only way to make a profit is must be by recruiting others.
But wait, don’t you profit from recruiting others with LegalShield?
Yes, but it’s not the only way you profit. That is the distinction, and that’s what makes this “not” a pyramid scheme. Even if it has pyramid scheme attributes and allows pyramid-like profits.
In the direct sales world, if it looks like a pyramid scheme, walks like a pyramid scheme, and quacks like a pyramid scheme, it is not a pyramid scheme. Makes sense, right? (Of course not.)
How much does it cost to become a LegalShield Associate?
It costs $99 to start selling LegalShield.
But you’ll also need the LegalShield website to conduct transactions.
The year 1 cost of being a LegalShield Associate, at minimum, is $348.40.
That’s $99 for the starter kit, one-time $10 for the administration fee, and $19.95/month * 12 months for the eService website.
How can you earn money selling LegalShield?
Great question! Considering you want to start a business selling LegalShield, it helps to know how you’ll get compensated, right?
LegalShield Compensation Plan
It’s hard to get a sense of what the LegalShield compensation plan is. There are a few documents available to help you understand what you may make from renewals.
First, there’s this document that appears to show the commissions you’ll receive from selling a LegalShield plan.
Looks pretty straightforward, right? If you’re an Associate and you sell a plan, you can make between $14.96 – $60 per sale, right?
Yes, but read the fine print.
The compensation plan details matter
In this document, you can get a better understanding of the renewals payout by level. But you also need to read the disclaimers in the fine print, which are critically important.
If you read the fine print, you’ll see some interesting information:
- If someone cancels or stops paying for the membership, you will be billed for the remainder of the membership. Essentially, you only get to keep the commission of the used portion of the membership, which makes sense, but since you are paid the commission upfront, you are left with a bill against future commissions.
- If you sell a membership but the person never pays for it, you will be charged a $35 “non-taken fee”.
If all goes well, how much can you make selling LegalShield?
Assuming that no one cancels their membership, you can make between $14.96 – $60 per sale at the Associate level, before tax.
How many LegalShield memberships do you need to sell to earn the equivalent of minimum wage?
Although the opportunity is “limitless,” it helps to start somewhere. For the purposes of this example, we’re going to assume that you can sell the highest level of coverage to every customer. You’ll earn a $60 commission per sale.
The current federal minimum wage is $7.25.
For simplicity, we’re not going to consider taxes. And we’re going to assume that the income you’d get from selling LegalShield would replace a full-time, minimum wage opportunity.
37.5 hours per week at $7.25/hour is $271.87. Annually, that’s $14,137.50 before taxes, assuming you work or are paid for 52 weeks of work per year.
To earn $271.87 per week selling LegalShield, you need to sell 4.53 memberships per week. Round that up to 5 memberships per week. Annually, you need to sell 235.625 memberships a year. Essentially, you’d need to sell a top-level membership every working day in order to earn minimum wage.
But you want to earn more than minimum wage
Of course, the number of memberships you’ll need to sell and people you’ll need to recruit increase in order to earn additional income. However, consider what it takes to sell one membership or recruit one person. And lead to sale conversion rate.
If you convert 10% of leads (prospective customers) into sales, that would mean you’d need to speak with 50 new people every week in order to sell 5 memberships per week. And that’s just to earn minimum wage.
Also, you renewal commission is not $60 per membership. It’s much less. If you have less than 55% of people renew, you’ll earn $6.03 for the year. If you have 85% or more renew, you’ll earn $30.15 for the year. So, you’ll still need to get out there and sell memberships to keep earning the equivalent of a minimum wage job.
Review the LegalShield income disclosure statement
But, it’s possible to earn a lot of money selling LegalShield, right? Of course anything is possible. But it’s important to consider what is probable.
So review the LegalShield income disclosure statement.
- Direct sales companies are required to submit annual income disclosure statements
- These income disclosure statements are rarely viewed or read, but give great information about what people actually make from selling the product
The majority of members are not active Associates. Just 2.5% are Associates who made a sale. Of that 2.5%, 82% make less than $1,000. In fact, the average annual earnings for an Associate is $718 per year.
While it’s true that it “takes time to build a business,” this graph shows what the average looks like over time.
So the average income does increase, but it’s relatively modest income.
Can you make money selling LegalShield?
Yes, of course you “can” make money selling LegalShield. If you couldn’t, then it would be an illegal pyramid scheme. So the question is how much can you realistically make? How do you earn commissions? Who will you sell to? Will selling this product meet your income goals?
LegalShield, like all other direct sales and MLM companies, does an amazing sales job on their opportunity. You’re told the opportunities are “limitless” and if you work hard, it will pay off. But it’s up to you to assess the facts and be realistic.
Success takes work. But is the payoff worth the effort? How hard do you need to work to earn a $60 commission? How many times do you need to do that in order to have an impactful financial change in your life?
Buying the dream
What you’re really being sold on is not a financial opportunity but a dream. It’s a powerful motivator. And it’s a wonderful idea. If you work hard, you’ll have limitless opportunity.
But, the facts say otherwise. All direct sales and MLM companies do, in fact, have limits. There are limits to your commission. You are limited in how you can sell. And thus you are limited in what you can earn.
Failure to achieve incredible financial success is not a reflection of your efforts. That’s what all direct sales companies want you to believe. But it’s not true. The fact is owning a yacht, a million dollar home, and having a huge income one $60 commission at time is nearly impossible.
To make even $100,000 before taxes, you’d need to sell 1,667 memberships. At a generous 10% conversion rate, that means you’d need to 16,670 people to make 1,667 sales.
Most people meet 80,000 in their lifetime. You need to meet 20% of the average lifetime’s worth of people to make $100,000.
You’re just trying to talk people out of opportunity with your “facts”
Not true. If the facts don’t add up, your beliefs will not become reality. So assess the business facts of each opportunity. Don’t make it personal. If you feel emotional about a business opportunity, that may be a warning sign. Let logic prevail.