ADA — The economy is still in the doldrums, people are losing their jobs — and conditions couldn’t be better for Ada-based Pre-Paid Legal.
At least that’s the outlook for CEO Harland Stonecipher, whose company saw net income rise 6 percent the first half of 2009 with cash flow of $35 million, up 28 percent.
"It’s just our business model,” Stonecipher said. "We’ve reported positive net income for the past 10 years. We’re an Oklahoma company, we’ve got offices in Ada, Antlers and Duncan and we’re still rural America. You get a good work ethic, attitude and lesser cost of operations.”
Tulsa financial analyst Jake Dollarhide sees the depressed economy, however, as yet another strength for Pre-Paid Legal: people need attorneys more than ever, and the company’s "pre-paid” approach is more appealing than a hefty $2,000 retainer.
"The thing about Pre-Paid is some might consider it to be a luxury item, much like Starbucks coffee,” Dollarhide said. "But it does cater to middle income or lower income level, or anybody who finds it distasteful to pay a $2,000 retainer.”
"The economic downtown has not affected our company, but it has affected our Pre-Paid members,” Stonecipher said. "They need our services more now than at any other time. Foreclosures are at record highs, and, in fact, we’re told in 2010 and 2011, more than 50 percent of mortgages will be under water. Those people will need lawyers.”
Stonecipher said Pre-Paid members are already getting good use of their service, consulting with attorneys about foreclosures and having a better shot at working out an agreement to keep their homes.
"A lot of people who get into this situation can’t afford $300 to $500 an hour,” Stonecipher said. "But with Pre-Paid, they get unlimited access.”
Pre-Paid Legal is continuing with the programs it has had for years but is adding programs designed to help small businesses deal with unions and debt collection.
"Some of these small businesses are very concerned about being unionized. They know there’s a major press in that area, but they don’t know how to respond or what to do about it,” Stonecipher said.