================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

For The Quarterly Period Ended March 31, 2009
                                       or

| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For The Transition Period From _____ to _____

                                 ---------------

                        Commission File Number: 001-09293

                          PRE-PAID LEGAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

                  Oklahoma                                    73-1016728
      (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                      Identification No.)

       One Pre-Paid Way, Ada, Oklahoma                         74820-5813
  (Address of principal executive offices )                     (Zip Code)

      (Registrants' telephone number, including area code): (580) 436-1234

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No | |

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted  and posted  pursuant to Rule 405 of  Regulation  S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes |X| No | |

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer | |   Accelerated filer |X|   Non-accelerated filer | |
                                                      (do not check if a smaller
Smaller reporting Company | |                          reporting company)


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes | | No |X|

The number of shares  outstanding of the  registrant's  common stock  (excluding
4,852,179 shares held in treasury) as of April 22, 2009 was 10,981,613.
================================================================================




                          PRE-PAID LEGAL SERVICES, INC.

                                    FORM 10-Q

                      For the Quarter Ended March 31, 2009


                                    CONTENTS



Part I.  Financial Information

         Item 1.   Financial Statements:

                a) Consolidated Balance Sheets
                   as of March 31, 2009 (Unaudited) and December 31, 2008

                b) Consolidated Statements of Income (Unaudited)
                   for the three month periods ended March 31, 2009 and 2008

                c) Consolidated Statements of Comprehensive Income (Unaudited)
                   for the three month periods ended March 31, 2009 and 2008

                d) Consolidated Statements of Cash Flows (Unaudited)
                   for the three month periods ended March 31, 2009 and 2008

                e) Notes to Consolidated Financial Statements (Unaudited)

         Item 2.   Management's Discussion and Analysis of Financial Condition
                   And Results of Operations

         Item 3.   Quantitative and Qualitative Disclosures About Market Risk

         Item 4.   Controls and Procedures

Part II. Other Information

         Item 1.   Legal Proceedings

         Item 1A.  Risk Factors

         Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

         Item 6.   Exhibits

Signatures




ITEM 1. FINANCIAL STATEMENTS
----------------------------



                          PRE-PAID LEGAL SERVICES, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (Amounts in 000's, except par values)


                                     ASSETS
                                                                                             March 31,       December 31,
                                                                                               2009              2008
                                                                                          -------------     -------------
Current assets:                                                                             (Unaudited)
                                                                                                      
  Cash and cash equivalents............................................................   $     32,147      $     26,528
  Available-for-sale investments, at fair value........................................         10,925            12,812
  Membership fees receivable...........................................................          6,074             6,639
  Inventories..........................................................................          1,472             1,285
  Refundable income taxes..............................................................              -               687
  Deferred member and associate service costs..........................................         15,574            15,737
  Deferred income taxes................................................................          5,544             5,151
  Other assets.........................................................................          5,843             6,200
                                                                                          -------------     -------------
      Total current assets.............................................................         77,579            75,039
Available-for-sale investments, at fair value..........................................         25,404            20,637
Investments pledged....................................................................          4,094             4,039
Property and equipment, net............................................................         52,131            53,445
Deferred member and associate service costs............................................          1,882             2,003
Other assets...........................................................................          7,935             7,680
                                                                                          -------------     -------------
        Total assets...................................................................   $    169,025      $    162,843
                                                                                          -------------     -------------
                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Membership benefits payable..........................................................   $     11,619      $     12,013
  Deferred revenue and fees............................................................         27,438            26,556
  Current portion of capital leases payable............................................             24                24
  Current portion of notes payable.....................................................         19,908            22,408
  Income taxes payable.................................................................          7,842                 -
  Accounts payable and accrued expenses................................................         17,468            16,327
                                                                                          -------------     -------------
    Total current liabilities..........................................................         84,299            77,328
  Capital leases payable...............................................................            905               910
  Notes payable........................................................................         32,690            37,251
  Deferred revenue and fees............................................................          1,882             2,003
  Deferred income taxes................................................................          5,579             5,646
  Other non-current liabilities........................................................          8,246             7,898
                                                                                          -------------     -------------
      Total liabilities................................................................        133,601           131,036
                                                                                          -------------     -------------
Stockholders' equity:
  Common stock, $.01 par value; 100,000 shares authorized; 15,836 and
    16,254 issued at March 31, 2009 and December 31, 2008, respectively................            158               163
  Retained earnings....................................................................        134,521           130,832
  Accumulated other comprehensive income...............................................           (227)             (160)
  Treasury stock, at cost; 4,852 shares held at March 31, 2009 and
    December 31, 2008, respectively....................................................        (99,028)          (99,028)
                                                                                          -------------     -------------
      Total stockholders' equity.......................................................         35,424            31,807
                                                                                          -------------     -------------
        Total liabilities and stockholders' equity.....................................   $    169,025      $    162,843
                                                                                          -------------     -------------


   The accompanying notes are an integral part of these financial statements.




                          PRE-PAID LEGAL SERVICES, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in 000's, except per share amounts)
                                   (Unaudited)

                                                                     Three Months Ended
                                                                         March 31,
                                                                 --------------------------
                                                                     2009         2008
                                                                 ------------  ------------
Revenues:
                                                                         
  Membership fees.............................................     $ 106,905   $   109,060
  Associate services..........................................         5,282         6,043
  Other.......................................................           933         1,100
                                                                 ------------  ------------
                                                                     113,120       116,203
                                                                 ------------  ------------
Costs and expenses:
  Membership benefits.........................................        36,205        37,262
  Commissions.................................................        27,012        30,824
  Associate services and direct marketing.....................         6,803         5,604
  General and administrative..................................        13,383        12,574
  Other, net..................................................         2,289         4,166
                                                                 ------------  ------------
                                                                      85,692        90,430
                                                                 ------------  ------------

Income before income taxes....................................        27,428        25,773
Provision for income taxes....................................        10,327         9,831
                                                                 ------------  ------------
Net income....................................................     $  17,101   $    15,942
                                                                 ------------  ------------

Basic earnings per common share...............................     $    1.53   $     1.29
                                                                 ------------  ------------
Diluted earnings per common share.............................     $    1.52   $     1.29
                                                                 ------------  ------------


   The accompanying notes are an integral part of these financial statements.




                          PRE-PAID LEGAL SERVICES, INC.
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                               (Amounts in 000's)
                                   (Unaudited)


                                                                     Three Months Ended
                                                                         March 31,
                                                                 --------------------------
                                                                     2009         2008
                                                                 ------------  ------------
                                                                         
Net income.....................................................    $  17,101   $  15,942
                                                                 ------------  ------------

Other comprehensive loss, net of tax:
  Foreign currency translation adjustment......................         (217)       (375)
                                                                 ------------  ------------
  Unrealized gains (losses) on investments:
    Unrealized holding gains (losses) arising during period....          199         (95)
    Reclassification adjustment for realized (gains) losses
      included in net income...................................          (49)         41
                                                                 ------------  ------------
                                                                         150         (54)
                                                                 ------------  ------------
Other comprehensive loss, net of income taxes
  of $81 and $(35) for the three months ended
  March 31, 2009 and 2008, respectively........................          (67)       (429)
                                                                 ------------  ------------

Comprehensive income...........................................    $  17,034   $  15,513
                                                                 ------------  ------------


   The accompanying notes are an integral part of these financial statements.




                          PRE-PAID LEGAL SERVICES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (Amounts in 000's)
                                   (Unaudited)

                                                                                       Three Months Ended
                                                                                           March 31,
                                                                                     ----------------------
                                                                                       2009         2008
                                                                                     ---------   ----------
Cash flows from operating activities:
                                                                                           
Net income.......................................................................    $  17,101   $  15,942
Adjustments to reconcile net income to net cash provided
  by operating activities:
  (Benefit) provision for deferred income taxes..................................         (460)        397
  Depreciation and amortization..................................................        2,088       2,191
  Decrease in Membership fees receivable.........................................          565         192
  Increase in inventories........................................................         (187)        (49)
  Decrease in refundable income taxes............................................          687       2,253
  Decrease in deferred member and associate service costs........................          284         816
  Decrease (increase) in other assets............................................          102      (1,004)
  Decrease in accrued Membership benefits........................................         (394)        (63)
  Increase in deferred revenue and fees..........................................          761         761
  Increase in other non-current liabilities......................................          348         328
  Increase (decrease) in income taxes payable....................................        7,842         (99)
  Increase (decrease) in accounts payable and accrued expenses...................          924        (840)
                                                                                     ---------   ----------
    Net cash provided by operating activities....................................       29,661      20,825
                                                                                     ---------   ----------
Cash flows from investing activities:
  Additions to property and equipment............................................         (774)     (2,034)
  Purchases of investments - available for sale..................................      (11,203)    (29,188)
  Maturities and sales of investments - available for sale.......................        8,418      20,814
                                                                                     ---------   ----------
    Net cash used in investing activities........................................       (3,559)    (10,408)
                                                                                     ---------   ----------
Cash flows from financing activities:
  Proceeds from exercise of stock options........................................          108         102
  Tax benefit on exercise of stock options.......................................           14          79
  Decrease in capital lease obligations..........................................           (5)         (6)
  Repayments of debt.............................................................       (7,061)     (4,560)
  Purchases and retirement of treasury stock.....................................      (13,539)    (12,884)
                                                                                     ---------   ----------
    Net cash used in financing activities .......................................      (20,483)    (17,269)
                                                                                     ---------   ----------

Net increase (decrease) in cash and cash equivalents.............................        5,619      (6,852)
Cash and cash equivalents at beginning of period.................................       26,528      24,941
                                                                                     ---------   ----------
Cash and cash equivalents at end of period.......................................    $  32,147   $  18,089
                                                                                     ---------   ----------


Supplemental disclosure of cash flow information:
  Cash paid for interest.........................................................    $     388   $     999
                                                                                     ---------   ----------
  Cash paid for income taxes.....................................................    $   2,737   $   8,228
                                                                                     ---------   ----------

   The accompanying notes are an integral part of these financial statements.


                          PRE-PAID LEGAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Except for per share amounts, dollar amounts in tables are in
                     thousands unless otherwise indicated)
                                   (Unaudited)

Note 1 - Basis of Presentation

     The accompanying  consolidated  financial statements and notes thereto have
been  prepared  pursuant  to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Accordingly,  certain  disclosures  normally  included in
financial statements prepared in accordance with accounting principles generally
accepted  in the  United  States of  America  ("GAAP")  have been  omitted.  The
accompanying  consolidated financial statements and notes thereto should be read
in  conjunction  with the  consolidated  financial  statements and notes thereto
included in our 2008 Annual Report on Form 10-K.  Terms such as "we",  "our" and
"us" are sometimes  used as abbreviated  references to Pre-Paid Legal  Services,
Inc.

     In our opinion, the accompanying unaudited financial statements as of March
31, 2009, and for the three month periods ended March 31, 2009 and 2008, reflect
adjustments  (which  were  normal and  recurring)  which,  in our  opinion,  are
necessary  for a fair  statement  of  our  financial  position  and  results  of
operations of the interim periods presented.  Results for the three month period
ended March 31, 2009 are not necessarily  indicative of results expected for the
full year.

     The  preparation  of financial  statements  in conformity  with  accounting
principles  generally  accepted in the United  States of America  requires us to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Note 2 - Contingencies

     On March 27, 2006 we received a complaint filed by Blackburn & McCune PLLC,
a former  provider  attorney law firm,  in the Second  Circuit Court of Davidson
County,  Tennessee  seeking  compensatory  and punitive  damages on the basis of
allegations  of breach of  contract  and fraud.  On May 15, 2006 the trial court
dismissed plaintiff's complaint in its entirety. Plaintiff amended the complaint
to allege fraud and breach of fiduciary duty on June 12, 2006 and filed a notice
of appeal on June 13, 2006. On August 24, 2007 the Court of Appeals reversed the
ruling of the trial court and  remanded  the suit to the trial court for further
proceedings.  This matter is  currently  set for trial in May 2009.  Dispositive
motions by both parties are pending at this time.  The ultimate  outcome of this
matter is not determinable.

     On March 23, 2007 we received a Civil Investigative Demand ("CID") from the
Federal Trade Commission ("FTC") requesting information relating to our Identity
Theft Shield and ADRS  Program.  On April 20, 2009 we received a letter from the
FTC alleging  misrepresentations  in sales  materials used in our Identity Theft
Shield and ADRS program such that we made false and misleading  claims about the
effectiveness of ADRS for helping  organizations  comply with  governmental data
security requirements.  Revisions to the marketing materials originally used and
provided to the FTC were made subsequent to the initial  communication  with the
FTC. The FTC could decide to commence federal court  proceedings for purposes of
determining  whether  there has been a  violation  and might  seek a variety  of
remedies,  including  injunctive  relief. We are working with the FTC to reach a
mutually  acceptable  resolution.  The  ultimate  outcome  of the  matter is not
determinable.

     We are a defendant in various other legal  proceedings that are routine and
incidental  to our  business.  We will  vigorously  defend our  interests in all
proceedings  in which we are  named as a  defendant.  We also  receive  periodic
complaints or requests for information  from various state and federal  agencies
relating to our business or the activities of our marketing  force.  We promptly
respond to any such  matters and provide any  information  requested.  While the
ultimate outcome of these proceedings is not  determinable,  we do not currently
anticipate that these  contingencies  will result in any material adverse effect
to our financial condition or results of operation,  unless an unexpected result
occurs in one of the cases.  The costs of the defense of these  various  matters
are  reflected as a part of general and  administrative  expense,  or Membership
benefits if fees relate to Membership issues, in the consolidated  statements of
income. We have established an accrued liability,  we believe will be sufficient
to cover  estimated  damages in  connection  with various  cases  (exclusive  of
ongoing  defense costs which are expensed as incurred),  which at March 31, 2009
was $500,000.  We believe that we have meritorious defenses in all pending cases
and will vigorously defend against the claims.  However,  it is possible that an
adverse  outcome in certain  cases or increased  litigation  costs could have an
adverse effect upon our financial condition,  operating results or cash flows in
particular quarterly or annual periods.

     Canadian taxing authorities are challenging  portions of our commission and
general  and  administrative  deductions  for tax years 1999 - 2002 and have tax
assessments  which  aggregate  $4.8  million.  The Canadian  taxing  authorities
contend  commission  deductions should be treated as prepaid expense and matched
with the  membership  revenue as  received,  we contend  these  commissions  are
deductible  when paid.  We base our deduction of commission on the fact that all
the  services  (the sale of the  membership)  have been  performed  by the sales
associate at the time of sale  therefore  this prepaid  expense (the  commission
payments) is deductible  when paid.  Also, the commission  payment is taxable to
the  sales  associate  when  paid and each  year we  issue a T4  (Canadian  1099
equivalent) to sales  associates for the total  commission  payments made during
that year. In addition, Canadian taxing authorities challenged our allocation of
general and  administrative  expenses to Canadian  operations.  We contended the
allocation of general and  administrative  expenses,  based on the percentage of
Canadian new  memberships  written and the Canadian  percentage  memberships  in
force,  was  reasonable.  During  July 2007 we  received  and later  accepted  a
settlement offer from the Canadian taxing authorities  regarding the general and
administrative  deductions  which  would  allow us to claim a  deduction  on the
Canadian tax return for over 70% of these items.  This settlement  offer allowed
us to amend our U.S.  federal tax returns and deduct the  remaining 30% of these
items. The Canadian taxing  authorities  amended Canadian tax returns to reflect
the changes in our general and administrative expense and issued credits for the
associated  taxes,  penalty and interest.  We did not prevail on the  commission
issue on our appeal to the Canadian taxing  authorities and on December 19, 2008
filed our Notice of Appeal  with the Tax Court of Canada.  We have paid the tax,
penalty and interest relating to the commission issue and at March 31, 2009 have
$3.1 million recorded in Other Assets,  Current.  We have established an accrued
liability we believe will be sufficient to cover the estimated tax assessment in
connection with these items, which at March 31, 2009 was $500,000. We believe it
is  more-likely  than not that we will prevail on our tax  position  relative to
these items.  However,  an adverse outcome could have a negative effect upon our
financial condition,  operating results or cash flows in particular quarterly or
annual periods.

Note 3 - Treasury Stock Purchases

     We  announced  on  April  6,  1999,  a  treasury  stock  purchase   program
authorizing  management to acquire up to 500,000 shares of our common stock. The
Board of Directors has increased  such  authorization  from 500,000 shares to 15
million  shares  through  subsequent  board  actions.  At March 31,  2009 we had
purchased 14.2 million  treasury shares under these  authorizations  for a total
consideration  of $420.7  million,  an average  price of $29.69  per  share.  We
purchased  and formally  retired  422,505  shares of our common stock during the
2009 first quarter for $13.5  million,  or an average price of $32.05 per share,
reducing our common stock by $4,225 and our retained  earnings by $13.5 million.
See Note 6 below.  Given the current  interest rate  environment,  the nature of
other  investments  available  and our  expected  cash  flows,  we believe  that
purchasing  treasury shares enhances  shareholder value and may seek alternative
sources of  financing to continue or  accelerate  the  program.  Any  additional
treasury stock purchases will be made at prices that we consider  attractive and
at such times that we believe will not unduly impact our liquidity.

Note 4 - Earnings Per Share

     Basic  earnings per common share are computed by dividing net income by the
weighted  average  number  of  shares of common  stock  outstanding  during  the
respective  period.  Diluted  earnings per common share are computed by dividing
net income by the weighted average number of shares of common stock and dilutive
potential common shares  outstanding  during the respective period. The weighted
average number of common shares is increased by the number of dilutive potential
common  shares  issuable on the  exercise  of options  less the number of common
shares assumed to have been purchased with the proceeds from the exercise of the
options  pursuant to the treasury stock method;  those  purchases are assumed to
have been made at the average  price of the common stock  during the  respective
period.

                                                                Three Months
                                                               Ended March 31,
                                                            -------------------
Basic Earnings Per Share:                                      2009       2008
                                                            --------- ---------
Earnings:
Net income..............................................    $ 17,101  $ 15,942
                                                            --------- ---------
Shares:
Weighted average shares outstanding.....................      11,207    12,361
                                                            --------- ---------
Diluted Earnings Per Share:
Earnings:
Net income..............................................    $ 17,101  $ 15,942
                                                            --------- ---------
Shares:
-------
Weighted average shares outstanding.....................      11,207    12,361
Assumed exercise of options.............................          11        21
                                                            --------- ---------
Weighted average number of shares, as adjusted..........      11,218    12,382
                                                            --------- ---------
Shares issued pursuant to option exercises..............           5         6
                                                            --------- ---------


     Options  to  purchase   shares  of  common  stock  are  excluded  from  the
calculation  of diluted  earnings per share when their  inclusion  would have an
anti-dilutive effect on the calculation.  No options were excluded for the three
month periods ended March 31, 2009 and 2008.

Note 5 - Recently Issued Accounting Pronouncements

     In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No. 157,  "Fair Value
Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework
for measuring fair value, and expands disclosures about fair value measurements.
We adopted SFAS 157 on January 1, 2008, as required for our financial assets and
financial liabilities. However, the FASB deferred the effective date of SFAS 157
for  one  year  as  it  relates  to  fair  value  measurement  requirements  for
nonfinancial  assets and  nonfinancial  liabilities  that are not  recognized or
disclosed at fair value on a recurring  basis.  The adoption of SFAS 157 for our
financial assets and financial liabilities did not have a material impact on our
consolidated financial statements. The adoption of SFAS 157 for our nonfinancial
assets and nonfinancial  liabilities had no impact on our consolidated financial
statements.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial  Liabilities".  SFAS No. 159 permits an entity to
choose, at specified election dates, to measure eligible  financial  instruments
and  certain  other  items at fair value that are not  currently  required to be
measured at fair value. An entity reports  unrealized  gains and losses on items
for which the fair value option has been elected in earnings at each  subsequent
reporting date. Upfront costs and fees related to items for which the fair value
option is elected are recognized in earnings as incurred and not deferred.  SFAS
159 also  established  presentation  and  disclosure  requirements  designed  to
facilitate  comparisons  between  entities  that  choose  different  measurement
attributes for similar types of assets and  liabilities.  SFAS 159 was effective
for financial  statements  issued for fiscal years  beginning after November 15,
2007 and interim  periods within those fiscal years.  At the effective  date, an
entity could elect the fair value option for eligible items that existed at that
date. We did not elect the fair value option for eligible  items that existed as
of January 1, 2008. As such, the adoption of SFAS 159 did not have any impact on
our consolidated financial position, results of operations or cash flows.

     In December  2007,  the FASB issued SFAS No. 141 (revised  2007),  Business
Combinations  ("SFAS 141R").  SFAS 141R establishes  principles and requirements
for how an acquirer  recognizes  and measures in its  financial  statements  the
identifiable  assets  acquired,  the  liabilities  assumed,  any  noncontrolling
interest in the acquiree and the goodwill  acquired.  SFAS 141R also establishes
disclosure  requirements  to enable the  evaluation  of the nature and financial
effects  of  the  business  combination.  This  statement  is  effective  for us
beginning January 1, 2009.

     In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial  Statements--an amendment of Accounting Research Bulletin
No. 51 ("SFAS 160"). SFAS 160 establishes accounting and reporting standards for
ownership  interests in subsidiaries held by parties other than the parent,  the
amount  of  consolidated  net  income  attributable  to  the  parent  and to the
noncontrolling  interest,  changes in a  parent's  ownership  interest,  and the
valuation of retained  noncontrolling  equity  investments  when a subsidiary is
deconsolidated.  SFAS 160 also establishes disclosure  requirements that clearly
identify and  distinguish  between the interests of the parent and the interests
of the  noncontrolling  owners.  This  statement is  effective  for us beginning
January  1, 2009.  The  adoption  of SFAS 160 had no impact on our  consolidated
financial position, results of operations or cash flows.

     In May 2008,  the FASB issued SFAS No. 162,  "The  Hierarchy  of  Generally
Accepted  Accounting  Principles"  (SFAS 162).  This  statement  identifies  the
sources of accounting  principles and the framework for selecting the principles
used in the preparation of financial statements of nongovernmental entities that
are presented in accordance with GAAP. With the issuance of this statement,  the
FASB concluded that the GAAP hierarchy  should be directed toward the entity and
not its auditor, and reside in the accounting literature established by the FASB
as opposed to the American  Institute of Certified  Public  Accountants  (AICPA)
Statement  on  Auditing  Standards  No. 69,  "The  Meaning of Present  Fairly in
Conformity With Generally  Accepted  Accounting  Principles."  This statement is
effective 60 days following the SEC's approval of the Public Company  Accounting
Oversight Board  amendments to AU Section 411, "The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles." The implementation of
this  standard  did  not  have a  significant  impact  on the  determination  or
reporting of our financial results.

     In  October  2008,   the  FASB  issued  FASB  Staff   Position  FAS  157-3,
"Determining  the Fair Value of a Financial Asset When the Market for That Asset
Is Not Active" ("FSP 157-3").  FSP 157-3  clarified the  application of FAS 157.
FSP 157-3  demonstrated  how the fair value of a financial  asset is  determined
when the market for that  financial  asset is inactive.  FSP 157-3 was effective
upon issuance,  including prior periods for which  financial  statements had not
been issued.  The  implementation of this standard did not have an impact on our
consolidated financial position, results of operations or cash flows.

     In January 2009,  the FASB issued FASB Staff Position No.  Emerging  Issues
Task Force 99-20-1,  "Amendments  to the  Impairment  Guidance of EITF Issue No.
99-20"  (FSP No. EITF  99-20-1).  This FSP  provided  additional  guidance  with
respect to how entities determine whether an  "other-than-temporary  impairment"
(OTTI) exists for certain  beneficial  interests in a  securitized  transaction,
such as asset-backed securities and mortgage-backed  securities, that (1) do not
have a high  quality  rating or (2) can be  contractually  prepaid or  otherwise
settled  such  that  the  holder  would  not  recover  substantially  all of its
investment.  FSP No. EITF  99-20-1  amended EITF Issue No. 99-20 to more closely
align its OTTI  guidance  with that of SFAS No.  115,  "Accounting  for  Certain
Investment  in Debt  and  Equity  Securities."  This  FSP was  effective  for us
prospectively  beginning  October 1, 2008. We considered  this FSP's  additional
interpretation  of EITF Issue No. 99-20 when classifying  respective  additional
impairments as "temporary" or  "other-than-temporary"  beginning with the fourth
quarter  of  2008.  This  FSP  had no  impact  on  such  classifications  on our
consolidated financial position, results of operations or cash flows.

Note 6 - Notes Payable

     During 2006,  we received  $80 million of senior,  secured  financing  (the
"Senior Loan") from Wells Fargo Foothill,  Inc. ("Wells Fargo")  consisting of a
$75 million five year term loan facility (the "Term  Facility") and a $5 million
five year revolving  credit  facility (the "Revolving  Facility").  At March 31,
2009, we had the full  Revolving  Facility  available to us. After payment of an
origination  fee of 1%, lender costs and retirement of $15.3 million of existing
bank indebtedness,  the net proceeds of the Term Facility we received were $58.8
million and used to purchase treasury stock.

     The Term  Facility  provides  for a five-year  maturity  and  amortizes  in
monthly  installments of $1.25 million  commencing August 1, 2006, with interest
on the outstanding  balances under the Term Facility and the Revolving  Facility
payable,  at our  option,  at a rate equal to Wells Fargo base rate or at the 30
day LIBOR rate plus 150 basis  points.  The interest  rate at March 31, 2009 was
2.00%. We are also obligated to make additional  quarterly payments equal to 50%
of our  "excess  cash flow" (as  defined in the Senior  Loan  agreement)  if our
Leverage  Ratio is greater than or equal to 1 to 1 at the end of a quarter.  Our
Leverage  Ratio was 0.43 to 1 at March 31,  2009.  We expect to be able to repay
the facilities with cash flow from  operations.  We have the right to prepay the
Term Facility in whole or in part without penalty.

     The  Senior  Loan  is   guaranteed  by  our   non-regulated   wholly  owned
subsidiaries  and is  secured by all of our  tangible  and  intangible  personal
property  (other  than   aircraft),   including  stock  in  all  of  our  direct
subsidiaries,  and a mortgage  on a building  we  recently  acquired  in Duncan,
Oklahoma and  remodeled to relocate  and expand our  existing  customer  service
facility in Duncan.

     In  addition  to  customary  covenants  for  loans of a similar  type,  the
principal covenants for the Senior Loan are:

     *    a limitation on incurring any  indebtedness in excess of the remaining
          existing bank  indebtedness  outstanding and $2.3 million in permitted
          capitalized leases or purchase money debt;

     *    a limitation on our ability to pay dividends or make stock  purchases,
          other  than with the net  proceeds  of the Term  Loan,  unless we meet
          certain cash flow tests;

     *    a prohibition on prepayment of other debt;

     *    a  requirement  to  maintain   consolidated  EBITDA  (Earnings  before
          Interest,  Taxes,  Depreciation and Amortization) for the twelve month
          period  ending  December  31, 2006 and each quarter  thereafter  of at
          least  $80  million  ($75  million  for us and  our  top  tier  direct
          subsidiaries);

     *    a  requirement  to maintain a quarterly  fixed charge  coverage  ratio
          (EBITDA  (with  certain  adjustments)  divided by the sum of  interest
          expense,  income taxes and scheduled  principal  payments) of at least
          1.1 to 1;

     *    a requirement to maintain at least 1.3 million members;

     *    a requirement to maintain a Leverage Ratio (funded  indebtedness as of
          the end of each  quarter  divided  by EBITDA for the  trailing  twelve
          months) of no more than 1.5 to 1;

     *    we must have availability  (unused portion of the Revolving  Facility)
          plus  Qualified  Cash  (the  amount  of  unrestricted  cash  and  cash
          equivalents) greater than or equal to $12,500,000; and,

     *    an event of  default  occurs if Harland  Stonecipher  ceases to be our
          Chairman and Chief  Executive  Officer for a period of 120 days unless
          replaced with a person approved by Wells Fargo.

     We were in compliance with these covenants at March 31, 2009.

     Our $20 million  real  estate loan was fully  funded in 2002 to finance our
new  headquarters  building in Ada,  Oklahoma and has a final maturity of August
2011.  This loan,  with  interest at the 30 day LIBOR rate plus 150 basis points
adjusted  monthly,  is secured by a mortgage on our  headquarters.  The interest
rate at March 31, 2009 was 2.00%,  with monthly  principal  payments of $191,000
plus  interest with the balance of  approximately  $2.3 million due at maturity.
The real estate loan's financial covenants conform to those of the Senior Loan.

     During  2007,  we  entered  into a term loan  agreement  with  Wells  Fargo
Equipment Finance,  Inc. to refinance $9.6 million  indebtedness  related to our
aircraft. This loan, with interest at the 30 day LIBOR rate plus 89 basis points
adjusted  monthly,  is secured by a mortgage on the aircraft  and  engines.  The
interest rate at March 31, 2009 was 1.39%,  with monthly  principal  payments of
$80,000 plus interest.

     During June 2008 we received additional  financing from Bank of Oklahoma in
the form of an unsecured  stock  repurchase loan for $10 million on an unsecured
basis repayable in 12 equal monthly payments  beginning June 30, 2008,  together
with interest at LIBOR plus 162.5 basis  points.  The interest rate at March 31,
2009 was 2.12%, with monthly principal payments of $833,000 plus interest.

     A schedule of outstanding balances as of March 31, 2009 is as follows:

                 Senior loan................................   $ 35,000
                 Real estate loan...........................      7,809
                 Aircraft loan..............................      8,122
                 Unsecured stock repurchase loan............      1,667
                                                               ---------
                 Total notes payable........................     52,598
                 Less: Current portion of notes payable.....    (19,908)
                                                               ---------
                 Long term portion..........................   $ 32,690
                                                               ---------

     A schedule of future maturities as of March 31, 2009 is as follows:


                 Repayment Schedule commencing
                 April 2009:
                 --------------------------------------------
                 Year 1.....................................   $ 19,908
                 Year 2.....................................     18,241
                 Year 3.....................................      9,193
                 Year 4.....................................        956
                 Year 5.....................................        956
                 Thereafter.................................      3,344
                                                               ---------
                 Total notes payable........................   $ 52,598
                                                               ---------


Note 7 - Share-based Compensation

     During the three  months ended March 31,  2009,  the stock option  activity
under our stock option plans was as follows:



                                                                                   Weighted
                                                                                   Average
                                                                                  Remaining
                                                      Weighted                   Contractual     Aggregate
                                                      Average      Number of         Term        Intrinsic
                                                       Price         Shares       (In Years)       Value
                                                    ------------  -------------   -----------   -----------
                                                                                       
Outstanding, January 1, 2009....................      $  19.70        42,500
  Granted.......................................          -                -
  Cancelled.....................................          -                -
  Exercised.....................................         23.93        (4,500)
Outstanding, March 31, 2009.....................    ------------  -------------
                                                      $  19.20        38,000         1.92        $    3.74
                                                    ------------  -------------   -----------   -----------
Options exercisable as of March 31, 2009........      $  19.20        38,000         1.92        $    3.74
                                                    ------------  -------------   -----------   -----------


     Other  information  pertaining to option  activity  during the three months
ended March 31, 2009 and 2008 was as follows:



                                                                            March 31,             March 31,
                                                                           --------------       --------------
                                                                              2009                  2008
                                                                                          
Weighted average grant-date fair value of stock options granted......      Not applicable       Not applicable
Total fair value of stock options vested.............................      Not applicable       Not applicable
Total intrinsic value of stock options exercised.....................          $     40             $    201



     Under our stock  option  plan,  1,346,252  shares of our  Common  Stock are
available for issuance.  Options  outstanding and exercisable  were granted at a
stock  option  price which was not less than the fair market value of our Common
Stock on the date the option was  granted  and no option has a term in excess of
ten years.  Additionally,  options vested and became  exercisable  either on the
grant date or up to five years from the option  grant date.

Note 8 - Fair Value Measurement

     On January 1, 2008,  we adopted  SFAS No. 157,  "Fair Value  Measurements,"
which  defines  fair  value,  establishes  a  framework  for using fair value to
measure  assets  and  liabilities,  and  expands  disclosures  about  fair value
measurements.  The Statement applies whenever other statements require or permit
assets or liabilities to be measured at fair value.

     SFAS 157 established  the following fair value  hierarchy that  prioritizes
the inputs used to measure fair value:

 Level 1: Quoted  prices  are  available  in active markets for identical assets
          or liabilities as of the reporting  date.  Active markets are those in
          which  transactions  for the asset or  liability  occur in  sufficient
          frequency  and volume to  provide  pricing  information  on an ongoing
          basis.  Level 1 primarily  consists of financial  instruments  such as
          exchange-traded  derivatives,  listed  equities  and  U.S.  government
          treasury securities.

 Level 2: Pricing inputs are other than quoted prices in active markets included
          in Level 1, which are either directly or indirectly  observable  as of
          the reporting date.  Level 2 includes those financial instruments that
          are valued using models or other valuation methodologies. These models
          are  primarily  industry-standard models that consider various assump-
          tions, including quoted  forward prices for  commodities,  time value,
          volatility factors, and current market and contractual  prices for the
          underlying instruments, as  well  as other relevant economic measures.
          Substantially all of these assumptions are observable in  the  market-
          place throughout the full  term of the instrument, can be derived from
          observable  data  or  are  supported by observable   levels  at  which
          transactions   are  executed in  the  marketplace.

 Level 3: Pricing  inputs  include  significant inputs that are  generally  less
          observable  from  objective  sources.  These  inputs  may be used with
          internally  developed  methodologies  that result in management's best
          estimate  of fair value.  At each  balance  sheet date,  we perform an
          analysis  of all  instruments  subject to SFAS No. 157 and  include in
          Level  3 all of  those  whose  fair  value  is  based  on  significant
          unobservable inputs.

     The following  table presents our financial  assets that were accounted for
at fair value on a recurring basis as of March 31, 2009 by level within the fair
value hierarchy (in thousands):

                                              Fair Value Measurements Using
                                       ---------------------------------------
                   March 31, 2009          Level 1       Level 2      Level 3
                                       ------------- ------------- -----------
Available for sale investments........ $       -     $  40,423     $       -

                   March 31, 2008
Available for sale investments........ $       -     $  46,605     $       -


     For securities without a readily  ascertainable  market value (Level 2), we
utilize pricing services and broker quotes.  Our pricing  service's  evaluations
are based on market data. Our pricing service utilizes  evaluated pricing models
that vary by asset class and incorporate  available  trade, bid and other market
information. Because many fixed income securities do not trade on a daily basis,
our pricing service's evaluated pricing applications apply available information
as applicable  through processes such as benchmark curves,  benchmarking of like
securities,  sector groupings, and matrix pricing, to prepare evaluations.  Such
estimated  fair values do not  necessarily  represent the values for which these
securities could have been sold at the dates of the balance sheets.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
         RESULTS OF OPERATIONS
         ---------------------

     The  following   discussion   should  be  read  in  conjunction   with  the
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  in our  Form  10-K for the  year  ended  December  31,  2008,  which
describes,  among other things,  our basic business model,  critical  accounting
policies,  measures of Membership retention, and basic cash flow characteristics
of our  business.  The  following  tables  set forth  changes  in the  principal
categories of revenues and expenses and Membership  and recruiting  activity for
the first  quarter of 2009  compared to the first quarter of 2008 and the fourth
quarter of 2008  (Table  amounts in 000's).  The sum of the  percentages  in the
tables may not total due to rounding.



   Three Months Ended March 31, 2009       Three                %        %        Three               Three
              compared to                  Months            Change   Change      Months              Months
   Three Months Ended March 31, 2008      Ended     % of      from     from        Ended      % of     Ended     % of
            and compared to              Mar. 31,   Total     Prior   Sequential  Mar. 31,   Total    Dec 31,   Total
  Three Months Ended December 31, 2008     2009    Revenue    Year     Period      2008     Revenue    2008    Revenue
--------------------------------------   --------- --------  -------  ---------- ---------- -------- ---------- --------
Revenues:
                                                                                         
  Membership fees....................    $ 106,905    94.5     (2.0)    (1.9)    $ 109,060     93.9  $108,994     94.9
  Associate services.................        5,282     4.7    (12.6)     6.7         6,043      5.2     4,952      4.3
  Other..............................          933     0.8    (15.2)    (3.0)        1,100      0.9       962      0.8
                                         ---------  -------  -------  ---------- ---------- -------- ---------- --------
                                           113,120   100.0     (2.7)    (1.6)      116,203    100.0   114,908    100.0
Costs and expenses:
  Membership benefits................       36,205    32.0     (2.8)    (3.8)       37,262     32.1    37,619     32.7
  Commissions........................       27,012    23.9    (12.4)   (13.0)       30,824     26.5    31,060     27.0
  Associate services and direct
    marketing........................        6,803     6.0     21.4     21.7         5,604      4.8     5,591      4.9
  General and administrative.........       13,383    11.8      6.4     (5.5)       12,574     10.8    14,155     12.3
  Other, net.........................        2,289     2.0    (45.1)   (30.1)        4,166      3.6     3,277      2.9
                                         --------- --------  -------  ---------- ---------- -------- ---------- --------
                                            85,692    75.7     (5.2)    (6.6)       90,430     77.8    91,702     79.8

Income before income taxes...........       27,428    24.2      6.4     18.2        25,773     22.2    23,206     20.2
Provision for income taxes...........       10,327     9.1      5.0     21.9         9,831      8.5     8,474      7.4
Net income...........................    --------- --------  -------  ---------- ---------- -------- ---------- --------
                                         $  17,101    15.1      7.3     16.1     $  15,942     13.7   $14,732     12.8






                                                                                            Three Months Ended
New Memberships:                                                                  3/31/2009     12/31/2008      3/31/2008
----------------                                                                  ---------     ----------      ---------
                                                                                                         
New legal service membership sales..........................................        117,635        124,629        131,862
New "stand-alone" IDT membership sales......................................          4,960          8,012          8,337
                                                                                  ---------     ----------      ---------
         Total new membership sales.........................................        122,595        132,641        140,199
                                                                                  ---------     ----------      ---------
                                                                                    122,595
New "add-on" IDT membership sales...........................................         72,850         85,221         81,263
Average Annual Membership fee...............................................        $319.86        $321.00        $321.47

Active Memberships:
Active legal service memberships at end of period...........................      1,438,519      1,469,315      1,481,531
Active "stand-alone" IDT memberships at end of period (see note below)......         88,544         89,839         85,428
                                                                                  ---------     ----------      ---------
         Total active memberships at end of period..........................      1,527,063      1,559,154      1,566,959
                                                                                  ---------     ----------      ---------
Active "add-on" IDT memberships at end of period (see note below)...........        671,850        680,862        641,997

New Sales Associates:
New sales associates recruited..............................................         23,871         32,533         25,800
Average enrollment fee paid by new sales associates.........................        $119.17         $49.02         $94.71

Average Membership fee in force:
Average Annual Membership fee...............................................        $300.81        $300.80        $298.54
Note - reflects 4,777 net transfers from "add-on" status to "stand-alone" status during the quarter



     Identity Theft Shield  ("IDT")  memberships  sold in  conjunction  with new
legal plan memberships or "added-on" to existing legal plan memberships sell for
$9.95 per month and are not counted as "new"  memberships  but do  increase  the
average   premium  and  related  direct   expenses   (membership   benefits  and
commissions) of our membership  base,  while "stand alone" Identity Theft Shield
memberships  are not attached to a legal plan membership and sell for $12.95 per
month.

     Recently Issued Accounting Pronouncements
     See Note 5 - Recently Issued Accounting Pronouncements in Item 1 above.

Results of Operations - First Quarter of 2009 compared to First Quarter of 2008
--------------------------------------------------------------------------------
     Net income increased 7% for the first quarter of 2009 to $17.1 million from
$15.9 million for the prior year's first quarter  primarily due to a decrease in
commission  expense of $3.8 million,  a decrease in other,  net expenses of $1.9
million and a decrease in Membership  benefits of $1.1 million partially reduced
by a decrease in  membership  fees of $2.2  million,  an  increase in  associate
services  and direct  marketing  expenses of $1.2 million an increase in general
and  administrative  expenses of $809,000 and a decrease in  associate  services
revenue of $761,000. Diluted earnings per share increased 18% to $1.52 per share
from  $1.29  per share for the prior  year's  comparable  quarter  due to the 7%
increase  in net income and a 9%  decrease  in the  weighted  average  number of
diluted shares outstanding.

     Membership  fees  totaled  $106.9  million  during the 2009  first  quarter
compared to $109.1 million for 2008, a decrease of 2%. Membership fees and their
impact on total revenues in any period are determined  directly by the number of
active  Memberships  in force  during any such period and the monthly  amount of
such  Memberships.  The active  Memberships  in force are determined by both the
number of new  Memberships  sold in any period together with the renewal rate of
existing Memberships. New Membership sales decreased 13% during the three months
ended March 31, 2009 to 122,595 from  140,199  during the  comparable  period of
2008.  At March 31,  2009,  there were  1,527,063  active  Memberships  in force
compared to 1,566,959  at March 31,  2008, a decrease of 3%. The average  annual
fee per Membership has increased from $299 for all Memberships in force at March
31, 2008 to $301 for all Memberships in force at March 31, 2009,  primarily as a
result of a larger number of Identity Theft Shield memberships.

     Associate  services  revenue  decreased by  approximately  $761,000 to $5.3
million during the first quarter of 2009 when compared to the 2008 quarter.  New
associates  enrolled  decreased 7% to 23,871 during the 2009 period  compared to
25,800 for the same  period of 2008.  The  average  enrollment  fees paid by new
sales associates were $119 and $95 for the respective periods. The eService fees
decreased to $2.6 million for the first quarter of 2009 compared to $3.1 million
for the 2008  quarter.  Future  revenues  from  associate  services  will depend
primarily on the number of new  associates  enrolled,  the price charged for new
associates and the number who choose to participate in our eService program, but
we expect  that such  revenues  will  continue  to be offset by the  direct  and
indirect cost to us of training,  providing  associate services and other direct
marketing expenses.

     Other  revenue  declined  15% from  $1.1  million  for the 2008  period  to
$933,000 for the 2009 period.

     Total  revenues  decreased 3% to $113.1  million for the three months ended
March 31, 2009 from $116.2 million during the comparable period of 2008 due to a
$2.2 million  decrease in Membership  fees and a $761,000  decrease in associate
services revenue.

     Membership  benefits,  which primarily  represent  payments to provider law
firms and Kroll Background America,  Inc., a subsidiary of Kroll Inc. ("Kroll"),
totaled  $36.2  million for the three  months  ended March 31, 2009  compared to
$37.3  million  for the  comparable  period  of  2008,  and  represented  34% of
Membership  fees for both periods.  This  Membership  benefit ratio  (Membership
benefits as a percentage of Membership  fees) should be reduced going forward as
substantially  all active  Memberships  provide for a capitated cost and we have
reduced the capitated cost of the Identity Theft plan benefits  effective  April
1, 2007, with an additional reduction on January 1, 2010.

     Commissions  to  associates  decreased  12% to $27.0  million for the three
months ended March 31, 2009 compared to $30.8 million for the comparable  period
of 2008,  and  represented  25% and 28% of  Membership  fees for the  respective
periods.  Commissions to associates are primarily dependent on the number of new
Memberships sold during a period and the average fee of those  Memberships.  New
Memberships  sold  during  the first  quarter  of 2009  totaled  122,595,  a 13%
decrease from the 140,199 for 2008, and the "add-on" IDT Membership  sales which
are not included in these totals  decreased  10% to 72,850 for the first quarter
of 2009 from 81,263 for 2008. Our average  Annual  Membership fee written during
the quarter of 2009 had a slight  decrease to $319.86  from  $321.47  during the
2008 period.  Our new  Membership  fees written during the first quarter of 2009
decreased 13% from 2008.  Average commission per new Membership was unchanged at
$200 for the 2009 first quarter.  The 13% decline in new Membership fees written
resulted in an approximate 12% decline in commissions.  Should we add additional
commissions  to our  compensation  plan or  reduce  the  amount  of  chargebacks
collected from our associates as we have from time to time, the commission  cost
per new Membership will increase accordingly.

     Associate  services and direct marketing expenses increased to $6.8 million
for the three months  ended March 31, 2009 from $5.6 million for the  comparable
period of 2008.  The  decrease  was  primarily a result of  decreased  costs for
incentive trips and bonuses,  decreased costs of conventions and decreased costs
for materials  sent to new  associates due to the reduction in the number of new
associates  enrolled  during the quarter.  We offer the Player's Club  incentive
program to  provide  additional  incentives  to our  associates  as a reward for
consistent,   quality  business.  Associates  can  earn  the  right  to  receive
additional monthly bonuses by meeting monthly  qualification  requirements for a
12 month  period  and  maintaining  certain  personal  retention  rates  for the
Memberships  sold during the 12 month  period.  These  expenses also include the
costs of providing associate services and marketing expenses.

     General and administrative expenses during the three months ended March 31,
2009  and  2008  were  $13.4  million  and  $12.6  million,   respectively,  and
represented 13% and 12%, respectively,  of Membership fees for both periods. The
$809,000 increase in general and  administrative  expenses included increases in
employee  health care cost and  consulting  fees  associated  with  Payment Card
Industry compliance which were partially offset by decreases in legal fees, bank
services charges and telephone expense.

     Other  expenses,   net,  which  include   depreciation  and   amortization,
litigation  accruals,  interest  expense and premium  taxes  reduced by interest
income,  were $2.3 million for the three months ended March 31, 2009 compared to
$4.2  million  for the 2008  comparable  period.  Depreciation  expense was $2.1
million for the three  months ended March 31, 2009 and $2.2 million for the 2008
comparable period. Interest expense decreased to $362,000 during the 2009 period
from  $1.3  million  during  the  comparable  period  of 2008 as a result of the
reduction  in debt and  lower  interest  rates.  Premium  taxes  increased  from
$422,000  for  the  three  months  ended  March  31,  2008 to  $460,000  for the
comparable period of 2009. Interest income decreased from $711,000 for the three
months  ended March 31, 2008 to $621,000  for the three  months  ended March 31,
2009, due to a decrease in interest rates.

     We have recorded a provision  for income taxes of $10.3  million  (37.7% of
pretax  income) and $9.8 million  (38.1% of pretax  income) for the three months
ended March 31, 2009 and 2008, respectively.

Results of Operations - First Quarter of 2009 compared to Fourth Quarter of 2008
--------------------------------------------------------------------------------
     First quarter 2009 membership fees decreased $2.1 million to $106.9 million
from $109.0 million for the fourth quarter of 2008.  Associate services revenues
increased  during  the 2009  first  quarter by  approximately  $330,000  to $5.3
million from $5.0 million for the 2008 fourth quarter and associate services and
direct  marketing  expenses  increased by $1.2  million  during the same period.
Membership  benefits totaled $36.2 million in the first quarter of 2009 compared
to $37.6 million for the 2008 fourth quarter and  represented  34% of membership
fees for the first quarter and 35% for the 2008 fourth  quarter.  Commissions to
associates  totaled $27.0  million in the 2009 first  quarter  compared to $31.1
million for the 2008 fourth quarter and represented  25% and 28%,  respectively,
of  membership  fees for the two periods.  General and  administrative  expenses
decreased  $772,000  during the 2009 first quarter to $13.4 million  compared to
$14.2 million for the 2008 fourth quarter and represented 13% of membership fees
for both periods.  The $772,000 decrease in general and administrative  expenses
included decreases in employee cost, telecommunications and bank service charges
which were  partially  offset by increases  in postage and legal and  accounting
fees.

     Liquidity and Capital Resources
     -------------------------------
     General
     Net cash flow  provided by operating  activities  was $29.7 million for the
three months ended March 31, 2009  compared to $20.8 million for the same period
in 2008.  This $8.9 million  increase was primarily the result of a $5.4 million
decrease in income tax  payments,  a $5.1  million  decrease in cash paid to our
associates for  commissions,  a $740,000  decrease in cash paid to our providers
for the delivery of benefits  and a $611,000  decrease in cash paid for interest
reduced by a $3.1 million  decrease in cash  receipts  from our members,  a $1.2
million  increase  in cash paid for  associate  services  and  direct  marketing
expenses and a $659,000 decrease in cash received for associate services.

     Consolidated net cash used by investing activities was $3.6 million for the
first three  months of 2009  compared to net cash used of $10.4  million for the
comparable  period of 2008.  This $6.8 million  change in  investing  activities
resulted from a $1.3 million decrease in additions to property and equipment and
an $18.0 million  decrease in the maturities and sales of investments  partially
offset by a $12.4 million decrease in investment purchases.

     Net cash used in financing activities during the first three months of 2009
was $20.5 million  compared to $17.3 million for the comparable  period of 2008.
This $3.2 million change was primarily  comprised of a $2.5 million  increase in
debt repayments and $655,000 increased treasury stock purchases.

     We purchased and formally retired 422,505 shares of our common stock during
the first three months of 2009 for $13.5 million,  or an average price of $32.05
per share,  reducing  our common  stock by $4,225 and our  retained  earnings by
$13.5  million.  We had  negative  working  capital of $6.7 million at March 31,
2009, an increase of $4.4 million  compared to our negative  working  capital of
$2.3  million at December 31, 2008.  The  increase was  primarily  due to a $7.8
million increase in income taxes payable, a $1.9 million decrease in the current
portion  of  available-for-sale  investments  and a  $1.1  million  increase  in
accounts  payable and accrued  expenses  partially  offset by a increase of $5.6
million in cash and cash  equivalents and a $2.5 million decrease in the current
portion of notes payable. The $6.7 million negative working capital at March 31,
2009 would have been a $5.1  million  positive  working  capital  excluding  the
current portion of deferred revenue and fees in excess of the current portion of
deferred member and associate service costs. These amounts will be eliminated by
the  passage of time  without  the  utilization  of other  current  assets or us
incurring other current liabilities.  We do not expect any difficulty in meeting
our financial obligations in the next 12 months.

     At March 31, 2009 we reported  $68.5  million in cash and cash  equivalents
and unpledged  investments  compared to $60.0 million at December 31, 2008.  Our
investments  typically  consist of  certificates  of deposit,  investment  grade
(rated Baa or higher)  bonds  primarily  issued by  corporations  and the United
States Treasury,  auction rate  certificates and state and municipal  tax-exempt
bonds.

     We generally  advance  significant  commissions at the time a Membership is
sold. During the three months ended March 31, 2009, we advanced commissions, net
of  chargebacks,  of $26.1  million on new  Membership  sales  compared to $28.9
million for the same period of 2008. Since  approximately 95% of Membership fees
are collected on a monthly basis, a significant  cash flow deficit is created on
a per  Membership  basis at the time a  Membership  is sold.  Since there are no
further commissions paid on a Membership during the advance period, we typically
derive  significant  positive cash flow from the  Membership  over its remaining
life.

     We expense advance  commissions ratably over the first month of the related
Membership.  As a result of this accounting policy, our commission  expenses are
all  recognized  over the first month of a Membership and there is no commission
expense  recognized for the same Membership  during the remainder of the advance
period. We track our unearned advance commission  balances  outstanding in order
to ensure the advance  commissions are recovered before any renewal  commissions
are paid and for internal purposes of analyzing our commission  advance program.
While not  recorded  as an asset,  unearned  advance  commission  balances  from
associates as of March 31, 2009, and related activity for the three month period
then ended, were:

                                                              (Amounts in 000's)
                                                              ------------------
Beginning unearned advance commission payments (1).........       $  174,371
Advance commission payments, net...........................           26,105
Earned commissions applied.................................          (29,464)
Advance commission payment write-offs......................           (1,025)
                                                                 -------------
Ending unearned advance commission payments before
  estimated unrecoverable payments (1).....................         169,987
Estimated unrecoverable advance commission payments (1)....         (45,137)
                                                                 -------------
Ending unearned advance commission payments, net (1).......      $  124,850
                                                                 -------------


(1)  These  amounts  do not  represent  fair  value,  as they do not  take  into
consideration timing of estimated recoveries.

     The ending unearned advance  commission  payments,  net, above includes net
unearned advance commission payments to non-vested  associates of $63.9 million.
As such, at March 31, 2009 future commission payments and related expense should
be reduced as unearned advance commission payments of $61 million are recovered.
Commissions are earned by the associate as Membership premiums are earned by us,
usually  on  a  monthly  basis.  For  additional  information  concerning  these
commission  advances,  see our  Annual  report  on Form 10-K  under the  heading
Commissions  to Associates in Item 7 -  Management's  Discussion and Analysis of
Financial Condition and Results of Operations.

     We believe that we have significant ability to finance any future growth in
Membership  sales based on our recurring  cash flow and existing  amount of cash
and cash  equivalents  and  unpledged  investments  at March  31,  2009 of $68.5
million. We expect to maintain cash and investment  balances,  including pledged
investments,  on an on-going basis of approximately  $20 to $30 million in order
to meet expected working capital needs and regulatory capital requirements. Cash
balances in excess of this amount would be used for discretionary  purposes such
as  additional  treasury  stock  purchases  subject to  limitations  in the Term
Facility.

     Notes Payable
     See Note 6 - Notes Payable in Item 1 above.

     Parent Company Funding and Dividends
     Although  we  are  the  operating   entity  in  many   jurisdictions,   our
subsidiaries  serve as  operating  companies  in various  states  that  regulate
Memberships  as  insurance  or  specialized  legal  expense  products.  The most
significant of these wholly owned subsidiaries are Pre-Paid Legal Casualty, Inc.
("PPLCI"),  Pre-Paid Legal Services Inc. of Florida ("PPLSIF") and Legal Service
Plans of Virginia, Inc. ("LSPV"). The ability of these entities to provide funds
to us is subject to a number of restrictions under various insurance laws in the
jurisdictions  in which they  conduct  business,  including  limitations  on the
amount of dividends and  management  fees that may be paid and  requirements  to
maintain  specified  levels of capital and reserves.  In addition  PPLCI will be
required to maintain its  stockholders'  equity at levels  sufficient to satisfy
various state or provincial  regulatory  requirements,  the most  restrictive of
which  is  currently  $3  million.  Additional  capital  requirements  of  these
entities, or any of our regulated subsidiaries, will be funded by us in the form
of capital  contributions or surplus  debentures.  During 2008, we received $4.1
million in dividends from LSPV and $14.9 million in dividends from PPLCI.

     Contractual Obligations
     There  have been no  material  changes  outside of the  ordinary  course of
business  in our  contractual  obligations  from those  disclosed  in our Annual
Report on Form 10-K for the year ended December 31, 2008.

Critical Accounting Policies
----------------------------
     Preparing  financial  statements  requires management to make estimates and
assumptions  that affect the reported amounts of assets,  liabilities,  revenues
and expenses.  These  estimates  and  assumptions  are affected by  management's
application  of  accounting  policies.  If these  estimates or  assumptions  are
incorrect,  there  could be a  material  change in our  financial  condition  or
operating results.  Many of these "critical  accounting  policies" are common in
the  insurance  and financial  services  industries;  others are specific to our
business and operations.  Our critical  accounting  policies  include  estimates
relating  to revenue  recognition  related to  Membership  and  associate  fees,
deferral of Membership and associate related costs,  expense recognition related
to commissions to associates, accrual of incentive awards payable and accounting
for legal  contingencies.  Each of these accounting policies and the application
of critical accounting policies and estimates was discussed in our Annual Report
on Form 10-K for the year ended  December  31, 2008.  There were no  significant
changes in the application of critical  accounting  policies or estimates during
the first three months of 2009. We are not aware of any reasonably likely events
or  circumstances  which would result in different  amounts being  reported that
would materially affect our financial condition or results of operations.

Capital and Dividend Plans
--------------------------
     We continue to evaluate the  desirability of additional  share  repurchases
and additional cash dividends.  We declared  dividends of $0.50 per share during
2004 and $0.60 per share during 2005 and have previously  announced that we will
continue share repurchases,  pay a dividend, or both, depending on our financial
condition, available resources and market conditions, as well as compliance with
our various loan covenants  which limit our ability to repurchase  shares or pay
cash dividends. We expect to continue our open market repurchase program when we
can  acquire  shares at prices we believe  are  attractive  as we have  existing
authorization  from the Board to purchase an additional  831,755 shares. We also
continue  to  evaluate  additional  sources of  financing  that may enable us to
accelerate the repurchase program at prices we believe are attractive.

Forward-Looking Statements
--------------------------
     All  statements  in this report other than purely  historical  information,
including  but not  limited  to,  statements  relating  to our future  plans and
objectives,  expected  operating  results  and the  assumptions  on  which  such
forward-looking  statements are based, constitute  "Forward-Looking  Statements"
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 and are based on our historical operating
trends  and  financial  condition  as of March 31,  2009 and  other  information
currently   available  to  management.   We  caution  that  the  Forward-Looking
Statements  are  subject  to all the risks  and  uncertainties  incident  to our
business,  including but not limited to risks described in Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2008. Moreover,  we may make
acquisitions or  dispositions of assets or businesses,  enter into new marketing
arrangements  or  enter  into  financing  transactions.  None  of  these  can be
predicted with certainty and,  accordingly,  are not taken into consideration in
any of the  Forward-Looking  Statements  made herein.  For all of the  foregoing
reasons, actual results may vary materially from the Forward-Looking Statements.
We assume no  obligation  to update the  Forward-Looking  Statements  to reflect
events or circumstances occurring after the date of the statement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------------------------------------------------------------------

     Disclosures  About Market Risk Our  consolidated  balance  sheets include a
certain amount of assets and liabilities whose fair values are subject to market
risk. Due to our significant investment in fixed-maturity investments,  interest
rate risk represents the largest market risk factor  affecting our  consolidated
financial  position.  Increases  and  decreases  in  prevailing  interest  rates
generally  translate  into  decreases  and  increases  in fair  values  of those
instruments.  Additionally,  fair values of interest rate sensitive  instruments
may be affected by the credit  worthiness  of the  issuer,  prepayment  options,
relative  values of  alternative  investments,  liquidity of the  instrument and
other general market conditions.

     As of March 31, 2009, our investments consisted of the following:

                     Description                                  Fair Value
----------------------------------------------------------      ---------------
Obligations of state and political subdivisions...........      $     29,292
Certificates of deposit...................................             7,302
Government guaranteed bank debt...........................             1,593
U. S. Government obligations..............................             1,581
Auction Rate Securities...................................               375
Corporate obligations.....................................               280
                                                                ---------------
Total investments.........................................      $     40,423
                                                                ---------------

     We do not hold any  investments  classified  as trading  account  assets or
derivative financial instruments.

     The table below summarizes the estimated effects of hypothetical  increases
and decreases in interest rates on our fixed-maturity  investment portfolio.  It
is assumed that the changes  occur  immediately  and  uniformly,  with no effect
given to any steps that we might take to counteract that change.

     The  hypothetical  changes in market  interest  rates reflect what could be
deemed best and worst case  scenarios.  The fair values  shown in the  following
table are based on  contractual  maturities.  Significant  variations  in market
interest  rates  could  produce  changes  in the  timing  of  repayments  due to
prepayment  options  available.  The  fair  value of such  instruments  could be
affected and, therefore, actual results might differ from those reflected in the
following table:




                                                                          Hypothetical change    Estimated fair value
                                                            (In 000's)      in interest rate      after  hypothetical
                                                            Fair value     (bp=basis points)    change in interest rate
                                                            ----------    -------------------   -----------------------
                                                                                            
Fixed-maturity investments at March 31, 2009 (1).......      $  32,746     100 bp increase            $  31,146
                                                                           200 bp increase               29,696
                                                                            50 bp decrease               33,562
                                                                           100 bp decrease               34,404

Fixed-maturity investments at December 31, 2008 (1)....      $  31,360     100 bp increase            $  29,831
                                                                           200 bp increase               28,457
                                                                            50 bp decrease               32,134
                                                                           100 bp decrease               32,907
-------------------


(1)  Excluding short-term investments (certificates of deposits and auction rate
     certificates)  with a fair value of $7.7 million at March 31, 2009 and $6.1
     million at December 31, 2008.

     The table above illustrates,  for example,  that an instantaneous 200 basis
     point increase in market  interest rates at March 31, 2009 would reduce the
     estimated fair value of our  fixed-maturity  investments  by  approximately
     $3.0 million at that date. At December 31, 2008, an instantaneous 200 basis
     point  increase in market  interest  rates would have reduced the estimated
     fair value of our fixed-maturity  investments by approximately $2.9 million
     at that  date.  The  definitive  extent  of the  interest  rate risk is not
     quantifiable  or  predictable  due to the  variability  of future  interest
     rates, but we do not believe such risk is material.

     We  primarily  manage our  exposure  to  investment  interest  rate risk by
purchasing  investments that can be readily  liquidated should the interest rate
environment begin to significantly change.

     Interest Rate Risk
     As of March 31, 2009, we had $52.6 million in notes payable  outstanding at
interest  rates  indexed to the 30 day LIBOR rate that exposes us to the risk of
increased  interest  costs if interest  rates  rise.  Assuming a 100 basis point
increase in interest rates on the floating rate debt,  annual  interest  expense
would  increase by  approximately  $526,000.  As of March 31,  2009,  we had not
entered into any interest rate swap agreements with respect to the term loans or
our floating rate municipal bonds.

     Foreign Currency Exchange Rate Risk
     Although we are exposed to foreign currency  exchange rate risk inherent in
revenues, net income and assets and liabilities denominated in Canadian dollars,
the potential  change in foreign  currency  exchange  rates is not a substantial
risk,  as  approximately  1% of our revenues  are derived  outside of the United
States.  As reflected in the attached  Consolidated  Statements of Comprehensive
Income,  we have recorded negative foreign currency  translation  adjustments of
$217,000  for the  three  months  ended  March  31,  2009 and have a  cumulative
positive foreign currency  translation  adjustment  balance of $642,000 at March
31, 2009.  These amounts are subject to change  dynamically in conjunction  with
the relative values of the Canadian and U.S. dollars.


ITEM 4.    CONTROLS AND PROCEDURES
----------------------------------
     Under  the  supervision  and  with  the  participation  of our  management,
including  our Chief  Executive  Officer and Chief  Financial  Officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  (as defined in Rule  13a-15(e)  under the  Securities
Exchange Act of 1934). Based on that evaluation, our Chief Executive Officer and
Chief  Financial  Officer  have  concluded  that,  as of  March  31,  2009,  our
disclosure  controls and procedures  were  effective to ensure that  information
required  to be  disclosed  by us in  reports  that we file or submit  under the
Securities Exchange Act of 1934 is recorded, processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

     There were no changes in our internal control over financial  reporting (as
defined in Rule 13a-15(f) under the Securities  Exchange Act of 1934) during the
quarter ended March 31, 2009 that have  materially  affected,  or are reasonably
likely to materially affect, our internal control over financial reporting.


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.
---------------------------

     See Note 2 of the Notes to Consolidated  Financial  Statements  included in
Part I, Item 1 of this report for information with respect to legal proceedings.


ITEM 1A.      RISK FACTORS
--------------------------

     There  are a  number  of risk  factors  that  could  affect  our  financial
condition  or results  of  operations.  See Note 2 of the Notes to  Consolidated
Financial  Statements  included in Part I, Item 1 of this report for information
with  respect to legal  proceedings.  Please  refer to pages 15 - 17 of our 2008
Annual  Report on Form 10-K for a description  of other risk factors.  There has
not been any  material  changes  in the risk  factors  disclosed  in the  Annual
Report.


ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
---------------------------------------------------------------------

     Issuer Purchases of Equity Securities

     The following  table provides  information  about our purchases of stock in
the open market during the first quarter of 2009.



                                                             Total Number of       Maximum Number of
                                                           Shares Purchased as    Shares that May Yet
                         Total Number                        Part of Publicly     Be Purchased Under
                           of Shares      Average Price     Announced Plans or       the Plans or
        Period             Purchased      Paid per Share         Programs            Programs (1)
----------------------  ---------------  ----------------  --------------------  ----------------------
                                                                           
January 2009..........       203,534         $  33.56              203,534                50,726
February 2009.........        64,994            31.05               64,994               985,732
March 2009............       153,977            30.46              153,977               831,755
                        ---------------  ----------------  --------------------
Total.................       422,505         $  32.05              422,505
-----------



(1)  We  announced  on  April  6,  1999,  a  treasury  stock  purchase   program
     authorizing  management to acquire up to 500,000 shares of our common stock
     in the open market.  The Board of Directors has  subsequently  from time to
     time increased such authorization from 500,000 shares to 15 million shares.
     The most  recent  authorization  was for 1  million  additional  shares  on
     February  18, 2009 and there has been no time limit set for  completion  of
     the repurchase program.

     See Part I, Item 2,  "Management's  Discussion  and  Analysis of  Financial
Condition  and  Results of  Operation-Liquidity  and  Capital  Resources"  for a
description of loan  covenants  that limit our ability to repurchase  shares and
pay dividends.


ITEM 6.  EXHIBITS.
------------------

(a) Exhibits:


             

                                INDEX TO EXHIBITS

  Exhibit No.                                   Description
  -----------                                   -----------
3.1             Amended and Restated  Certificate  of  Incorporation  of the Company,  as amended  (Incorporated  by
                reference to Exhibit 3.1 of the Company's Report on Form 8-K dated June 27, 2005)

3.2             Amended  and  Restated  Bylaws of the  Company  (Incorporated  by  reference  to Exhibit  3.1 of the
                Company's Report on Form 10-Q for the period ended June 30, 2003)

*10.1           Employment Agreement effective January 1, 1993 between the  Company  and Harland C. Stonecipher (In-
                corporated by reference to Exhibit 10.1 of the Company's Annual Report on  Form  10-KSB for the year
                ended December 31, 1992)

*10.2           Agreements between Shirley Stonecipher, New York Life  Insurance  Company  and the Company regarding
                life insurance policy covering Harland C. Stonecipher (Incorporated by reference to Exhibit 10.21 of
                the Company's Annual Report on Form 10-K for the year ended December 31, 1985)

*10.3           Amendment  dated  January 1,  1993 to Split Dollar Agreement  between  Shirley  Stonecipher  and the
                Company regarding life insurance policy covering Harland C. Stonecipher (Incorporated  by  reference
                to Exhibit 10.3 of the Company's Annual Report on Form 10-KSB for the year ended  December 31, 1992)
*10.4           Form of New Business Generation Agreement Between the Company and  Harland C. Stonecipher (Incorpor-
                ated by reference to Exhibit 10.22 of the Company's Annual Report on Form  10-K for  the year  ended
                December 31, 1986)

*10.5           Amendment  to New  Business  Generation  Agreement  between the  Company and Harland C.  Stonecipher
                effective  January,  1990 (Incorporated by reference to Exhibit 10.12 of the Company's Annual Report
                on Form 10-KSB for the year ended December 31, 1992)

*10.6           Amendment No. 2 to New Business Generation  Agreement between the Company and Harland C. Stonecipher
                effective  January,  1990 (Incorporated by reference to Exhibit 10.13 of the Company's Annual Report
                on Form 10-K for the year ended December 31, 2002)

*10.7           Stock Option Plan, as amended  effective May 2003  (Incorporated by reference to Exhibit 10.7 of the
                Company's Annual Report on Form 10-K for the year ended December 31, 2004)

10.8            Loan agreement dated June 11, 2002 between Bank of Oklahoma,  N.A. and the Company  (Incorporated by
                reference to Exhibit 10.1 of the Company's  Quarterly  Report on Form 10-Q for the six-months  ended
                June 30, 2002)

10.9            Form of Mortgage  dated July 23, 2002 between Bank of Oklahoma,  N.A. and the Company  (Incorporated
                by  reference  to Exhibit  10.3 of the  Company's  Quarterly  Report on Form 10-Q for the six months
                ended June 30, 2002)

*10.10          Deferred  compensation plan effective  November 6, 2002  (Incorporated by reference to Exhibit 10.14
                of the Company's Annual Report on Form 10-K for the year ended December 31, 2002)

*10.11          Amended Deferred  Compensation  Plan effective  January  1,  2005   (Incorporated  by  reference  to
                Exhibit 10.16 of the Company's Report on Form 10-K for the year ended December 31, 2004)

10.12           Credit  Agreement  dated June 23, 2006 among Pre-Paid  Legal  Services,  Inc, the lenders  signatory
                thereto and Wells Fargo Foothill,  Inc. as Arranger and  Administrative  Agent and Bank of Oklahoma,
                N.A.  (Incorporated  by reference to Exhibit 10.1 of the Company's  Current Report on Form 8-K filed
                June 27, 2006)

10.13           Security  Agreement  dated June 23, 2006 between  Pre-Paid  Legal  Services,  Inc and certain of its
                subsidiaries and Wells Fargo Foothill,  Inc., as Agent (Incorporated by reference to Exhibit 10.2 of
                the Company's Current Report on Form 8-K filed June 26, 2006)

10.14           Guaranty  Agreement  dated June 23, 2006 between  certain  subsidiaries  of Pre-Paid Legal Services,
                Inc. and Wells Fargo  Foothill,  Inc.,  as Agent  (Incorporated  by reference to Exhibit 10.3 of the
                Company's Current Report on Form 8-K filed June 27, 2006)

10.15           Mortgage,  Assignment of Rents and Leases and Security Agreement by Pre-Paid Legal Services, Inc. in
                favor of Wells Fargo  Foothill,  Inc as Agent  (Incorporated  by  reference  to Exhibit  10.4 of the
                Company's Current Report on Form 8-K filed June 26, 2006)

10.16           First  Amendment to Loan Agreement  dated June 23, 2006 between  Pre-Paid Legal  Services,  Inc. and
                Bank of Oklahoma,  N.A. (Incorporated by reference to Exhibit 10.5 of the Company's of the Company's
                Current Report on Form 8-K filed June 26, 2006)

10.17           First Amendment to Credit Agreement dated September 10, 2007 between  Pre-Paid Legal Services,  Inc.
                and the lenders named therein and Wells Fargo Foothill,  Inc. as administrative  agent (Incorporated
                by reference to Exhibit 10.1 of the  Company's  of the  Company's  Current  Report on Form 8-K filed
                September 10, 2007)

10.18           Term Loan Agreement dated September 28, 2007 between  Pre-Paid Legal Services,  Inc. and Wells Fargo
                Equipment Finance,  LLC (Incorporated by reference to Exhibit 10.1 of the Company's of the Company's
                Current Report on Form 8-K filed October 2, 2007)

10.19           Form of Aircraft  Mortgage and Security  Agreement  between Pre-Paid Legal Services,  Inc. and Wells
                Fargo  Equipment  Finance,  LLC  (Incorporated  by reference to Exhibit 10.2 of the Company's of the
                Company's Current Report on Form 8-K filed October 2, 2007)

10.20           Second Amendment to Credit  Agreement dated February 22, 2008 between Pre-Paid Legal Services,  Inc.
                and the lenders named therein and Wells Fargo Foothill,  Inc. as administrative  agent (Incorporated
                by  reference  to Exhibit  10.20 of our Annual  Report on Form 10-K for the year ended  December 31,
                2007)

10.21           Third  Amendment to Credit  Agreement dated June 5, 2008 between  Pre-Paid Legal Services,  Inc. and
                the lenders named therein and Wells Fargo Foothill,  Inc. as administrative  agent  (Incorporated by
                reference to Exhibit 10.21 of the Company's  Quarterly  Report on Form 10-Q for the six-months ended
                June 30, 2008)

10.22           Second  Amendment to Loan Agreement  dated June 6, 2008 between  Pre-Paid Legal  Services,  Inc. and
                Bank of  Oklahoma,  N.A.  (Incorporated  by reference to Exhibit  10.22 of the  Company's  Quarterly
                Report on Form 10-Q for the six-months ended June 30, 2008)

21.1            List of Subsidiaries of the Company

23.1            Consent of Grant Thornton LLP

31.1            Certification of Harland C. Stonecipher,  Chairman, Chief Executive Officer and President,  Pursuant
                to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2            Certification of Steve Williamson,  Chief Financial  Officer,  Pursuant to Rule 13a-14(a)  under the
                Securities Exchange Act of 1934

32.1            Certification of Harland C. Stonecipher,  Chairman, Chief Executive Officer and President,  Pursuant
                to 18 U.S.C. Section 1350

32.2            Certification of Steve Williamson, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350
--------------------

* Constitutes a management contract or compensatory plan or arrangement required
to be filed as an exhibit to this report.



                                   SIGNATURES
                                   ----------

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                   PRE-PAID LEGAL SERVICES, INC.
                                   (Registrant)


Date: April 27, 2009               /s/ Harland C. Stonecipher
                                   ---------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman, Chief Executive
                                   Officer and President
                                   (Principal Executive Officer)

Date: April 27, 2009               /s/ Randy Harp
                                   ---------------------------------------------
                                   Randy Harp
                                   Chief Operating Officer
                                   (Duly Authorized Officer)

Date: April 27, 2009               /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer
                                   (Principal Financial and
                                   Accounting Officer)







                                  Exhibit 31.1

                                  CERTIFICATION

I, Harland C. Stonecipher, certify that:

(1)  I have  reviewed  this  quarterly  report  on Form 10-Q of  Pre-Paid  Legal
     Services, Inc.;

(2)  Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

(4)  The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange  Act Rules  13a-15(e))  and  internal  control  over  financial
     reporting (as defined in Exchange Act Rule 13 (a)-15(f)) for the registrant
     and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

(5)  The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: April 27, 2009               /s/ Harland C. Stonecipher
                                   ---------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman, Chief Executive
                                   Officer and President



                                  Exhibit 31.2

                                  CERTIFICATION

I, Steve Williamson, certify that:

(1)  I have  reviewed  this  quarterly  report  on Form 10-Q of  Pre-Paid  Legal
     Services, Inc.;

(2)  Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

(3)  Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

(4)  The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange  Act Rules  13a-15(e))  and  internal  control  over  financial
     reporting (as defined in Exchange Act Rule 13 (a)-15(f)) for the registrant
     and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

(5)  The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: April 27, 2009               /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer



                                  Exhibit 32.1

                Certification Pursuant to 18 U.S.C. Section 1350


     Pursuant to 18 U.S.C.  ss. 1350, the undersigned  officer of Pre-Paid Legal
Services,  Inc. (the "Company"),  hereby certifies that the Company's  Quarterly
Report on Form 10-Q for the quarter  ended March 31, 2009 (the  "Report")  fully
complies with the requirements of Section 13(a) or 15(d), as applicable,  of the
Securities Exchange Act of 1934 and that the information contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of operations of the Company.

Date: April 27, 2009               /s/ Harland C. Stonecipher
                                   ---------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman, Chief Executive
                                   Officer and President





                                  Exhibit 32.2

                Certification Pursuant to 18 U.S.C. Section 1350


     Pursuant to 18 U.S.C.  ss. 1350, the undersigned  officer of Pre-Paid Legal
Services,  Inc. (the "Company"),  hereby certifies that the Company's  Quarterly
Report on Form 10-Q for the quarter  ended March 31, 2009 (the  "Report")  fully
complies with the requirements of Section 13(a) or 15(d), as applicable,  of the
Securities Exchange Act of 1934 and that the information contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of operations of the Company.

Date: April 27, 2009               /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer