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                                  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, 2007


| | 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 is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Check one:

Large accelerated filer | | Accelerated filer |X| Non-accelerated filer | |

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 20, 2007 was 13,339,343.
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                          PRE-PAID LEGAL SERVICES, INC.

                                    FORM 10-Q

                      For the Quarter Ended March 31, 2007


                                    CONTENTS



Part I.  Financial Information

   Item 1.  Financial Statements:


            a) Consolidated Balance Sheets
               as of March 31, 2007 (Unaudited) and December 31, 2006

            b) Consolidated Statements of Income (Unaudited)
               for the three months ended March 31, 2007 and 2006

            c) Consolidated Statements of Comprehensive Income (Unaudited)
               for the three months ended March 31, 2007 and 2006

            d) Consolidated Statements of Cash Flows (Unaudited)
               for the three months ended  March 31, 2007 and 2006

            e) Notes to Consolidated Financial Statements (Unaudited)

   Item 1A. Risk Factors

   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 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,
                                                                                             2007                 2006
                                                                                       ---------------      ---------------
Current assets:                                                                          (Unaudited)
                                                                                                      
  Cash and cash equivalents............................................................$    17,607          $    12,031
  Available-for-sale investments, at fair value........................................     48,800               42,275
  Membership fees receivable...........................................................      5,478                5,518
  Inventories..........................................................................      1,341                1,337
  Refundable income taxes..............................................................          -                  653
  Deferred member and associate service costs..........................................     17,705               15,879
  Deferred income taxes................................................................      3,995                4,235
  Other assets.........................................................................      6,465                6,404
                                                                                       ---------------      ---------------
      Total current assets.............................................................    101,391               88,332
Available-for-sale investments, at fair value..........................................     20,602               27,461
Investments pledged....................................................................      4,151                4,145
Property and equipment, net............................................................     58,805               59,643
Deferred member and associate service costs............................................      2,577                2,636
Other assets...........................................................................      6,484                6,330
                                                                                       ---------------      ---------------
        Total assets...................................................................$   194,010          $   188,547
                                                                                       ---------------      ---------------


                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Membership benefits..................................................................$    12,180          $    11,995
  Deferred revenue and fees............................................................     27,373               26,040
  Current portion of capital leases payable............................................         21                  340
  Current portion of notes payable.....................................................     18,437               18,437
  Income taxes payable.................................................................      6,143                    -
  Accounts payable and accrued expenses................................................     14,302               13,645
                                                                                       ---------------      ---------------
    Total current liabilities..........................................................     78,456               70,457
  Capital leases payable...............................................................        951                  957
  Notes payable........................................................................     68,924               73,533
  Deferred revenue and fees............................................................      2,577                2,636
  Deferred income taxes................................................................      4,615                4,897
  Other non-current liabilities........................................................      5,519                5,207
                                                                                       ---------------      ---------------
      Total liabilities................................................................    161,042              157,687
                                                                                       ---------------      ---------------
Stockholders' equity:
  Common stock, $.01 par value; 100,000 shares authorized; 18,200 and
    18,488 issued at March 31, 2007 and December 31, 2006, respectively................        182                  185
  Retained earnings....................................................................    131,376              129,413
  Accumulated other comprehensive income...............................................        438                  290
  Treasury stock, at cost; 4,852 shares held at March 31, 2007 and
   December 31, 2006, respectively.....................................................    (99,028)             (99,028)
                                                                                       ---------------      ---------------
      Total stockholders' equity.......................................................     32,968               30,860
                                                                                       ---------------      ---------------
        Total liabilities and stockholders' equity.....................................$   194,010          $   188,547
                                                                                       ---------------      ---------------




   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,
                                                                                        ---------------------------
                                                                                             2007             2006
                                                                                        -----------     -----------
Revenues:
                                                                                                   
  Membership fees.............................................                          $ 103,881        $ 101,740
  Associate services..........................................                              7,064            6,963
  Other.......................................................                              1,139            1,257
                                                                                        -----------     -----------
                                                                                          112,084          109,960
                                                                                        -----------     -----------
Costs and expenses:
  Membership benefits.........................................                             36,751            35,628
  Commissions.................................................                             30,532            31,885
  Associate services and direct marketing.....................                              6,375             7,302
  General and administrative..................................                             12,747            12,467
  Other, net..................................................                              3,744             2,723
                                                                                        -----------     -----------
                                                                                           90,149            90,005
                                                                                        -----------     -----------
Income before income taxes....................................                             21,935            19,955
Provision for income taxes....................................                              7,207             6,884
                                                                                        -----------     -----------
Net income....................................................                          $  14,728        $   13,071
                                                                                        -----------     -----------
Basic earnings per common share...............................                          $   1.09         $    .85
                                                                                        -----------     -----------
Diluted earnings per common share.............................                          $   1.08         $    .84
                                                                                        -----------     -----------





   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,
                                                                                        ---------------------------
                                                                                             2007             2006
                                                                                        -----------     -----------
                                                                                                   
Net income.....................................................                         $  14,728        $  13,071
                                                                                        -----------     -----------
Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustment......................                                51              (41)
                                                                                        -----------     -----------
  Unrealized gains (losses) on investments:
    Unrealized holding gains (losses) arising during period....                                25             (204)
    Reclassification adjustment for realized (gains) losses
      included in net income...................................                                72              (27)
                                                                                        -----------     -----------
                                                                                               97             (231)
                                                                                        -----------     -----------
Other comprehensive income (loss), net of income taxes
  of $62 and $(148), respectively..............................                               148             (272)
                                                                                        -----------     -----------

Comprehensive income...........................................                         $  14,876        $  12,799
                                                                                        -----------     -----------





   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,
                                                                                      2007            2006
                                                                                   ------------    -----------
Cash flows from operating activities:
                                                                                             
Net income.......................................................................  $  14,728       $   13,071
Adjustments to reconcile net income to net cash provided
  by operating activities:
  Benefit for deferred income taxes..............................................        (42)            (108)
  Depreciation and amortization..................................................      2,090            2,043
                                                                                   ------------    -----------
  Cash provided by operating activities before changes in assets and
   liabilities...................................................................     16,776           15,006
  Decrease in Membership fees....................................................         40              442
  (Increase) decrease in inventories.............................................         (4)             275
  Decrease in refundable income taxes............................................        653                -
  Increase in deferred member and associate service costs........................     (1,767)            (979)
  Increase in other assets.......................................................       (215)          (1,129)
  Increase in accrued Membership benefits........................................        185              181
  Increase in deferred revenue and fees..........................................      1,274              581
  Increase in other non-current liabilities......................................        312              294
  Increase in income taxes payable...............................................      6,143            4,610
  Increase (decrease) in accounts payable and accrued expenses...................        708           (1,004)
                                                                                   ------------    -----------
    Net cash provided by operating activities....................................     24,105           18,277
                                                                                   ------------    -----------
Cash flows from investing activities:
  Additions to property and equipment............................................     (1,252)          (2,628)
  Purchases of investments - available for sale..................................    (41,692)          (6,935)
  Maturities and sales of investments - available for sale.......................     42,117            1,604
                                                                                   ------------    -----------
    Net cash used in investing activities........................................       (827)          (7,959)
                                                                                   ------------    -----------
Cash flows from financing activities:
  Proceeds from exercise of stock options........................................        858              365
  Tax benefit on exercise of stock options.......................................        364              172
  Decrease in capital lease obligations..........................................       (325)              (5)
  Common stock dividends paid....................................................          -           (4,643)
  Repayments of debt.............................................................     (4,609)          (4,797)
  Purchases and retirement of treasury stock.....................................    (13,990)         (16,165)
                                                                                   ------------    -----------
    Net cash used in financing activities .......................................    (17,702)         (25,073)
                                                                                   ------------    -----------

Net increase (decrease) in cash and cash equivalents.............................      5,576          (14,755)
Cash and cash equivalents at beginning of period.................................     12,031           33,957
                                                                                   ------------    -----------
Cash and cash equivalents at end of period.......................................  $  17,607       $   19,202
                                                                                   ------------    -----------

Supplemental disclosure of cash flow information:
  Cash paid for interest.........................................................  $   1,904       $      666
                                                                                   ------------    -----------
  Cash paid for income taxes.....................................................  $     158       $    2,059
                                                                                   ------------    -----------



   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 2006 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, 2007, and for the three month periods ended March 31, 2007 and 2006, 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, 2007 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
     Beginning  in the  second  quarter  of 2001  multiple  lawsuits  were filed
against us, certain officers,  employees,  sales associates and other defendants
in various  Mississippi state courts by current or former members seeking actual
and punitive  damages for alleged  breach of contract,  fraud and various  other
claims in connection with the sale of Memberships. At one time, we were aware of
11 separate lawsuits involving approximately 400 plaintiffs in multiple counties
in Mississippi. These cases seek varying amounts of actual and punitive damages.
We tried  three  separate  lawsuits in  Mississippi.  On  September  11, 2006 we
reached a settlement  agreement with counsel for the more than 400 plaintiffs in
numerous pending cases in Mississippi. For an amount significantly less than our
then accrued  reserves of $2.5  million,  all pending  litigation  against us is
being  resolved in  Mississippi,  including the Barbara Booth v. Pre-Paid  Legal
Services,  Inc.  case in which the $9.9  million  punitive  damage  verdict  was
entered.  Settlement  and  dismissal of almost all pending  litigation  has been
approved by the plaintiffs.

     On March  27,  2006 we  received  a  complaint  filed by a former  provider
attorney  law  firm in  Davidson  County,  Tennessee  seeking  compensatory  and
punitive  damages on the basis of allegations of breach of contract.  On May 15,
2006 the trial court dismissed plaintiff's complaint in its entirety.  Plaintiff
filed a notice of appeal on June 13, 2006.  The matter is set for oral  argument
in May 2007. The ultimate outcome of this matter is not determinable.

     On March 23, 2007 we received a Civil Investigative Demand from the Federal
Trade Commission  requesting  information  relating to our Identity Theft Shield
and ADRS Program.  We are working with the Federal  Trade  Commission to resolve
the matter. 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, 2007 was $75,000. We believe that we have meritorious  defenses in all
pending  cases  and will  vigorously  defend  against  the  plaintiffs'  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  $5.7  million.  The Canadian  taxing  authorities
contend  commission  deductions should be matched with the membership revenue as
received,  we contend these commissions are deductible when paid. Under Canadian
tax laws, our commission  payments are treated as a prepaid expense. 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 have challenged our allocation of general and administrative
expenses  to  Canadian  operations.  We contend  the  allocation  of general and
administrative  expenses,  based on the  percentage of Canadian new  memberships
written and the Canadian percentage memberships in force, is reasonable. 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, 2007
was $477,000.  As stated above, we believe that we have reasonable basis for our
tax position  relative to these items,  however,  it is possible that an adverse
outcome  could have an adverse  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 13
million  shares  during  subsequent  board  meetings.  At March 31,  2007 we had
purchased 11.7 million  treasury shares under these  authorizations  for a total
consideration  of $310.0  million,  an average  price of $26.49  per  share.  We
purchased  and formally  retired  328,823  shares of our common stock during the
2007 first quarter for $14.0  million,  or an average price of $42.55 per share,
reducing our common stock by $3,288 and our retained  earnings by $14.0 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:                                                                          2007          2006
                                                                                                ----------    ----------
Earnings:
---------
                                                                                                        
Net income...........................................................                           $ 14,728      $ 13,071
                                                                                                ----------    ----------
Shares:
-------
Weighted average shares outstanding..................................                             13,541        15,430
                                                                                                ----------    ----------
Diluted Earnings Per Share:
Earnings:
---------
Net income...........................................................                           $ 14,728      $ 13,071
                                                                                                ----------    ----------
Shares:
-------
Weighted average shares outstanding..................................                             13,541        15,430
Assumed exercise of options..........................................                                 76           142
                                                                                                ----------    ----------
Weighted average number of shares, as adjusted.......................                             13,617        15,572
                                                                                                ----------    ----------

Shares issued pursuant to option exercises...........................                                 40            22
                                                                                                ----------    ----------


     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
months ended March 31, 2007 and 2006.



Note 5 - Recently Issued Accounting Pronouncements
     We adopted FASB  Interpretation  48,  Accounting for  Uncertainty in Income
Taxes  ("FIN  48"),  on January 1, 2007.  The  adoption of FIN 48 did not have a
material effect on our consolidated financial position or results of operations.

     We and our subsidiaries  are subject to U.S.  federal income tax,  Canadian
income tax, as well as income tax of multiple state and local jurisdictions. Our
2003 - 2006 U.S.  federal  income tax returns  remain open to examination by the
Internal Revenue Service (IRS). Our state and local income tax returns for years
1999  through  2006 remain  open to  examination  by the state and local  taxing
authorities.  Canadian  income tax returns for 1999 through  2002 are  currently
under  examination  and  years  1999 - 2006  are  open to  examination.  The IRS
examined our U.S. federal income tax return for 2004 resulting in no recommended
adjustments to the tax return.

     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  $5.7  million.  The Canadian  taxing  authorities
contend  commission  deductions should be matched with the membership revenue as
received,  we contend these commissions are deductible when paid. Under Canadian
tax laws, our commission  payments are treated as a prepaid expense. 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 have challenged our allocation of general and administrative
expenses  to  Canadian  operations.  We contend  the  allocation  of general and
administrative  expenses,  based on the  percentage of Canadian new  memberships
written and the Canadian percentage memberships in force, is reasonable. 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, 2007
was $477,000.  As stated above, we believe that we have reasonable basis for our
tax position  relative to these items,  however,  it is possible that an adverse
outcome  could have an adverse  effect upon our financial  condition,  operating
results or cash flows in particular quarterly or annual periods.

     We are  continuing our practice of recognizing  interest  and/or  penalties
related to income tax matters in general and administrative expenses.

     In September  2006, the FASB issued SFAS No. 157, Fair Value  Measurements.
SFAS No. 157 defines fair value,  establishes  a framework  for  measuring  fair
value, and expands  disclosures  about fair value  measurements.  This statement
clarifies  how to  measure  fair  value  as  permitted  under  other  accounting
pronouncements  but does not require any new fair value  measurements.  However,
for some  entities,  the  application  of this  statement  will  change  current
practice.  We will be  required  to adopt SFAS No. 157 as of January 1, 2008 and
are currently  evaluating the impact of SFAS No. 157 and have not yet determined
the effect on our earnings or financial position.

     In March 2006,  the FASB Emerging  Issues Task Force issued Issue 06-3, How
Sales Taxes  Collected From Customers and Remitted to  Governmental  Authorities
Should Be Presented in the Income Statement ("EITF 06-3"). A tentative consensus
was reached that a company should disclose its accounting policy (i.e., gross or
net presentation) regarding presentation of taxes within the scope of EITF 06-3.
If taxes are significant, a company should disclose the amount of such taxes for
each  period for which an income  statement  is  presented.  Sales taxes are not
significant  and  our  accounting  policy  is to  present  them  on a net  basis
(excluded from revenues).

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial  Assets and  Financial  Liabilities--Including  an  amendment  of FASB
Statement  No.  115." SFAS No. 159 permits  entities  to choose to measure  many
financial  instruments and certain other items at fair value.  Unrealized  gains
and losses on items for which the fair value  option  has been  elected  will be
recognized  in  earnings  at each  subsequent  reporting  date.  SFAS No. 159 is
effective for us January 1, 2008. We are evaluating the impact that the adoption
of SFAS No. 159 will have on our consolidated financial statements.


Note 6 - Notes Payable
     On June 23, 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,
2007, we have 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. Since receiving the net proceeds, we used a portion of them to purchase
1.2 million shares of treasury  stock at a cost of $49.8 million,  or an average
price of $40.94 per share. The remaining proceeds will be used primarily to fund
further share repurchases.

     The Term  Facility  was fully  funded on June 23, 2006 and  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 plus 150 basis  points or at the LIBOR plus 250 basis
points.  The interest rate at March 31, 2007 was 7.82%. 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.  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, subject to a prepayment premium of 1% in the first
year,  0.5% in the second year and none  thereafter,  with a reduction of 50% of
the  prepayment  premium if the  prepayment is from the proceeds of another loan
provided by Wells Fargo.

     The Senior Loan is  guaranteed  by our  non-regulated  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 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; and
     *    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 were in compliance with these covenants at March 31, 2007.

     In addition to  customary  events of default,  it is an event of default 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 used  the  proceeds  of the  Term  Facility  to  repay  in full the $5.3
remaining balance of our existing stock loan with Bank of Oklahoma,  N.A., First
United Bank and Trust and Comerica  Bank,  which was  originated in 2003 and the
$10 million we borrowed from Bank of Oklahoma,  N. A. earlier in June 2006.  The
related loan  agreements were thereby  terminated and the associated  collateral
was  released.  As a part of the  transaction,  we also amended our existing $20
million  real  estate  loan  which  we  incurred  in  2002  to  finance  our new
headquarters  building  in Ada,  Oklahoma  to  extend  the final  maturity  from
September 2008 to August 2011. This loan, with interest at the 30 day LIBOR rate
plus 2.25%, adjusted monthly, remains secured by a mortgage on our headquarters,
but the additional  security interest in our membership  contracts was released.
The interest  rate at March 31, 2007 was 7.57%.  We will continue to be required
to make the same monthly  payments on this loan of $191,000  plus  interest with
the balance of approximately $2.3 million due at maturity.  The real estate loan
was also  amended to conform  the  financial  covenants  to those  under the new
Senior Loan.

     Our $11.5  million  aircraft  loan was fully  funded in November  2005 with
interest payable monthly at the 30 day LIBOR rate plus 1.75%,  adjusted monthly,
and requires monthly principal  installments of $96,000 which began December 31,
2005 with the remaining  balance payable in a final installment due November 30,
2012. The interest rate at March 31, 2007 was 7.07%. The loan is  collateralized
by the  aircraft  purchased.  In addition  to  customary  events of default,  if
Harland C. Stonecipher  ceases to be our Chief Executive Officer for a period of
90 consecutive days an event of default will occur.

         A schedule of outstanding balances as of March 31, 2007 is as follows:



                                                                                            
                          Senior loan................................                          $  65,000
                          Real estate loan...........................                             12,381
                          Aircraft loan..............................                              9,980
                                                                                               ----------
                          Total notes payable........................                             87,361
                          Less: Current portion of notes payable.....                            (18,437)
                                                                                               ----------
                          Long term portion..........................                          $  68,924
                                                                                               ----------





         A schedule of future maturities as of March 31, 2007 is as follows:



                          Repayment Schedule commencing
                              April 2007:
                          -------------------------------------------
                                                                                         
                          Year 1.....................................                          $  18,437
                          Year 2.....................................                             18,437
                          Year 3.....................................                             18,437
                          Year 4.....................................                             18,437
                          Year 5.....................................                              9,390
                          Thereafter.................................                              4,223
                                                                                               ----------
                          Total notes payable........................                          $  87,361
                                                                                               ----------


Note 7 - Share-based Compensation

     During the three  months ended March 31,  2007,  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, 2007....................           $  23.26            273,040
                         
  Granted.......................................                  -                  -
  Cancelled.....................................              22.87             (5,597)
  Exercised.....................................              24.27            (45,443)
                                                        --------------     ---------------
Outstanding, March 31, 2007.....................           $  23.07            222,000               1.02          $ 6,003
                                                        --------------     ---------------    ----------------    ---------------
Options exercisable as of March 31, 2007........           $  23.07            222,000               1.02          $ 6,003
                                                        --------------     ---------------    ----------------    ---------------


     Other  information  pertaining to option  activity  during the three months
ended March 31, 2007 and 2006 was as follows:




                                                                       March 31, 2007        March 31, 2006
                                                                     ------------------    ------------------
                                                                                       
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.................          $934                  $156



     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.

     In December 2004, the Financial  Accounting Standards Board issued SFAS No.
123R,  Share-Based Payment ("SFAS No. 123R" or the "Statement").  This Statement
is a revision of SFAS No. 123,  Accounting for Stock-Based  Compensation  ("SFAS
123"), and supersedes Accounting Principles Board Opinion No. 25, Accounting for
Stock  Issued  to  Employees  ("APB  No.  25")  and its  related  implementation
guidance.  On January 1, 2006, we adopted the  provisions of SFAS No. 123R using
the modified  prospective  method. SFAS No. 123R focuses primarily on accounting
for  transactions  in which an entity obtains  employee  services in share-based
payment transactions.  The Statement requires entities to recognize compensation
expense for awards of equity  instruments  to employees  based on the grant-date
fair  value of those  awards  (with  limited  exceptions).  SFAS No.  123R  also
requires the benefits of tax  deductions  in excess of  recognized  compensation
expense to be reported as financing cash flows, rather than as an operating cash
flow as prescribed under the prior accounting  rules.  This requirement  reduces
net operating cash flows and increases net financing cash flows in periods after
adoption.  Total cash flow remains  unchanged from what would have been reported
under prior accounting rules.

     Prior to the adoption of SFAS No. 123R,  we followed  the  intrinsic  value
method in accordance  with APB No. 25 to account for our employee stock options.
Accordingly,  no  compensation  expense was  recognized in  connection  with the
issuance of stock  options under any of our stock option plans for periods ended
prior to January 1, 2006. The adoption of SFAS No. 123R primarily  resulted in a
change in our method of recognizing the fair value of share-based  compensation.
Our  adoption  of SFAS No.  123R did not  result in our  recording  compensation
expense  for  employee  stock  options,   since  all  options  had  vested,   no
modifications were made to existing options and no new options were granted.

     We do not  expect to grant any  additional  employee  options or modify any
existing options and therefore recognize any share-based  payments' expense from
the  issuance of employee  stock  options in 2007.  The options  outstanding  at
December 31, 2005 did not and will not impact 2006 or 2007 consolidated  results
of operations and financial position since all option-holders  were fully vested
in such options at December 31, 2005.

ITEM 1A.      RISK FACTORS
--------------------------
     There  are a  number  of risk  factors  that  could  affect  our  financial
condition or results of operations. See Note 2 - Contingencies and Part II, Item
1 - Legal Proceedings.  Please refer to page 14 and 15 of our 2006 Annual Report
on Form 10-K for a description  of other risk  factors.  There have not been any
material changes in the risk factors disclosed in the Annual Report.

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,  2006,  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 2007  compared to the first quarter of 2006 and the fourth
quarter of 2006  (Table  amounts in 000's).  The sum of the  percentages  in the
tables may not total due to rounding.



 Three Months Ended March 31, 2007     Three                      %          %        Three                   Three
           compared to                 Months                   Change     Change     Months                  Months
 Three Months Ended March 31, 2006     Ended        % of        from       from       Ended       % of        Ended        % of
          and compared to              March 31,     Total      Prior     Sequential  March 31,    Total      Dec. 31,     Total
 Three Months Ended December 31, 2006      2007       Revenue      Year    Period        2006     Revenue       2006      Revenue
------------------------------------- -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------
Revenues:
                                                                                                       
  Membership fees....................  $ 103,881       92.7         2.1        0.1     $ 101,740        92.5   $ 103,757        92.9
  Associate services.................      7,064        6.3         1.5        5.3         6,963         6.3       6,706         6.0
  Other..............................      1,139        1.0        (9.4)      (5.8)        1,257         1.1       1,209         1.1
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------
                                         112,084       100.0        1.9        0.4       109,960       100.0     111,672       100.0
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------
Costs and expenses:
  Membership benefits................     36,751       32.8         3.2       (0.9)       35,628        32.4      37,075        33.2
  Commissions........................     30,532       27.2        (4.2)      (0.7)       31,885        29.0      30,739        27.5
  Associate services and direct marketing  6,375        5.7       (12.7)     (14.6)        7,302         6.6       7,463         6.7
  General and administrative.........     12,747       11.4         2.2        3.1        12,467        11.3      12,362        11.1
  Other, net.........................      3,744        3.3        37.5        1.8         2,723         2.5       3,677         3.3
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------

                                          90,149       80.4        (0.2)      (1.3)       90,005        81.9      91,316        81.8
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------

Income before income taxes...........     21,935        19.6         9.9        7.8       19,955        18.1      20,356        18.2
Provision for income taxes...........      7,207         6.4         4.7        1.2        6,884         6.3       7,125         6.4
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------
Net income...........................  $  14,728        13.1        12.7       11.3      $13,071        11.8     $13,231        11.9
                                      -----------  ---------- ----------  ----------  ----------  ----------  ----------  ----------










                                                                                          Three Months Ended
New Memberships:                                                             3/31/2007         12/31/2006          3/31/2006
----------------                                                            -----------      ------------        -----------
                                                                                                          
New legal service membership sales..........................................  147,742           131,628            158,426
New "stand-alone" IDT membership sales......................................   13,788             8,010              6,800
                                                                             ---------        ----------         ---------
         Total new membership sales.........................................  161,530           139,638            165,226
                                                                             ---------        ----------         ---------
New "add-on" IDT membership sales...........................................   93,204            88,255            100,405
Average Annual Membership fee...............................................  $309.86           $323.54            $327.43

Active Memberships:
Active legal service memberships at end of period.......................... 1,477,604         1,473,710          1,488,308
Active "stand-alone" IDT memberships at end of period (see note below)......   73,525            65,030             54,453
                                                                            ---------         ----------         ---------
         Total active memberships at end of period..........................1,551,129         1,538,740          1,542,761
                                                                            ---------         ----------         ---------



Active "add-on" IDT memberships at end of period (see note below)...........  562,075           540,253            485,246
New Sales Associates:
New sales associates recruited..............................................   31,043            35,311             49,776
Average enrollment fee paid by new sales associates.........................  $103.13            $49.47             $49.82
Average Membership fee in force:
Average Annual Membership fee...............................................  $294.17           $293.00            $288.92
Note - reflects 6,178 net transfers from "add-on" status to "stand-alone" status during the 2007 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 2007 compared to First Quarter of 2006
--------------------------------------------------------------------------------
     Net income  increased  13% for the first  quarter of 2007 to $14.7  million
from $13.1  million  for the prior  year's  first  quarter  primarily  due to an
increase in  membership  fees of $2.1 million and a decrease in  commissions  of
$1.4  million  partially  offset by an increase in  Membership  benefits of $1.1
million and an increase in other, net expenses of $1.0 million. Diluted earnings
per share increased 29% to $1.08 per share from 84 cents per share for the prior
year's  comparable  quarter  due to  the  13%  increase  in  net  income  and an
approximate  13%  decrease  in the  weighted  average  number of diluted  shares
outstanding.

     Membership  fees  totaled  $103.9  million  during the 2007  first  quarter
compared to $101.7  million for 2006,  an  increase 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 2% during the three
months ended March 31, 2007 to 161,530 from 165,226 during the comparable period
of 2006. At March 31, 2007,  there were  1,551,129  active  Memberships in force
compared to 1,542,761 at March 31, 2006,  an increase of 1%.  Additionally,  the
average annual fee per Membership has increased from $289 for all Memberships in
force at March 31, 2006 to $294 for all  Memberships in force at March 31, 2007,
primarily as a result of a larger number of Identity Theft Shield memberships.

     Although  total new  associates  enrolled  during the first quarter of 2007
decreased 38% compared to the 2006 period,  associate services revenue increased
by approximately  $101,000 to $7.1 million.  New associates enrolled were 31,043
during  the 2007  period  compared  to 49,776 for the same  period of 2006,  but
average  enrollment fees paid by new sales associates  increased from $50 during
the 2006 period to $103 during the 2007 quarter due to a higher  enrollment  fee
in place for most of the 2007 first quarter.  We expect to continue some form of
reduced enrollment programs for the remainder of the year.  Associate enrollment
fees  increased  from $2.7 million for the first quarter of 2006 to $3.4 million
during the comparable  period of 2007.  The eService fees decreased  slightly to
$3.0 million  during the first  quarter of 2007 compared to $3.2 million for the
comparable period of 2006.  Future revenues from associate  services will depend
primarily on the number of new associates  enrolled,  the average enrollment fee
paid 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  9% from $1.3  million for the 2006 period to $1.1
million for the 2007 period.

     Total  revenues  increased 2% to $112.1  million for the three months ended
March 31, 2007 from $110.0 million during the comparable period of 2006 due to a
$2.1 million increase in Membership fees.

     Membership  benefits totaled $36.8 million for the three months ended March
31,  2007  compared  to $35.6  million for the  comparable  period of 2006,  and
represented  35% of Membership fees for both periods.  This  Membership  benefit
ratio (Membership benefits as a percentage of Membership fees) should be reduced
going forwward 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.

     Commissions  to  associates  decreased  4% to $30.5  million  for the three
months ended March 31, 2007 compared to $31.9 million for the comparable  period
of 2006,  and  represented  29% and 31% of  Membership  fees for the  respective
periods.  Commissions to associates are primarily dependent on the number of new
memberships  sold,   including  add-on   membership  sales,   during  a  period.
Commissions to associates  per new membership  sold were $189 per membership for
the three months ended March 31, 2007 compared to $193 for the comparable period
of 2006. The average  commission per new membership sold varies depending on the
compensation  structure  that is in place at the time a new  membership is sold,
the amount of the Membership fee and the amount of any charge-backs  (recoupment
of previous  commission  advances)  that are  deducted  from  amounts that would
otherwise be paid to the various sales  associates  that are compensated for the
membership sale.  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 decreased to $6.4 million
for the three months  ended March 31, 2007 from $7.3 million for the  comparable
period of 2006.  The  decrease  was  primarily a result of  decreased  costs for
incentive  trips and  bonuses  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,
2007  and  2006  were  $12.7  million  and  $12.5  million,   respectively,  and
represented 12% of Membership fees for both periods.

     Other  expenses,   net,  which  include   depreciation  and   amortization,
litigation  accruals,  interest  expense and premium  taxes  reduced by interest
income,  were $3.7 million for the three months ended March 31, 2007 compared to
$2.7  million for the 2006  comparable  period.  Depreciation  increased to $2.1
million  for the first  quarter  of 2007 from $2.0  million  for the  comparable
period of 2006.  Interest  expense  increased  to $1.9  million  during the 2007
period  from  $678,000  during  the  comparable  period  of 2006 as a result  of
additional  debt.  Premium  taxes  increased  from $389,000 for the three months
ended March 31, 2006 to $506,000  for the  comparable  period of 2007.  Interest
income increased  $345,000 to $732,000 for the three months ended March 31, 2007
from $387,000 for the comparable  period of 2006, due to an increase in cash and
investment  balances.  We have  recorded a  provision  for income  taxes of $7.2
million  (32.9% of pretax  income) and $6.8 million (34.4% of pretax income) for
the three  months ended March 31, 2007 and 2006,  respectively.  The decrease in
the tax rate is primarily due to an increase in non taxable interest income.


Results of Operations - First Quarter of 2007 compared to Fourth Quarter of 2006
--------------------------------------------------------------------------------
     First quarter 2007  membership  fees increased  slightly,  less than 1%, to
$103.9  million from $103.8  million for the fourth  quarter of 2006.  Associate
services  revenues  increased  during  the 2007 first  quarter by  approximately
$358,000 to $7.1  million  from $6.7  million  for the 2006  fourth  quarter and
associate  services  and direct  marketing  expenses  decreased  by $1.1 million
during the same period.  Membership  benefits totaled $36.8 million in the first
quarter of 2007  compared  to $37.1  million  for the 2006  fourth  quarter  and
represented 35% and 36%,  respectively,  of membership fees for the two periods.
Commissions  to  associates  totaled  $30.5  million in the 2007  first  quarter
compared to $30.7 million for the 2006 fourth  quarter and  represented  29% and
30%,  respectively,  of  membership  fees  for  the  two  periods.  General  and
administrative  expenses  increased  slightly  during the 2007 first  quarter to
$12.7  million  compared  to $12.4  million  for the  2006  fourth  quarter  and
represented 12% of membership fees for both periods.


Liquidity and Capital Resources
-------------------------------
     General
     Consolidated  net cash provided  from  operating  activities  for the first
three months of 2007  increased $5.8 million to $24.1 million from $18.3 million
for the 2006  period,  while cash  provided  from  operating  activities  before
changes in assets and liabilities only increased $1.8 million from $15.0 million
to $16.8  million.  The increase of $1.8  million  resulted  primarily  from the
increase in net income of $1.7 million.

     Consolidated  net cash used in  investing  activities  was $827,000 for the
first three months of 2007 compared to $8.0 million for the comparable period of
2006.  This $7.1 million  change in investing  activities  resulted  from a $1.4
million  decrease in  additions to property and  equipment  and a $40.5  million
increase in the maturities and sales of investments  partially offset by a $34.8
million increase in investment purchases.

     Net cash used in financing activities during the first three months of 2007
was $17.7 million  compared to $25.1 million for the comparable  period of 2006.
This $7.4 million change was primarily comprised of the $4.6 million decrease in
common  stock  dividends  paid and the $2.2  million  decrease in  purchases  of
treasury stock.

     We purchased and formally retired 328,823 shares of our common stock during
the 2007 first  quarter  for $14.0  million,  or an average  price of $42.55 per
share,  reducing our common  stock by $3,288 and our retained  earnings by $14.0
million.  We had positive working capital of $22.9 million at March 31, 2007, an
increase  of $5.1  million  compared  to  working  capital  of $17.9  million at
December 31, 2006. The increase was primarily due to a $5.6 million  increase in
cash and cash equivalents and an increase of $6.5 million in the current portion
of  available-for-sale  investments  partially  offset  by an  increase  of $6.1
million in income taxes payable,.  The $22.9 million positive working capital at
March  31,  2007  would  have  been a $32.6  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 short term or the long
term.

     At March 31, 2007 we reported  $87.0  million in cash and cash  equivalents
and unpledged  investments  compared to $81.8 million at December 31, 2006.  Our
investments  consist of common  stocks,  investment  grade (rated Baa or higher)
bonds primarily  issued by  corporations,  the United States  Treasury,  federal
agencies,   federally   sponsored   agencies   and   enterprises   as   well  as
mortgage-backed  securities,  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, 2007, we advanced commissions, net
of  chargebacks,  of $30.7  million on new  Membership  sales  compared to $31.2
million for the same period of 2006. 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, 2007, and related activity for the three month period
then ended, were:



                                                                                          (Amounts in 000's)
                                                                                          ------------------
                                                                                       
Beginning unearned advance commission payments (1)...............................            $  188,647
Advance commission payments, net.................................................                30,681
Earned commissions applied.......................................................               (30,895)
Advance commission payment write-offs............................................                  (940)
                                                                                          ------------------
Ending unearned advance commission payments before
  estimated unrecoverable payments (1)...........................................               187,493
Estimated unrecoverable advance commission payments (1)..........................               (40,987)
                                                                                          ------------------
Ending unearned advance commission payments, net (1).............................            $  146,506
                                                                                          ------------------



     (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 $51.0 million.
As such, at March 31, 2007 future commission payments and related expense should
be  reduced  as  unearned  advance  commission  payments  of $95.5  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  expected  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, 2007 of
$87.0  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.
At March 31, 2007,  none of these  entities had funds  available  for payment of
substantial dividends without the prior approval of the insurance  commissioner.
We  received a $1.6  million  dividend  from LSPV  during  March 2007 and a $7.4
million dividend from PPLCI during April 2007.

     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, 2006.

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, 2006.  There were no  significant
changes in the application of critical  accounting  policies or estimates during
the first three months of 2007. 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 as we
have existing authorization from the Board to purchase an additional 1.3 million
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,  2007 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, 2006. 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
--------------------------------------------------------------------
     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
creditworthiness  of  the  issuer,   prepayment  options,   relative  values  of
alternative  investments,  liquidity of the  instrument and other general market
conditions.

     As of  March  31,  2007,  substantially  all of  our  investments  were  in
investment   grade  (rated  Baa  or  higher)   fixed-maturity   investments  and
interest-bearing  money market accounts including certificates of deposit. 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 in        Estimated fair value
                                                            (In '000's)           interest rate               after hypothetical
                                                            Fair value         (bp = basis points)           change in interest rate
                                                           --------------     -------------------------    -------------------------
                                                                                                        
Fixed-maturity investments at March 31, 2007 (1).......    $  22,272           100 bp increase                   $  21,435
                                                                               200 bp increase                      20,606
                                                                                50 bp decrease                      22,686
                                                                               100 bp decrease                      23,101

Fixed-maturity investments at December 31, 2006 (1)....    $  31,420           100 bp increase                   $  30,170
                                                                               200 bp increase                      28,975
                                                                                50 bp decrease                      31,965
                                                                               100 bp decrease                      32,568
-------------------


(1)  Excluding  short-term  investments  with  a fair  value  of  $51.2  million
     (Certificates  of deposit,  auction rate  securities  and EURO deposits) at
     March 31, 2007 and $42.4 million at December 31, 2006.

     The table above illustrates,  for example,  that an instantaneous 200 basis
     point increase in market  interest rates at March 31, 2007 would reduce the
     estimated fair value of our  fixed-maturity  investments  by  approximately
     $1.7 million at that date. At December 31, 2006, an instantaneous 200 basis
     point  increase in market  interest  rates would have reduced the estimated
     fair value of our fixed-maturity  investments by approximately $2.7 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
     We are exposed to market risk related to changes in interest  rates.  As of
March 31, 2007, we had $87.4 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  $874,000.  As of March 31, 2007,  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.


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,  2007,  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, 2007 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 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 2007.



                                                                                   Total Number of               Maximum Number
                                                                                 Shares Purchased as           of Shares that May
                                  Total Number of                                 Part of Publicly              Yet Be Purchased
                                     of Shares           Average Price            Announced Plans or           Under the Plans or
          Period                    Purchased           Paid Per Share                Programs                    Programs (1)
----------------------         ---------------------  ---------------------  -----------------------------   -----------------------
                                                                                                     
January 2007..........               13,578               $  38.72                    13,578                        613,017
February 2007.........              108,391                  41.66                   108,391                        504,626
March 2007............              206,854                  43.26                   206,854                      1,297,772
Total.................         ---------------------  ---------------------  -----------------------------
                                    328,823               $  42.55                   328,823
-----------                    ---------------------  ---------------------  -----------------------------


(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 13 million shares.
     The most recent  authorization was for 1 million additional shares on March
     7,  2007  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:



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  (Incorporated 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 (Incorporated 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    Purchase  Agreement  dated  August  19, 2005  between  us  and Learjet, Inc., with Addendum. (Incorporated by reference to
          Exhibit 10.1 of the Company's Report on Form 8-K dated August 19, 2005)

 10.13    Loan Agreement dated November 30, 2005 between Pre-Paid legal Services, Inc and Bank of Oklahoma, N.A.  and  First  United
          Bank and Trust (Incorporated by reference to Exhibit 10.1 of the Company's Report on Form 8-K dated November 30, 2005)

 10.14    Aircraft Chattel Mortgage, Security Agreement and Assignment of Rents  dated  November  30, 2005  between  Pre-Paid  legal
          Services, Inc and Bank of Oklahoma, N.A. and First United Bank and Trust (Incorporated by reference to Exhibit 10.2 of the
          Company's Report on Form 8-K dated November 30, 2005)

 10.15    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)

 10.16    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)

 10.17    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)

 10.18    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)

 10.19    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)

 21.1     List of Subsidiaries of the Company (Incorporated by reference to Exhibit 21.1 of our Annual Report on  Form 10-K  for the
          year ended December 31, 2005)

 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 23, 2007               /s/ Harland C. Stonecipher
                                   --------------------------------------------
                                   Harland C. Stonecipher
                                   Chairman, Chief Executive
                                   Officer and President
                                   (Principal Executive Officer)

Date: April 23, 2007               /s/ Randy Harp
                                   ---------------------------------------------
                                   Randy Harp
                                   Chief Operating Officer
                                   (Duly Authorized Officer)

Date: April 23, 2007               /s/ Steve Williamson
                                   ---------------------------------------------
                                   Steve Williamson
                                   Chief Financial Officer
                                   (Principal Financial and
                                   Accounting Officer)




                                  Exhibit 31.1

                                  CERTIFICATION
                                  -------------

I, Harland C. Stonecipher, Chief Executive Officer, 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 23, 2007               /s/ Harland C. Stonecipher
                                   ---------------------------
                                   Harland C. Stonecipher
                                   Chairman, Chief Executive
                                   Officer and President






                                  Exhibit 31.2

                                  CERTIFICATION
                                  -------------

I, Steve Williamson, Chief Financial Officer, 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 23, 2007               /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, 2007 (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 23, 2007               /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, 2007 (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 23, 2007               /s/ Steve Williamson
                                   -------------------------------
                                   Steve Williamson
                                   Chief Financial Officer