================================================================================
                                  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 September 30, 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 October 19, 2007 was 12,882,462.
================================================================================





                          PRE-PAID LEGAL SERVICES, INC.

                                    FORM 10-Q

                    For the Quarter Ended September 30, 2007


                                    CONTENTS



Part I.  Financial Information

         Item 1.  Financial Statements:

                  a) Consolidated Balance Sheets
                     as of September 30, 2007 (Unaudited) and December 31, 2006

                  b) Consolidated Statements of Income (Unaudited)
                     for the three month and nine month periods
                     ended September 30, 2007 and 2006

                  c) Consolidated Statements of Comprehensive Income (Unaudited)
                     for the three month and nine month periods
                     ended September 30, 2007 and 2006

                  d) Consolidated Statements of Cash Flows (Unaudited)
                     for the nine month periods ended September 30, 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

                                                                                           September 30,     December 31,
                                                                                               2007              2006
                                                                                           --------------    --------------
Current assets:                                                                             (Unaudited)
                                                                                                       
  Cash and cash equivalents............................................................     $    29,030      $     12,031
  Available-for-sale investments, at fair value........................................          13,325            42,275
  Membership fees receivable...........................................................           6,128             5,518
  Inventories..........................................................................           1,193             1,337
  Refundable income taxes..............................................................           1,196               653
  Deferred member and associate service costs..........................................          16,301            15,879
  Deferred income taxes................................................................           5,008             4,235
  Other assets.........................................................................           7,370             6,404
                                                                                           --------------    --------------
      Total current assets.............................................................          79,551            88,332
Available-for-sale investments, at fair value..........................................          26,402            27,461
Investments pledged....................................................................           4,350             4,145
Property and equipment, net............................................................          56,767            59,643
Deferred member and associate service costs............................................           2,447             2,636
Other assets...........................................................................           6,681             6,330
                                                                                           --------------    --------------
        Total assets...................................................................     $   176,198      $    188,547
                                                                                           --------------    --------------


                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Membership benefits..................................................................     $    12,218     $      11,995
  Deferred revenue and fees............................................................          27,569            26,040
  Current portion of capital leases payable............................................              22               340
  Current portion of notes payable.....................................................          18,241            18,437
  Accounts payable and accrued expenses................................................          15,034            13,645
                                                                                           --------------    --------------
    Total current liabilities..........................................................          73,084            70,457
                                                                                           --------------    --------------
  Capital leases payable...............................................................             940               957
  Notes payable........................................................................          60,053            73,533
  Deferred revenue and fees............................................................           2,447             2,636
  Deferred income taxes................................................................           4,765             4,897
  Other non-current liabilities........................................................           6,130             5,207
                                                                                           --------------    --------------
      Total liabilities................................................................         147,419           157,687
                                                                                           --------------    --------------
Stockholders' equity:
  Common stock, $.01 par value; 100,000 shares authorized; 17,738 and
    18,488 issued at September 30, 2007 and December 31, 2006, respectively............             177               185
  Retained earnings....................................................................         126,049           129,413
  Accumulated other comprehensive income...............................................           1,581               290
  Treasury stock, at cost; 4,852 shares held at September 30, 2007 and
    December 31, 2006, respectively....................................................         (99,028)          (99,028)
                                                                                           --------------    --------------
      Total stockholders' equity.......................................................          28,779            30,860
                                                                                           --------------    --------------
        Total liabilities and stockholders' equity.....................................     $   176,198     $     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           Nine Months Ended
                                                                           September 30,               September 30,
                                                                      ------------------------    ------------------------
                                                                        2007          2006          2007          2006
                                                                      ----------    ----------    ----------    ----------
Revenues:
                                                                                                    
  Membership fees................................................     $  107,713    $  103,592    $  318,530    $  308,443
  Associate services.............................................          6,032         6,368        19,064        20,151
  Other..........................................................          1,132         1,234         3,427         3,758
                                                                      ----------    ----------    ----------    ----------
                                                                         114,877       111,194       341,021       332,352
                                                                      ----------    ----------    ----------    ----------
Costs and expenses:
  Membership benefits............................................         37,475        36,578       111,153       108,696
  Commissions....................................................         33,646        31,393        98,421        96,023
  Associate services and direct marketing........................          8,902         7,144        21,959        22,030
  General and administrative.....................................         13,717        12,229        39,847        37,716
  Other, net.....................................................          3,584         2,932        10,621         8,555
                                                                      ----------    ----------    ----------    ----------
                                                                          97,324        90,276       282,001       273,020
                                                                      ----------    ----------    ----------    ----------

Income before income taxes.......................................         17,553        20,918        59,020        59,332
Provision for income taxes.......................................          5,980         7,512        19,540        20,765
                                                                      ----------    ----------    ----------    ----------
Net income.......................................................     $   11,573    $   13,406    $   39,480    $   38,567
                                                                      ----------    ----------    ----------    ----------

Basic earnings per common share..................................     $     .89     $     .93     $    2.97     $    2.59
                                                                      ----------    ----------    ----------    ----------

Diluted earnings per common share................................     $     .88     $     .93     $    2.96     $    2.58
                                                                      ----------    ----------    ----------    ----------


   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        Nine Months Ended
                                                                        September 30,            September 30,
                                                                   ----------------------   -----------------------
                                                                      2007        2006         2007         2006
                                                                   ----------  ----------   ----------   ----------
                                                                                             
Net income.....................................................    $  11,573   $  13,406    $  39,480    $  38,567
                                                                   ----------  ----------   ----------   ----------

Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustment......................          529         (31)       1,133          160
                                                                   ----------  ----------   ----------   ----------
  Unrealized gains (losses) on investments:
    Unrealized holding gains (losses) arising during period....          158         358           (9)         (14)
    Reclassification adjustment for realized (gains) losses
      included in net income...................................           99         (15)         167            4
                                                                   ----------  ----------   ----------   ----------
                                                                         257         343          158          (10)
                                                                   ----------  ----------   ----------   ----------
Other comprehensive income, net of income taxes of $164 and
  $219 for the three months and $101 and $(6) for the nine
  months ended September 30, 2007 and 2006, respectively.......          786         312        1,291          150
                                                                   ----------  ----------   ----------   ----------

Comprehensive income...........................................    $  12,359   $  13,718    $  40,771    $  38,717
                                                                   ----------  ----------   ----------   ----------


   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)

                                                                                              Nine Months Ended
                                                                                                September 30,
                                                                                           -------------------------
                                                                                             2007          2006
                                                                                           -----------   -----------
Cash flows from operating activities:
                                                                                                   
Net income.............................................................................    $  39,480     $  38,567
Adjustments to reconcile net income to net cash provided by operating activities:
  (Benefit) provision for deferred income taxes........................................         (905)          310
  Depreciation and amortization........................................................        6,381         6,139
  Increase in Membership fees receivable...............................................         (610)         (324)
  Decrease in inventories..............................................................          144           346
  Increase in refundable income taxes..................................................         (543)          (19)
  Increase in deferred member and associate service costs..............................         (233)       (1,259)
  Increase in other assets.............................................................       (1,317)       (2,344)
  Increase in accrued Membership benefits..............................................          223           345
  Increase in deferred revenue and fees................................................        1,340           710
  Increase in other non-current liabilities............................................          923           881
  Decrease in income taxes payable.....................................................            -        (1,738)
  Increase (decrease) in accounts payable and accrued expenses.........................        2,528        (3,043)
                                                                                           -----------   -----------
    Net cash provided by operating activities..........................................       47,411        38,571
                                                                                           -----------   -----------
Cash flows from investing activities:
  Additions to property and equipment..................................................       (3,511)       (8,046)
  Purchases of investments - available for sale........................................     (188,465)      (88,843)
  Maturities and sales of investments - available for sale.............................      218,427        53,522
                                                                                           -----------   -----------
    Net cash provided by (used in) investing activities................................       26,451       (43,367)
                                                                                           -----------   -----------
Cash flows from financing activities:
  (Use) proceeds from exercise of stock options........................................          (84)          288
  Tax benefit on exercise of stock options.............................................          790           649
  Proceeds from issuance of debt.......................................................        9,556        85,000
  Decrease in capital lease obligations................................................         (335)         (315)
  Common stock dividends paid..........................................................            -        (4,643)
  Repayments of debt...................................................................      (23,232)      (26,891)
  Purchases and retirement of treasury stock...........................................      (43,558)      (48,889)
                                                                                           -----------   -----------
    Net cash (used in) provided by financing activities ...............................      (56,863)        5,199
                                                                                           -----------   -----------

Net increase in cash and cash equivalents..............................................       16,999           403
Cash and cash equivalents at beginning of period.......................................       12,031        33,957
                                                                                           -----------   -----------
Cash and cash equivalents at end of period.............................................    $  29,030     $  34,360
                                                                                           -----------   -----------

Supplemental disclosure of cash flow information:
  Cash paid for interest...............................................................    $   5,042     $   3,233
                                                                                           -----------   -----------
  Cash paid for income taxes...........................................................    $  20,317     $  21,633
                                                                                           -----------   -----------
  Purchases of treasury stock pursuant to tender offer.................................    $       -     $   6,584
                                                                                           -----------   -----------


   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
September  30,  2007,  and for the three  month  and nine  month  periods  ended
September  30,  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 and nine month periods ended  September 30, 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,  and on August 24, 2007 the Court of
Appeals  reversed  the ruling of the trial  court and  remanded  the suit to the
trial court for further proceedings. We filed a Petition for Rehearing which was
denied on  September  26,  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
September 30, 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.  During
July 2007 we received a settlement  offer from the Canadian  taxing  authorities
regarding  the general and  administrative  deductions  which if accepted  would
allow us to claim a deduction  on the  Canadian tax return for over 70% of these
items. This settlement offer would allow us to deduct the remaining 30% of these
items on our US federal tax returns. We have established an accrued liability we
believe will be sufficient  to cover the estimated tax  assessment in connection
with these items, which at September 30, 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 September 30, 2007 we had
purchased 12.2 million  treasury shares under these  authorizations  for a total
consideration  of $339.5  million,  an average  price of $27.73  per  share.  We
purchased  and formally  retired  357,439  shares of our common stock during the
2007 third quarter for $18.5  million,  or an average price of $51.82 per share,
reducing our common stock by $3,574 and our retained  earnings by $18.5 million.
See Note 6 below.  Given the current  interest rate  environment,  the nature of
other  investments  available  and our  expected  cash  flows,  we believe  that
purchasing  treasury shares enhances  shareholder value and may seek alternative
sources of  financing to continue or  accelerate  the  program.  Any  additional
treasury stock purchases will be made at prices that we consider  attractive and
at such times that we believe will not unduly impact our liquidity.


Note 4 - Earnings Per Share
     Basic  earnings per common share are computed by dividing net income by the
weighted  average  number  of  shares of common  stock  outstanding  during  the
respective  period.  Diluted  earnings per common share are computed by dividing
net income by the weighted average number of shares of common stock and dilutive
potential common shares  outstanding  during the respective period. The weighted
average number of common shares is increased by the number of dilutive potential
common  shares  issuable on the  exercise  of options  less the number of common
shares assumed to have been purchased with the proceeds from the exercise of the
options  pursuant to the treasury stock method;  those  purchases are assumed to
have been made at the average  price of the common stock  during the  respective
period.




                                                                         Three Months Ended      Nine Months
                                                                            September 30,     Ended September 30,
                                                                         -------------------  -------------------
                                                                          2007       2006       2007       2006
                                                                         --------  --------   --------   --------
Basic Earnings Per Share:
Earnings:
                                                                                            
Net income....................................................           $ 11,573  $ 13,406   $ 39,480   $ 38,567
                                                                         --------  --------   --------   --------
Shares (in thousands):
Weighted average shares outstanding...........................             13,068    14,360     13,293     14,867
                                                                         --------  --------   --------   --------
Diluted Earnings Per Share:
Earnings:
Net income....................................................           $ 11,573  $ 13,406   $ 39,480   $ 38,567
                                                                         --------  --------   --------   --------
Shares (in thousands):
----------------------
Weighted average shares outstanding...........................             13,068    14,360     13,293     14,867
Assumed exercise of options...................................                 26        67         54        101
                                                                         --------  --------   --------   --------
Weighted average number of shares, as adjusted................             13,094    14,427     13,347     14,968
                                                                         --------  --------   --------   --------
Shares issued pursuant to option exercises....................                  -         3        122        113
                                                                         --------  --------   --------   --------



     Options  to  purchase   shares  of  common  stock  are  excluded  from  the
calculation  of diluted  earnings per share when their  inclusion  would have an
anti-dilutive effect on the calculation.  No options were excluded for the three
month and nine month periods ended September 30, 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.

     See Note 2 above for certain  information about  contingencies  relating to
Canadian tax matters.

     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 September 30,
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 them to purchase 1.4 million
shares of treasury stock at an average price of $42.95 per share.

     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
originally  equal to Wells Fargo base rate plus 150 basis points or at the LIBOR
plus 250 basis points. On September 10, 2007 we entered into an amendment to the
Senior Loan which  reduced the margin on LIBOR rate loans from 250 basis  points
to 150 basis points and fixed all LIBOR rate loans on 30 day  interest  periods;
reduced  the  margin on base rate  loans  from 150  basis  points to zero  basis
points;  and  increased the amounts of cash flow that we may use in each quarter
to pay dividends or  repurchase  shares of common stock by  accumulating  unused
amounts  available for such purposes for up to a 24 month period that will phase
in from June 30, 2007 to June 30, 2008. No other material  amendments  were made
to the Senior Loan.  The interest rate at September  30, 2007 was 7.00%.  We are
also obligated to make additional quarterly payments equal to 50% of our "excess
cash flow" (as defined in the Senior Loan  agreement)  if our Leverage  Ratio is
greater than or equal to 1 to 1 at the end of a quarter.  Our Leverage Ratio was
0.83 to 1 at September  30, 2007.  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 September 30, 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.

     Our $20 million  real  estate loan was fully  funded in 2002 to finance our
new  headquarters  building in Ada,  Oklahoma and has a final maturity of August
2011.  This loan,  with  interest  originally  at the 30 day LIBOR rate plus 225
basis points was modified on September  25, 2007 to reduce the interest  rate to
LIBOR plus 150 basis points effective September 1, 2007,  adjusted monthly,  and
is secured by a mortgage on our headquarters. The interest rate at September 30,
2007 was 7.57% with monthly  principal  payments of $191,000  plus interest with
the  balance of  approximately  $2.3  million due at  maturity.  The real estate
loan's financial covenants conform to those of the Senior Loan.

     On September  28, 2007,  we entered into a term loan  agreement  with Wells
Fargo  Equipment  Finance,  Inc. to refinance our existing  indebtedness of $9.6
million  related to our aircraft.  The new loan has an interest rate of 89 basis
points  above the monthly  LIBOR rate  (compared  to LIBOR plus 175 basis points
under the previous loan) and will be repaid over 10 years in monthly payments of
principal of $80,000 (compared to $96,000 under the previous loan) plus interest
and is secured by the aircraft and engines.  The interest  rate at September 30,
2007 was 6.65%.

     A schedule of outstanding balances as of September 30, 2007 is as follows:

              Senior loan................................   $ 57,500
              Real estate loan...........................     11,238
              Aircraft loan..............................      9,556
                                                            ---------
              Total notes payable........................     78,294
              Less: Current portion of notes payable.....    (18,241)
                                                            ---------
              Long term portion..........................   $ 60,053
                                                            ----------





         A schedule of future maturities as of September 30, 2007 is as follows:

                    Repayment Schedule commencing
                        October 2007:
                    ------------------------------------------------------
                    Year 1.....................................   $ 18,241
                    Year 2.....................................     18,241
                    Year 3.....................................     18,241
                    Year 4.....................................     17,837
                    Year 5.....................................        956
                    Thereafter.................................      4,778
                                                                  --------
                    Total notes payable........................   $ 78,294
                                                                  --------



Note 7 - Share-based Compensation
     During the nine months ended  September 30, 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.....................................         24.17      (208,943)
Outstanding, September 30, 2007.................      ----------   ------------
                                                      $  20.08        58,500         2.67        $   2,070
                                                      ----------   -----------   ------------   -----------
Options exercisable as of September 30, 2007....      $  20.08        58,500         2.67        $   2,070
                                                      ----------   -----------   ------------   -----------


     Other  information  pertaining  to option  activity  during the nine months
ended September 30, 2007 and 2006 was as follows:




                                                                        September 30,         September 30,
                                                                            2007                  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.................          $  6,821             $  3,638



     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 in Part 1, Item 1 - 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
has 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 third  quarter of 2007  compared to the third quarter of 2006 and the second
quarter of 2007  (Table  amounts in 000's).  The sum of the  percentages  in the
tables may not total due to rounding.






 Three Months Ended September 30, 2007    Three                  %          %       Three               Three
              compared to                 Months               Change    Change     Months              Months
 Three Months Ended September 30, 2006    Ended      % of       from      from      Ended     % of       Ended      %of
            and compared to             Sept. 30,    Total     Prior   Sequential Sept. 30,   Total     June 30,    Total
   Three Months Ended June 30, 2007        2007    Revenue     Year     Period      2006     Revenue      2007     Revenue
--------------------------------------  ---------  ---------  -------- ---------- --------- --------- ---------- ----------
Revenues:
                                                                                             
  Membership fees....................    $107,713     93.8       4.0        0.7    $103,592     93.2   $106,936      93.8
  Associate services.................      6,032       5.3      -5.3        1.1      6,368       5.7      5,968       5.2
  Other..............................      1,132       1.0      -8.3       -2.1      1,234       1.1      1,156       1.0
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------
                                         114,877     100.0       3.3        0.7    111,194     100.0    114,060     100.0
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------
Costs and expenses:
  Membership benefits................     37,475      32.6       2.5        1.5     36,578      32.9     36,927      32.4
  Commissions........................     33,646      29.3       7.2       -1.7     31,393      28.2     34,243      30.0
  Associate    services    and   direct    8,902                24.6       33.2      7,144       6.4      6,682       5.9
    marketing........................                  7.7
  General and administrative.........     13,717      11.9      12.2        2.5     12,229      11.0     13,383      11.7
  Other, net.........................      3,584       3.1      22.2        8.8      2,932       2.6      3,293       2.9
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------
                                          97,324      84.7       7.8        3.0     90,276      81.2     94,528      82.9
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------

Income before income taxes...........     17,553      15.3     -16.1      -10.1     20,918      18.8     19,532      17.1
Provision for income taxes...........      5,980       5.2     -20.4       -5.9      7,512       6.8      6,353       5.6
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------
Net income...........................    $11,573      10.1     -13.7      -12.2    $13,406      12.1    $13,179      11.6
                                        ---------  ---------  -------- ---------- --------- --------- ---------- ----------





                                                                                           Three Months Ended
New Memberships:                                                                 9/30/2007     6/30/2007     9/30/2006
----------------                                                                 ----------    ----------    ----------
                                                                                                       
New legal service membership sales..........................................        145,530       138,083       148,311
New "stand-alone" IDT membership sales......................................          8,771         8,082         7,047
                                                                                 ----------    ----------    ----------
         Total new membership sales.........................................        154,301       146,165       155,358
                                                                                 ----------    ----------    ----------
New "add-on" IDT membership sales...........................................        100,888        92,382       102,341
Average Annual Membership fee...............................................        $325.98       $326.04       $334.70
Active Memberships:
Active legal service memberships at end of period...........................      1,496,319     1,484,414     1,484,456
Active "stand-alone" IDT memberships at end of period (see note below)......         78,237        75,156        60,816
                                                                                 ----------    ----------    ----------
         Total active memberships at end of period..........................      1,574,556     1,559,570     1,545,272
                                                                                 ----------    ----------    ----------
Active "add-on" IDT memberships at end of period (see note below)...........        616,919       587,550       529,983
New Sales Associates:
New sales associates recruited..............................................         43,555        38,175        42,395
Average enrollment fee paid by new sales associates.........................         $40.74        $44.65        $49.74
Average Membership fee in force:
Average Annual Membership fee...............................................        $297.52       $295.98       $292.60

Note - reflects 5,506 net transfers from "add-on" status to "stand-alone" status during the quarter



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

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


Results of Operations - Third Quarter of 2007 compared to Third Quarter of 2006
-------------------------------------------------------------------------------
     Net income  decreased  14% for the third  quarter of 2007 to $11.6  million
from $13.4  million for the prior year's third  quarter  primarily due to higher
commission payments and higher associate services and direct marketing expenses.
Diluted  earnings per share decreased 5% to 88 cents per share from 93 cents per
share  for the  prior  year's  comparable  quarter,  lower  than the net  income
decrease,  due to an approximate  9% decrease in the weighted  average number of
diluted shares outstanding.

     Membership  fees  totaled  $107.7  million  during the 2007  third  quarter
compared to $103.6  million for 2006,  an  increase of 4%.  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 1% during the three
months ended  September 30, 2007 to 154,301 from 155,358  during the  comparable
period of 2006. At September 30, 2007, there were 1,574,556  active  Memberships
in force  compared  to  1,545,272  at  September  30,  2006,  an increase of 2%.
Additionally,  the average annual fee per Membership has increased from $293 for
all  Memberships  in force at September 30, 2006 to $298 for all  Memberships in
force at  September  30,  2007,  primarily  as a result  of a larger  number  of
Identity Theft Shield memberships.

     Associate  services  revenue  decreased  by  approximately  $336,000  to $6
million,  primarily  due to decreases in  associate  enrollment  fees during the
third quarter of 2007 when compared to the 2006 quarter. New associates enrolled
were  43,555  during the 2007  period  compared to 42,395 for the same period of
2006, and average  enrollment fees paid by new sales  associates  decreased from
$50 during  the 2006  period to $41  during  the 2007  quarter  due to the lower
average  enrollment fee paid by new sales  associates in the 2007 third quarter.
We don't expect any significant  increases in the average enrollment fee for the
remainder of the year.  The eService fees  increased to $3.2 million  during the
third  quarter of 2007  compared to $3.1  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 charged 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  8% from $1.2  million for the 2006 period to $1.1
million for the 2007 period.

     Total  revenues  increased 3% to $114.9  million for the three months ended
September 30, 2007 from $111.2 million during the comparable  period of 2006 due
to the $4.1 million increase in Membership fees partially offset by the $336,000
decline in associate services revenue.

     Membership  benefits  totaled  $37.5  million  for the three  months  ended
September 30, 2007 compared to $36.6 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
relatively  stable or slightly reduced going forward as substantially all active
Memberships  provide for a capitated cost and we have reduced the capitated cost
of the Identity Theft plan benefits effective April 1, 2007.

     Commissions  to  associates  increased  7% to $33.6  million  for the three
months ended  September 30, 2007  compared to $31.4  million for the  comparable
period of 2006, and  represented 31% and 30%,  respectively,  of Membership fees
for the two 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  $218  per
membership  for the three months ended  September  30, 2007 compared to $202 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 increased to $8.9 million
for the  three  months  ended  September  30,  2007 from  $7.1  million  for the
comparable  period of 2006.  The  increase  was  primarily a result of increased
costs for  incentive  trips and bonuses.  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 September
30,  2007 and 2006 were  $13.7  million  and $12.2  million,  respectively,  and
represented 13% and 12%,  respectively,  of Membership fees for the two periods.
The  increases in general and  administrative  expenses  were  primarily  due to
increased advertising costs (which are expensed when the advertisement  occurs),
bank service charges,  telecommunication expenses, utilities and real estate and
other taxes.

     Other  expenses,   net,  which  include   depreciation  and   amortization,
litigation  accruals,  interest  expense and premium  taxes  reduced by interest
income, were $3.6 million for the three months ended September 30, 2007 compared
to $2.9 million for the 2006 comparable  period.  Depreciation  expense was $2.1
million for both periods.  Interest expense decreased to $1.7 million during the
2007 period from $2.1 million during the  comparable  period of 2006 as a result
of reduced debt levels.  Premium  taxes  increased  from  $486,000 for the three
months ended  September 30, 2006 to $494,000 for the comparable  period of 2007.
Interest  income  decreased  $430,000 to  $675,000  for the three  months  ended
September 30, 2007 from $1.1 million for the comparable period of 2006, due to a
decrease in average cash and investment balances.

     We have  recorded a provision  for income taxes of $6.0  million  (34.1% of
pretax  income) and $7.5 million  (35.9% of pretax  income) for the three months
ended September 30, 2007 and 2006, respectively. The decrease in the tax rate is
primarily due to an increase in non taxable interest income and tax credits.

Results of Operations - Third Quarter of 2007 compared to Second Quarter of 2007
--------------------------------------------------------------------------------
     Third  quarter 2007  membership  fees  increased 1% to $107.7  million from
$106.9  million  for the second  quarter of 2007.  Associate  services  revenues
increased  slightly  during the 2007 third quarter by  approximately  $64,000 to
$6.0 million and associate  services and direct marketing  expenses increased by
$2.2 million during the same period.  Membership  benefits totaled $37.5 million
in the third  quarter of 2007  compared  to $36.9  million  for the 2007  second
quarter and represented 35% of membership fees for both periods.  Commissions to
associates  totaled $33.6  million in the 2007 third  quarter  compared to $34.2
million for the 2007 second quarter and represented  31% and 32%,  respectively,
of  membership  fees for the two periods.  General and  administrative  expenses
increased  slightly  during the 2007 third quarter to $13.7 million  compared to
$13.4 million for the 2007 second quarter and represented 13% of membership fees
for both periods.


Results of Operations - First Nine Months of 2007 compared to First Nine Months
--------------------------------------------------------------------------------
of 2006
-------
     Membership  revenues increased 3% the first nine months of 2007 to a record
$318.5 million compared to $308.4 million for the first nine months of 2006. Net
income  increased  2% for the first nine  months of 2007 to $39.5  million  from
$38.6  million  for the prior  year's  comparable  period  primarily  due to the
increase of $10 million in membership  fees  partially  offset by a reduction of
associate  service  fees of $1.1  million,  an increase in  Membership  benefits
expense of $2.5 million, general and administrative expenses of $2.1 million, an
increase in commissions  of $2.4 million and an increase in interest  expense of
$1.6 million.  Diluted  earnings per share increased 15% to $2.96 per share from
$2.58 per share for the prior year's  comparable nine month period due to the 2%
increase in net income and an approximate  11% decrease in the weighted  average
number of diluted shares outstanding.

     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. 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 nine months ended
September 30, 2007 to 461,996 from 473,088 during the comparable period of 2006.
At September 30, 2007, there were 1,574,556 active Memberships in force compared
to 1,545,272 at September 30, 2006, an increase of 2%. Additionally, the average
annual fee per Membership  has increased from $293 for all  Memberships in force
at September  30, 2006 to $298 for all  Memberships  in force at  September  30,
2007,  primarily  as a result  of a  larger  number  of  Identity  Theft  Shield
memberships.

     Associate  services  revenue  decreased 5% from $20.2 million for the first
nine  months  of 2006 to $19.1  million  during  the  comparable  period of 2007
primarily due to a decrease in associate  enrollment  fees and  eServices  fees.
Total new associates  enrolled during the first nine months of 2007 were 112,773
compared to 137,688 for the same period of 2006 and average enrollment fees paid
by new sales associates  increased from $50 during the 2006 period to $59 during
the 2007 nine month period.  As noted above the average  enrollment  fee for the
third quarter of 2007 was $41. We don't expect any significant  increases in the
average  enrollment  fee  for the  remainder  of the  year.  The  eService  fees
decreased to $9.2 million  during the first nine months of 2007 compared to $9.6
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 charged and the number who choose to participate in the
Company's  eService  program,  but the Company  expects that such  revenues will
continue to be offset by the direct and indirect cost to the Company of training
(including training bonuses paid), providing associate services and other direct
marketing expenses

     Other  revenue  decreased  $331,000  from $3.8  million  for the nine month
period ending September 2006 to $3.4 million for the same period of 2007.

     Primarily as a result of the increase in Membership  fees,  total  revenues
increased to $341.0  million for the nine months ended  September  30, 2007 from
$332.3 million during the comparable period of 2006 an increase of 3%.

     Membership  benefits  totaled  $111.2  million  for the nine  months  ended
September 30, 2007 compared to $108.7 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
relatively  stable or slightly reduced going forward as substantially all active
Memberships  provide for a capitated cost and we have reduced the capitated cost
of the Identity Theft plan benefits effective April 1, 2007.

     Commissions to associates increased 2% to $98.4 million for the nine months
ended September 30, 2007 compared to $96.0 million for the comparable  period of
2006, and represented  31% of Membership  fees for both periods.  Commissions to
associates are primarily  dependent on the number of new memberships sold during
a  period.  Commissions  to  associates  per new  membership  sold were $213 per
membership for the nine months ended September 30, 2007 compared to $203 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 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 its associates as it has from time to time,
the commission cost per new Membership will increase accordingly.

     Associate services and direct marketing expenses remained constant at $22.0
million for both periods and include the costs of providing  associate  services
and marketing expenses,  including our incentive programs. 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 the entire calendar year and maintaining  certain  personal  retention rates
for the Memberships sold during the calendar year.

     General and administrative  expenses during the nine months ended September
30,  2007 and 2006 were  $39.8  million  and $37.7  million,  respectively,  and
represented 13% and 12%, respectively,  of Membership fees for such periods. The
increases in general and administrative expenses were primarily due to increased
legal fees,  advertising (which are expensed when the advertisement  occurs) and
promotion costs, printing expenses and property and other taxes partially offset
by decreased postage and shipping costs.

     Other  expenses,   net,  which  include   depreciation  and   amortization,
litigation  accruals,  interest  expense and premium  taxes  reduced by interest
income,  was $10.6 million for the nine months ended September 30, 2007 compared
to $8.6 million for the 2006 comparable period.  Depreciation  increased to $6.4
million for the first nine months of 2007 from $6.1  million for the  comparable
period of 2006.  Interest  expense  increased  to $5.3  million  during the 2007
period from $3.7 million  during the  comparable  period of 2006  primarily as a
result of higher indebtedness. Premium taxes increased from $1.4 million for the
nine months ended  September 30, 2006 to $1.5 million for the comparable  period
of 2007.  Interest income increased $626,000 to $2.6 million for the nine months
ended  September 30, 2007 from $1.9 million for the  comparable  period of 2006,
primarily due to increased cash and investment balances.

     We have recorded a provision  for income taxes of $19.5  million  (33.1% of
pretax  income)  for the first nine  months of 2007  compared  to $20.8  million
(35.0% of pretax  income) for the same period of 2006.  The  decrease in the tax
rate is  primarily  due to an increase in non  taxable  interest  income and tax
credits.


Liquidity and Capital Resources
     General
     Net cash flow  provided by operating  activities  was $47.4 million for the
nine months  ended  September  30, 2007  compared to $38.6  million for the same
period in 2006.  This $8.8 million  increase was  primarily  the result of a $10
million  increase  in cash  receipts  from  our  members,  partially  offset  by
increases in cash paid to our  providers  for the  delivery of benefits,  to our
associates  for  commissions  and to our employees  and vendors for  operational
expenses.  The increase of $8.8 million resulted  primarily from the increase in
net income of $913,000, the $1.0 million change in the increase in other assets,
the change in the decrease of income taxes  payable of $1.7 million and the $5.6
million  change in the  increase in accounts  payable and accrued  expenses  and
other  offset by a $1.2 million  change in the  provision  for  deferred  income
taxes.

     Consolidated  net cash provided by investing  activities  was $26.5 million
for the first nine months of 2007 compared to net cash used of $43.4 million for
the comparable period of 2006. This $69.9 million change in investing activities
resulted from a $4.5 million decrease in additions to property and equipment and
a $164.9 million  increase in the maturities and sales of investments  partially
offset by a $99.6 million increase in investment purchases.

     Net cash used in financing  activities during the first nine months of 2007
was  $56.9  million  compared  to net  cash  provided  of $5.2  million  for the
comparable period of 2006. This $62.1 million change was primarily  comprised of
the $75.4 million decrease in debt proceeds partially offset by the $4.6 million
decrease in common stock  dividends  paid,  the $3.7  million  decreases in debt
repayments and the $5.3 million decrease in purchases of treasury stock.

     We purchased and formally retired 872,077 shares of our common stock during
the first nine months of 2007 for $43.6  million,  or an average price of $49.95
per share,  reducing  our common  stock by $8,721 and our  retained  earnings by
$43.6 million.  We had positive working capital of $6.5 million at September 30,
2007, a decrease of $11.3 million  compared to working  capital of $17.9 million
at December  31,  2006.  The  decrease  was  primarily  due to a decrease in the
current portion of available-for-sale  investments of $29.0 million, an increase
of $1.4  million in  deferred  revenue and fees and a $1.4  million  increase in
accounts  payable  and  accrued  expenses  partially  offset by a $17.0  million
increase in cash and cash  equivalents  part. The $6.5 million  positive working
capital at September 30, 2007 would have been a $17.7 million  positive  working
capital  excluding the current portion of deferred revenue and fees in excess of
the current  portion of  deferred  member and  associate  service  costs.  These
amounts will be  eliminated  by the passage of time without the  utilization  of
other current assets or us incurring other current liabilities. We do not expect
any difficulty in meeting our financial obligations in the next 12 months.

     At  September  30,  2007  we  reported  $68.8  million  in  cash  and  cash
equivalents and unpledged  investments compared to $81.8 million at December 31,
2006. The balance of cash and cash  equivalents will vary depending on our level
of investment in auction rate certificates and other short term investments that
are  carried in the  current  portion of  available-for-sales  investments.  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,   auction  rate
certificates and state and municipal tax-exempt bonds.

     We generally  advance  significant  commissions at the time a Membership is
sold. During the nine months ended September 30, 2007, we advanced  commissions,
net of chargebacks,  of $96.0 million on new Membership  sales compared to $94.4
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 September  30, 2007,  and related  activity for the nine month
period then ended, were:



                                                                                   (Amounts in 000's)
                                                                                   ------------------
                                                                               
Beginning unearned advance commission payments (1)...............................    $  188,647
Advance commission payments, net.................................................        96,047
Earned commissions applied.......................................................       (94,755)
Advance commission payment write-offs............................................        (2,723)
                                                                                     -----------
Ending unearned advance commission payments before
  estimated unrecoverable payments (1)...........................................       187,216
Estimated unrecoverable advance commission payments (1)..........................       (42,540)
                                                                                     -----------
Ending unearned advance commission payments, net (1).............................    $  144,676
                                                                                     -----------


     (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 $54.5 million.
As such, at September 30, 2007 future  commission  payments and related  expense
should be reduced as unearned advance  commission  payments of $90.2 million are
recovered.  Commissions  are earned by the associate as Membership  premiums are
earned by us, usually on a monthly basis. For additional  information concerning
these commission advances,  see our Annual report on Form 10-K under the heading
Commissions  to Associates in Item 7 -  Management's  Discussion and Analysis of
Financial Condition and Results of Operations.

     We believe that we have significant ability to finance any future growth in
Membership  sales based on our recurring  cash flow and existing  amount of cash
and cash  equivalents  and unpledged  investments at September 30, 2007 of $68.8
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 September 30, 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
     Other than the changes to our debt agreements described above (See Note 6 -
Notes  Payable in Item 1),  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 nine 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 when we
can  acquire  shares at prices we believe  are  attractive  as we have  existing
authorization from the Board to purchase an additional 754,518 shares.  Based on
recent  increases  in our  common  stock  market  price,  we may reduce or defer
further stock repurchases.

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 September  30, 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
-------------------------------------------------------------------

     Interest Rate 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 September 30, 2007,  substantially all of 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,  auction rate  certificates  and state and  municipal
tax-exempt  bonds. We do not hold any investments  classified as trading account
assets or derivative financial instruments.

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

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




                                                                          Hypothetical change     Estimated fair value
                                                            (In 000's)      in interest rate       after hypothetical
                                                            Fair value    (bp = basis points)   change in interest rate
                                                            ----------   --------------------   -----------------------
                                                                                    
Fixed-maturity investments at September 30, 2007 (1)...      $  28,251     100 bp increase            $  23,861
                                                                           200 bp increase               26,231
                                                                            50 bp decrease               28,779
                                                                           100 bp decrease               29,306

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  $15.8  million
     (Certificates  of deposit,  auction rate  securities  and EURO deposits) at
     September 30, 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 September 30, 2007 would reduce
     the estimated fair value of our fixed-maturity investments by approximately
     $2.0 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.

     As of September 30, 2007, we had $78.3 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  $783,000.  As of September 30, 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.  As reflected in the attached  Consolidated  Statements of Comprehensive
Income,  we have recorded positive foreign currency  translation  adjustments of
$1.1 million for the nine months ended  September 30, 2007 and have a cumulative
positive  foreign  currency  translation  adjustment  balance of $1.5 million at
September  30,  2007.  These  amounts  are  subject  to  change  dynamically  in
conjunction with the relative values of the Canadian and U.S. dollars.


ITEM 4.    CONTROLS AND PROCEDURES
----------------------------------

     Under  the  supervision  and  with  the  participation  of our  management,
including  our Chief  Executive  Officer and Chief  Financial  Officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  (as defined in Rule  13a-15(e)  under the  Securities
Exchange Act of 1934). Based on that evaluation, our Chief Executive Officer and
Chief  Financial  Officer have  concluded  that, as of September  30, 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  September  30,  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 third quarter of 2007.




                                                             Total Number of       Maximum Number of
                                                           Shares Purchased as    Shares that May Yet
                         Total Number                        Part of Publicly     Be Purchased Under
                           of Shares      Average Price     Announced Plans or       the Plans or
        Period             Purchased      Paid per Share         Programs            Programs (1)
----------------------  --------------   ----------------  --------------------   --------------------
                                                                           
July 2007.............        65,202         $  59.46               65,202             1,046,755
August 2007...........       199,758            47.93              199,758               846,997
September 2007........        92,479            54.84               92,479               754,518
Total.................  ---------------  ----------------  --------------------
                             357,439         $  51.82              357,439
                        ---------------  ----------------  --------------------


-----------

(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          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)

 10.14          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)

 10.15          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)

 10.16          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)

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

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

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

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

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

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

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




                                  Exhibit 31.1

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

I, Harland C. Stonecipher, certify that:

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

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

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

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

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

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

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

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

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

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

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


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



                                  Exhibit 31.2

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

I, Steve Williamson, certify that:

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

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

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

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

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

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

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

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

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

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

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


Date: October 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  September  30,  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: October 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  September  30,  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: October 23, 2007       /s/ Steve Williamson
                             ---------------------------------------------------
                             Steve Williamson
                             Chief Financial Officer