UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 8-K

                             CURRENT REPORT PURSUANT
                          TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported):  January 1, 2005
                                               ---------------------------------


                          Pre-Paid Legal Services, Inc.
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             (Exact Name of Registrant as Specified in Its Charter)


                                    Oklahoma
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                 (State or Other Jurisdiction of Incorporation)

                   1-9293                       73-1016728
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           (Commission File Number) (IRS Employer Identification No.)


                   One Pre-Paid Way
                        Ada, OK                                74820
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       (Address of Principal Executive Offices)             (Zip Code)


                                 (580) 436-1234
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              (Registrant's Telephone Number, Including Area Code)


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          (Former Name or Former Address, if Changed Since Last Report)


     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|  Written  communications  pursuant to Rule 425 under the  Securities Act (17
     CFR 230.425)

|_|  Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

|_|  Pre-commencement   communications  pursuant  to  Rule  14d-2(b)  under  the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement   communications  pursuant  to  Rule  13e-4(c)  under  the
     Exchange Act (17 CFR 240.13e-4(c))







Item 1.01 Entry into a Material Definitive Agreement.

     Pre-Paid Legal  Services,  Inc. (the  "Company") will amend and restate its
existing deferred compensation plan (originally adopted in 2002) effective as of
January 1, 2005. The plan permits executive  officers and key employees to defer
receipt of a portion of their compensation. Deferred amounts accrue hypothetical
returns based upon  investment  options  selected by the  participant.  Deferred
amounts  are paid in cash  based on the value of the  investment  option and are
generally  payable  following  termination  of  employment  in a lump  sum or in
installments as elected by the  participant.  The plan also provides for a death
benefit of one year's base salary or $500,000 for each participant. Although the
plan is unfunded and  represents  an  unsecured  liability of the Company to the
participants,  the  Company  purchases  company-owned  variable  life  insurance
policies  to insure  the lives of  participants  and to  finance  the  Company's
obligations under the plan.

     The  existing  plan will be amended to comply  with the new  provisions  of
Section  409A of the  Internal  Revenue  Code as  amended by the  American  Jobs
Creation Act of 2004, which establish new rules for deferred  compensation plans
in  general.  The  amended  plan  authorizes  participation  by  additional  key
employees,  but does not  materially  change the  benefits  available  under the
existing  plan to executive  officers of the  Company.  As a part of the amended
plan,  the Company  also will  purchase new  insurance  policies on the lives of
participants and changed the third party administrator of the plan.

                                   SIGNATURES

         Pursuant to the requirements of the Securities 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.


                          By:      /s/ Randy Harp
                          ------------------------------------------------------
                          Randy Harp, Chief Operating Officer

Date:  January 4, 2005