FORM 5 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). Form 3 Holdings Reported Form 4 Transactions Reported

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person * SMITH THOMAS W 2. Issuer Name and Ticker or Trading Symbol PRE PAID LEGAL SERVICES INC [PPD] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director __X__ 10% Owner _____ Officer (give title below) __X__ Other (specify below) Member of Section 13D Group (Last) (First) (Middle) 323 RAILROAD AVENUE 3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year) 12/31/2010 (Street) GREENWICH, CT 06830 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Reporting (check applicable line) _X_ Form Filed by One Reporting Person ___ Form Filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Amount (A) or (D) Price Common Stock 12/29/2010   G 100,000 D $ 0 655,900 D   Common Stock             100,000 I (1) By Thomas W. Smith Foundation (1) Common Stock             488,434 I (2) By Idoya Partners L.P. (2) Common Stock             1,014,675 I (3) By Prescott Associates L.P. (3) Common Stock             41,306 I (4) By Prescott International Partners L.P. (4) Common Stock             65,000 I (5) By Prescott Investors Profit Sharing Trust (5)

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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SEC 2270 (9-02)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned at End of Issuer's Fiscal Year (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
SMITH THOMAS W 323 RAILROAD AVENUE GREENWICH, CT 06830	Â	  X	Â	Member of Section 13D Group

Signatures

/s/ Thomas W. Smith		02/04/2011
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	These shares are owned directly by the Thomas W. Smith Foundation ("Foundation") and indirectly by the Reporting Person as trustee of the Foundation. The Reporting Person disclaims beneficial ownership of these shares in excess of his pencuniary interest under 16a-8(b)(2)(ii). The address for the Foundation is 323 Railroad Avenue, Greenwich, CT 06830.
(2)	These shares are owned directly by Idoya Partners L.P. ("Idoya"), a private investment limited partnership, and indirectly by the Reporting Person as general partner of Idoya. The Reporting Person disclaims beneficial ownership of these shares in excess of his pencuniary interest under Rule 16a-1(a)(2)(ii)(B). The address for Idoya is 323 Railroad Avenue, Greenwich, CT 06830.
(3)	These shares are owned directly by Prescott Associates L.P. ("Prescott Associates"), a private investment limited partnership, and indirectly by the Reporting Person as general partner of Prescott Associate. The Reporting Person disclaims beneficial ownership of these shares in excess of his pencuniary interest under Rule 16a-1(a)(2)(ii)(B). The address for Prescott Associates is 323 Railroad Avenue, Greenwich, CT 06830.
(4)	These shares are owned directly by Prescott International Partners L.P. ("PIP"), a private investment limited partnership, and indirectly by the Reporting Person as general partner of PIP. The Reporting Person disclaims beneficial ownership of these shares in excess of his pencuniary interest under Rule 16a-1(a)(2)(ii)(B). The address for PIP is 323 Railroad Avenue, Greenwich, CT 06830.
(5)	These shares are owned directly by the Prescott Investors Profit Sharing Trust ("Trust") and indirectly by the Reporting Person as a trustee of the Trust. The Reporting Person disclaims beneficial ownership of these shares in excess of his pencuniary interest under 16a-8(b)(2)(ii). The address for the Trust is 323 Railroad Avenue, Greenwich, CT 06830.

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