In this LegalZoom review, we will cover their LLC formation services and compare them to the top companies in the market.
LegalZoom is an online legal and documentation service that professes to offer assistance with some legal matters. However, are they actually a good service, and are they worth your time? In this LegalZoom review, we’ll take a closer look at who they are, what services they offer, and what you should know about them.
What is LegalZoom?
LegalZoom is an online document company that focuses on legal documents for individuals and businesses, such as forming businesses, creating wills or trusts, and managing intellectual property. They have documents available for each state in the US and charge flat rates for their services.
LegalZoom also provides access to a network of affiliated lawyers. However, this is where the distinctions in their business become essential.
LegalZoom is not a law firm. They are also not an attorney referral service, and they do not provide legal advice. Any information you share with them is not protected by attorney-client privilege, and you should act accordingly. All of the attorneys they link to are independent and operate separately from LegalZoom’s services.
Now, this does not mean that LegalZoom offers poor service or that they’re anything other than what they claim to be. They’re both up-front and extremely clear about the fact that they are not, themselves, attorneys. However, it’s essential to know who you’re hiring for help and what sort of help they can provide.
LegalZoom’s basic services are appropriate if you’re handling legal matters yourself. While you may need an attorney to file certain documents for you or check for accuracy, the truth is that you can make and submit many legal documents yourself. This is what LegalZoom specializes in.
If you need an attorney, they can help you find one, but the choice of who to hire is entirely up to you, and LegalZoom maintains a careful distance here.
To put it another way, LegalZoom mainly sells mostly-prewritten documents designed to conform to local laws. Accuracy is important here because any issues with documents can stop them from being legally binding.
Aside from these things, LegalZoom is often considered a disruptive innovator in the marketplace. This is not an inherently negative term. Rather, it means that LegalZoom has essentially identified and created a new market, and that can shut out some companies that provided legal document services in other ways.
Their main goal is cited as lowering the prices required for accessing relatively simple and basic services, such as legal documents that are largely copy-and-paste, and thereby improving access for people without the money to hire a lawyer.
Check out our top-rated LLC services.
Personal services represent one of LegalZoom’s main categories. They divide these documents into four primary sections, with specific products for each. Note that they do not sell documents outside of these areas, although they may be willing to create new products on request.
LegalZoom’s estate planning documents include last wills and testaments, documents for living trusts, and advance healthcare directives (or living wills) for areas that recognize these. Note that even places that don’t legally recognize living wills may allow people to use them as guidance.
The financial services sector includes documents for financial power of attorney.
The marriage category includes products for divorces and name changes. Note that they do not sell documents for getting married, although many people who marry end up changing at least one person’s name.
Finally, they sell some real estate products, mostly covering residential leases for landlords and property deeds. Comparing LegalZoom vs Rocket Lawyer?
In many ways, LegalZoom’s business services department is its larger and most-important category. This is also the area most likely to result in hiring an attorney for additional help.
LegalZoom offers too many documents to discuss in detail here, but their products mainly focus on business formation, business operations, and intellectual property. These areas include documents ranging from 501(c)(3) nonprofit applications to promissory notes, corporate amendments, and certificates of good standing.
Learn more about Limited Liability companies.
LegalZoom is not a law firm and specifically states that it is not a referral service for lawyers. However, it does have a partner program that can help people connect with attorneys.
Unlike some other services, LegalZoom has relatively strict criteria for its program. Entry requirements include at least five years of practicing law, a spotless bar record, and familiarity with explaining complex legal issues.
Functionally, this means that they do not accept amateur lawyers for their program. They may even go to the extent of researching applicants online to check for any issues outside of work. All of this is done in the name of providing consistently high-quality services, and for the most part, this works out for them.
The attorney network also helps cover one of the biggest flaws in LegalZoom’s setup: The inability to offer document services beyond those on their website. While they can and do add new products occasionally, LegalZoom usually needs to be sure each document is valid in every area before they can start selling it.
Qualified attorneys, however, can create practically any legal document you might need. This may require finding the right lawyer to do it, but LegalZoom provides a discount on rates for most of their partnered attorneys and can ultimately help you save money on their services.
This link is a crucial aspect of their business. Without the ability to produce any legal document on-demand, LegalZoom would be an interesting website for basic needs but ultimately no more than that. Their attorney network’s flexibility, although arguably not part of their business, is what brings them to a better position. Check out LegalZoom vs Legal Shield here.
LegalZoom uses a flat fee model for most services. These fees exclude any regulatory costs, such as state filing fees, so pricing will vary slightly depending on where you live. They also offer rush service for many of their products, which is a noticeable increase over the base price.
One thing to note here is that their rush service is not the same thing as getting something completed quickly. While they do expedite such things ahead of general purchases, it’s often up to states, counties, or courthouses to process documents. That can take anywhere from minutes to weeks, and LegalZoom cannot help with that.
The point to understand here is that rushing services will only get you so far. It’s not necessary for every document, and the difference between rushed and not is usually only a few days. You can usually avoid the need for rushing documents by filing them early.
Pros of LegalZoom
Here are the major positive aspects of LegalZoom.
No LegalZoom LLC review is complete without discussing their longevity as a business. LegalZoom has been operating since 2001, which makes it one of the oldest legal document assistant companies. Being established means they’re much more trustworthy, and it’s easier to get a good understanding of who they are and how they operate.
All existing businesses have flaws, but a business that’s been running for more than five years is more trustworthy than those running for less time. A company that’s operated for decades has enough history to examine.
Comprehensive Access for Businesses
LegalZoom has relatively comprehensive access for businesses, including a legal plan that offers consistent and regular access to an independent attorney. This is helpful and valuable for companies that need occasional legal help but doesn’t need to hire a lawyer full-time.
LegalZoom’s business plans are also good for small businesses. For example, they can provide one copyright registration each month, which is beneficial for creative people who want to protect artwork, music, or other copyrightable material.
A Large Number of Business Documents
LegalZoom is a little lacking in documents for personal use, but it has many options and packages for businesses. From annual reports to updating information with the state, they have quite many standard documents that most businesses need to file. They even have a separate tax service for help with that.
This company is always at its best when you need to buy specific document services one at a time. As long as you plan ahead, you can ensure you get all business documents filed and processed by your deadlines.
LegalZoom offers a 60-day money-back guarantee for most of its services. This does not apply to attorneys, with who you form an independent relationship. Still, it does provide generally solid coverage in case there’s a problem with your documents or the submission process. Actual problems are relatively rare, but this is a nice feature to have.
Cons of LegalZoom
Here are the major negatives of LegalZoom’s structure and offerings.
More Expensive for Some Services
LegalZoom is somewhat more expensive than many of its competitors, such as ZenBusiness, although it also offers some services its customers don’t. This is especially true for the personal document business, which is something other filing services often avoid paying attention to.
The difference in pricing between services is noticeable but not meaningful. That is, for a comfortably profitable business, the difference in paying $150 or $200 for help with something isn’t that big of a deal. Instead, it’s usually better to pick a company based on non-price factors, such as their customer service or overall trustworthiness.
Few Personal Documents
LegalZoom is mainly business-oriented, so it’s hard to punish them too heavily for this. In fact, you could even say that this is a positive because they have personal documents and many of their competitors don’t. Some help is fundamentally better than no help.
Helpful additional documents would include things like child care authorization agreements, parenting plans, prenuptial agreements, visitation letters, and demands for child support payments. These are documents that many families may need.
The primary problem with having few personal documents is that the service isn’t valuable unless you provide most of what people need. Offering a few documents helps a bit, but offering many more standard documents would greatly expand the scope of their services.
Limited Customer Service
LegalZoom offers regular access to customer support for its clients. However, while customer support is available, people often report that it’s limited and not always capable of helping resolve problems.
Problems with customer service are always bad, but the impact depends on what you’re trying to do. If you’re only trying to file a minor document and it’s not time-sensitive, you can afford to wait. If you need to form a business immediately to take advantage of a time-sensitive opportunity, delays are a much bigger problem.
If something is truly urgent and sensitive, you may be better off hiring an attorney directly, either on your own or by going through LegalZoom’s connection service. This is more expensive, but most lawyers can process almost any document within a day or two as long as you have the right information available.
Not a Great Option for Many Documents
Finally, LegalZoom can be awkward if you need many different documents. They’re comparatively higher-priced than many competitors to start with, so if you need two or three dozen documents, their higher pricing can add up fast.
If you need too many documents, it might be more affordable to hire an attorney directly. Many attorneys can process several documents in a relatively low amount of time. If hiring an attorney is the cheap option, though, you know something is pretty expensive.
Public Opinion about LegalZoom
One review is helpful for understanding a company, but looking at multiple reviews can help cut through any lingering bias and provide a more comprehensive look at any company. This LegalZoom review wouldn’t be complete otherwise.
Consumer Affairs rates LegalZoom 4.6/5, with 714 ratings from the community. That’s enough reviews to indicate that most real consumers are quite happy with the service they’re receiving at the price they get.
Positive comments on Consumer Affairs often cite ease of use, reliability, and appreciation for LegalZoom’s clear explanations of how to fill out forms correctly.
Negative reviews on Consumer Affairs make up only a small portion, but these are also informative. One reviewer cited problems with correcting forms and fees, while multiple people reported long waits for customer service on matters they felt were urgent.
Consumer Affairs allows business responses, and LegalZoom replies to a large portion of the reviews posted there. While not a reason to choose them over a competitor, such consistency indicates that they do pay attention to reviews. That’s always a good sign for a business.
The Better Business Bureau also rates the company, putting them at 4.42/5 after 3773 customer reviews. Like Consumer Affairs, this is enough reviews to filter away any outlying opinions. In other words, it’s a highly trustworthy score.
As of our own review, the BBB rates them with an A on their scale, which is the second-highest rating on their 100-point scale.
Positive reviews from customers on the BBB cite the helpfulness and clarity of customer service agents, which suggests that support has flaws but still works well for most people. You can compare LegalZoom vs Inc Authority here.
Forbes puts them slightly higher, at 4.5/5. The writers for this review like the online platform and the comparatively low cost of ongoing legal help, but they consider the registered agent service too expensive and noted many upsells within an already-expensive platform. Should I be my own Registered Agent?
Notes on high prices are a relatively common theme, although this hasn’t stopped customers from relying on LegalZoom’s services.
Best Company has a much lower score, with their Legal Zoom review putting the company at 2.8/5 after 62 user reviews. Having such a difference in score with a high number of user reviews is unusual, but also makes it worth investigating to see what the difference is.
Reviewers here mostly cite the pricing and upselling tactics as negatives. Some people reported documents being filed extremely late, leading to fines for them, and a few even mentioned LegalZoom putting themselves as agents without request and then charging the company when the “free trial” expires. That kind of aggressive upselling is quite concerning overall.
Sitejabber puts them somewhat higher, with a score of 3.6/5 after 1025 user reviews. The primary complaints noted here are mostly about the speed of service and payment issues, with some people reporting that it was easy to sign up, but canceling practically anything took many hours and multiple phone calls. You can compare LegalZoom vs Northwest Registered Agent here.
The long wait times come up often enough in reviews that we have to trust they occur regularly. They also reinforce the point that LegalZoom may not be the best choice if you need to file something as quickly as possible. Even the expedited services can be slow, and those are significantly more expensive.
Many people across different review sites indicated that eventually they just gave up and started filing documents themselves, which they found to be faster and easier.
As an additional consideration, most reviews do not specifically discuss the lawyers that LegalZoom can link to. Most of the problems, including pricing issues and delays, are not present when working directly with an attorney. Check out our LegalZoom vs IncFile, LegalZoom vs ZenBusiness or LegalZoom vs Nolo review here.
LegalZoom offers many document services for businesses, with a comprehensive selection of options. While generally effective when things work, regular delays in processing paperwork and multiple hidden fees make them slower and less affordable than some of their competitors.
Overall sentiment towards the company is still positive, and we rate than 4/5 for this LegalZoom review. If you would prefer to start a business on your own check out our guide on how to start your own LLC.