Legal Zoom Review How Does Legal Zoom Cpare?

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Legal Zoom Review: How Does Legal Zoom Compare?

LegalZoom is a legal documentation and filing company that offers instant access to legal forms and documents.

LegalZoom works by producing all sorts of legal forms and documents. You simply have to sign your e-mail address up in LegalZooms website and this is done for free. Once you become a LegalZoom member, you can access the online questionnaires made specifically for each legal document you want to have. LegalZoom has documents ranging from a wide range of legal concerns. These include incorporation, LLCs, and DBAs; wills and living trusts; trademarks, patents, and copyrights; divorce and name change; and a variety of miscellaneous legal forms including but not limited to bankruptcy, small claims, real estate leases, and real estate transfers.

LegalZoom was founded by Brian Liu, now the companys Chairperson, and Eddie Hartman, now LegalZooms Chief Technology Officer. Both Brian Liu and Eddie Hartman have years of experience behind them in their own respective fields. Liu, a UC Berkeley graduate, is a former corporate lawyer in a Wall Street legal firm. Hartman, on the other hand, is a Computer Science graduate from Yale University and former Vice President for Technology of a NASDAQ outsourcing company.

LegalZooms legal forms and documents were especially crafted by retired judges, law school professors, and legal experts.

LegalZoom uses a lawyer-free pricing scheme. This means that you are only paying for the costs of the legal documents, plus optional expedited shipping and handling fees. This pricing scheme makes LegalZooms documents ultimately much more affordable than if you consult with a lawyer in person. For example, one standard package of incorporation documents would normally cost around $3,100.00 including lawyers fees. If you choose to get your incorporation documents from LegalZoom, you will only pay only $369.00, including all documents of incorporation, resolutions of board meetings, corporate by-laws, stock certificates, Microsoft Accounting software, medical expense plan forms, 40 essential business forms on CD-ROM, Federal Tax ID application, and a 2-day FedEx rush delivery to your doorstep.

LegalZoom offers a money-back guarantee for all documents that do not satisfy the customers demands. There are a variety of options you can receive if you are not happy with LegalZooms documents. First, the company may offer you an opportunity to exchange your legal document for another legal document of the same price. Still, if they are really unable to meet your demands, LegalZoom will refund your money back to your credit card account.

It only takes approximately a few minutes for you to fill up the online questionnaire provided by LegalZoom, which is very easy and convenient for you as a user because all questions relevant to the document you want to obtain are already presented in a fixed format before you. You only have to fill in the blanks or choose the options appropriate to your own situation. Also, LegalZoom covers all kinds of legal documents, from articles of incorporation to last wills to divorce papers, LegalZoom will create them for you, provided you give them the right information. LegalZoom also has an option for free shipping, although they also provide rush shipping services for additional fees. The company also offers 24/7 online and phone support for users who need assistance with their documents.

LegalZoom takes at least 7 to 10 business days to deliver the legal documents to your doorstep, which is a little too long considering the documents have already been pre-written and only need the clients specific information and added instructions.

Absolutely. LegalZoom is taking one step further into the legal jungle because many people definitely cannot afford the often exorbitant fees that lawyers often judge for their services. If youre planning your next legal battle in the future, LegalZoom is worth a try. After all, if youre not happy you can always get your money back.

I used LegalZoom to get Durable Power of Attorney for my brother who is 100% disabled. I did this in May 2011. I read the reviews from other people and decided to try them even though the reviews were both ways. I personally had no problems at all. They sent me an email very quickly with the processed papers, and within 3 days I received the official papers in the Postal mail. Every thing went very smoothly and I saved over $350.00 from the cost quoted me by several attorney offices for this same service. I would highly recommend LegalZoom for your legal documents etc.business0.3

LegalZoom and the Slippery Slope of Unauthorized-Practice-of-Law Analysis

Online legal-documentation vendor LegalZoom has been embroiled in a class action alleging that LegalZoom was engaged in the unauthorized practice of law by selling to Missouri consumers. A couple of weeks ago, LegalZoom and the plaintiffs agreed in principle to settle. (For more on the settlement, seethis WSJ Law Blog post.)

The settlement renders moot last months order of the District Court for the Western District of Missouri in this class action. (Goherefor a PDF copy.) The order denied, in part, LegalZooms motion for summary judgment on the grounds that LegalZooms document-preparation service did indeed constitute the unauthorized practice of law.

But since this order could be cited by any court considering a similar dispute, I thought I should take a look at it.

The courts reasoning is unpersuasive. Lets consider the courts three arguments.

First, Missouri law follows the general rule that selling forms or kits isnt unauthorized practice if theyre not accompanied by advice that is personalized in the sense of being directed to the specific problems of a designated or readily identifiable person. See Legal Ethics, Law. Deskbk. Prof. Resp. 5.53 (2011-12 ed.). Heres how the court attempted to distinguish LegalZooms service from a do-it-yourself divorce kit:

Here, LegalZooms internet portal offers consumers not a piece of self-help merchandise, but a legal document that goes well beyond the role of a notary or public stenographer. The kit in Thompson offered page upon page of detailed instructions but left it to the purchaser to select the provisions applicable to their situation. The purchaser understood that it was their responsibility to get it right. In contrast, LegalZoom says: Just answer a few simple online questions and LegalZoom takes over. You get a quality legal document filed for you by real helpful people. Thus, LegalZooms internet portal sells more than merely a good (i.e., a kit for self help) but also a service (i.e., preparing that legal document).

This analysis falls short in two respects: For one thing, LegalZoom prepares the document for the customer because LegalZoom uses an online process rather than printed materials. Attributing significance to who prepares the document in effect means that youre drawing a baseless distinction between print and electronic materials.

And the fact that LegalZooms process doesnt provide for lengthy instructions of the sort included in the print divorce kit doesnt mean that LegalZoom is somehow impinging on the customers autonomy. Document-creation materials, whether in print or online, can contain a lot of guidance, some guidance, or no guidance at allwhat is appropriate depends on the document being created. Koncisions NDA template, which is intended for sophisticated users, has lots of guidance; evidently LegalZooms process offers little. But the relative paucity of guidance in LegalZooms process doesnt change the fact that LegalZoom, as much as the divorce kit, [leaves] it to the purchaser to select the provisions applicable to their situation by providing appropriate answers to all questions posed.

For the same reason, theres no basis for the court to attribute significance to the fact that the customer does not have to follow directions to fill in a blank legal form but instead merely provides information and LegalZoom takes over.

Second, the court held that LegalZooms legal document preparation service goes beyond self-help because of the role played by its human employees, not because of the internet medium. In this, the courts argument resembles that offered by document-automation pioneer Richard Granat inthis blog post. But the tasks performed by LegalZoom employees are purely ministerial: they check each customers online questionnaire for glitches and check the formatting of the output document. Theres something deeply paradoxical about basing a holding of unauthorized practice of law on work that couldnt remotely be described as constituting the practice of law.

Third, the court decided that LegalZooms use of document assembly was consistent with the unauthorized practice of law:

Furthermore, LegalZooms branching computer program is created by a LegalZoom employee using Missouri law. It is that human input that creates the legal document. A computer sitting at a desk in California cannot prepare a legal document without a human programming it to fill in the document using legal principles derived from Missouri law that are selected for the customer based on the information provided by the customer. There is little or no difference between this and a lawyer in Missouri asking a client a series of questions and then preparing a legal document based on the answers provided and applicable Missouri law. That the Missouri lawyer may also give legal advice does not undermine the analogy because legal advice and document preparation are two different ways in which a person engages in the practice of law.

The Missouri Supreme Court cases which specifically address the issue of document preparation,First Escrow,Mid-AmericaandEisel, make it clear that this is the unauthorized practice of law. The fact that the customer communicates via computer rather than face to face or that the document prepared using a computer program rather than a pen and paper does not change the essence of the transaction.

The court is certainly correct that human programming is required to create LegalZooms content.But its also required for all print forms and kits.So this argument makes no sense.

This case shows that attempting to draw a line somewhere on the slippery slope from self-help divorce kits to full-blown document assembly is doomed to failure. That leaves two alternatives.

One alternative would be for courts to shift from a bright-line test to one that focuses on what should be the concern: protect[ing] lay people from being injured by incompetents or by those who lack the integrity to practice law compared to those who have been licensed to practice law. Legal Ethics, Law. Deskbk. Prof. Resp. 5.54 (2011-12 ed.)

In that regard, simply observing that LegalZooms personnel arent qualified to practice law in Missouri accomplishes nothing. Heres what Id ask Legalzoom: What are your quality-control processes? Are your documents prepared by lawyers, by nonlawyers, or by some combination of lawyers and nonlawyers? If lawyers are involved, what are their responsibilities, and are any of them licensed in Missouri? If LegalZoom shows that it is serious about creating a reliable product for Missouri consumers, you give them the green light.

This inquiry wouldnt involve going over LegalZooms product with a fine-tooth combinstead, it would simply have to establish basic competence. The inquiry would presumably be handled by some regulatory authority, or by the local bar.

But this sort of approach isnt feasible. For one thing, as regards print materials,Elvis has already left the building. And its unlikely that anyone would have the appetite, or resources, for the extra regulatory burden that it would represent, particularly given the recent discussion of deregulating the practice of law. (Regarding deregulation, seethis WSJ Law Blog post.)

Furthermore, theres nothing exclusively legal about a contract. Much of the work of drafting and negotiating business contracts is done by nonlawyers. (Thats something I expect to discuss in a future blog post.) That being the case, why should we make a fetish of having lawyers be the ones who prepare the materials for do-it-yourself contracts?

Given the above, it would make sense abandon the notion of regulating materials, whether in print or electronic form, that allow users to create legal documentation.

Instead, any user who has been harmed could seek a remedy. Sure, the user is responsible for choosing between alternatives offered in the materials. And sure, a given vendor wont necessarily be in a position to offer products that take into account all quirks in different jurisdictions. But if a vendor screws up and a user incurs damages as a result, why shouldnt the vendor be held liable?

A user could conceivably choose from among different possible claims: A strict-product-liability claim or a claim for negligent misrepresentation, both tort claims. Or a breach-of-warranty claim. I havent yet researched how plausible the different kinds of claims would be in this context.

Vendors could seek to protect themselves against such liability. For one thing, a vendor could specify in its terms of service that the user releases the vendor from any liability for negligence. But contract provisions releasing or limiting liability for claims that have not yet arisen are generally not favored. 8 Williston on Contracts 19:21 (4th ed.). Furthermore, prominently stating such a release could seriously undercut a vendors credibility, given whats at stake in legal documentation.

And vendors in this space go out of their way to disclaim implied warranties. Such disclaimers might be effective, but I wonder how many would have the gumption to tell users what they mean: You the consumer are depending on us entirely, but if we make a mistake and you lose money or are otherwise harmed, we dont have to pay you a penny.

A more cautious way for a vendor to protect against liability would be to specify that its products arent a substitute for review by a lawyer, or to accept as users only lawyers or people under the supervision of a lawyer. But that wouldnt help the LegalZooms of the world.

Currently Koncision is for use only by lawyers or under the supervision of a lawyer. But even if we opt to allow nonlawyers to use our confidentiality-agreement template, no one could plausibly claim that were engaged in the unauthorized practice of law. Our position would be that the confidentiality-agreement template is for use in business by sophisticated individuals and organizations, rather than consumers, and that you shouldnt be using Koncision if you cant look after yourself.

Should we acknowledge that wed be liable for our mistakes? Or should we require that each user somehow involve a lawyer? Our current terms of use seek to avoid any liability, but Ill be revisiting the issue.

This stew of considerations is relevant to Koncision 2.0, which Im currently working on. But Im thinking out loud, so dont hold Koncision to any of this.

Are there disadvantages of using LegalZoom for a startup incorpation? – Qua

Are there disadvantages of using LegalZoom for a startup incorporation?

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The actual process of incorporating a business entity is pretty straightforward in most states and usually involves a few procedural steps (and payment of fees) to complete. One thing to note, however, is that you should check theactualrequirements set forth by the Secretary of State in the relevant jurisdiction versus relying solely on the process offered by a service provider (such as LegalZoom). Some states have certain additional requirements, such as the LLC publication requirement in New York, that also need to be satisfied for valid formation. Many times, these additional requirements are not covered as part of the service provided by a third party incorporation service.

The primary advantage of using a service like LegalZoom to incorporate is clear – the process is easy and cheap. The primary disadvantage, however, is that such services cater to the masses and may not address the specific nuances of your particular situation.

Once you get past formation and into governance and operations, this is where things get even trickier. Yes, you can find a form for almost any type of legal agreement through a simple Google search, but legal forms found online should be used with caution since they often need to be adopted to address a particular situation or address specific concerns of the parties involved. Furthermore, many legal forms found online are not maintained to address developments in the law – so having a lawyer take a final look is always advisable.

My view is that, you do not need to decide between hiring a lawyer or using a service like LegalZoom. You can use a service like LegalZoom and handle a majority of the upfront work by preparing the first draft(s) yourself and then engage a lawyer to do a final review of the document(s). This can be a great way to save on drafting costs the way big firms do by having associates prepare the first draft vs a partner.

AtShouldISign, we regularly help individuals and businesses who have prepared first drafts of incorporation documents (or other business agreements) using forms provided by services like LegalZoom (or other online providers) find qualified counsel. The next time you have a legal question or need to have a document prepared or reviewed, I invite you to post a free request in seconds at(currently live in NY only) to connect with vetted and affordable attorneys for pay-per-minute phone consultations or fixed-price proposals for document preparation and review.

This answer is not a substitute for professional legal advice. This answer does not create an attorney-client relationship, nor is it a solicitation to offer legal advice. Seek the advice of a licensed attorney in the appropriate jurisdiction before taking any action that may affect your rights.

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Related QuestionsMore Answers Below

Has anyone used LegalZoom for forming an LLC?

Should I incorporate myself or use a lawyer?

Is Clerky all I need to use to safely handle the incorporation and post incorporation for my startup?

What benefits does a startup get incorporating as a C-Corp with a lawyer in comparison to going with LegalZoom?

When should I incorporate my startup?Can I incorporate while employed? If not, is it kosher to promise the engineer equity and salary which ca…

, Serial entrepreneur, Founder of LawTrades, 500 Startups B15

When incorporating, small mistakes – especially with following through with requirements after filing with the state – often result in big consequences. Important transactions such as incorporating often involve secondary requirements that extend beyond the boilerplate legal documents you will find on sites like LegalZoom. Furthermore, regulations regarding formation are always subject to change which means that you could miss some vital updates that result in a faulty or incomplete application.

Without criticizing LegalZoom or any similar service, I would advise you to take a look at the disclaimers on the DIY sites since there are some pretty significant caveat emptors that will quickly reveal their limitations. Also, you run the risk when using DIY legal forms because they are largely standardized and may leave out important details specific to your company.

Startups that rely on cheaper options such as LegalZoom to incorporate can actually end up financially weaker as a result. Hiring an attorney to incorporate your startup over using LegalZoom can provide the following benefits:

An attorney will provide you with trustworthy and direct advice on the appropriate type of business entity for your startup and the right state to incorporate in;

An attorney will help you complete the tedious tasks following incorporation – such as naming a board, issuing stock, and completing any publication requirements;

An attorney will anticipate foreseeable legal issues (such as IP rights) regarding your startup and advise you accordingly;

An attorney representing a startup during formation will have a greater familiarity and better handle to represent the startup at a later point;

An attorney will discuss tax implications for choosing your respective business structure;

An attorney may provide alternative pay structures than the pay systems used by sites like LegalZoom;

An attorney will put your mind at ease when you wonder if you did it right; and

An attorney will save you the time that you need to grow your company at this initial, important stage.

LawTradescan connect you with vetted attorneys who offer affordable, top-notch services comparable to large law firms. Deciding whether to hire an attorney to assist you with incorporating is one of the first decisions you will make that can have detrimental effects years down the road. We can help alleviate those concerns at a low rate and completely on-demand.

Yes. There are certainly disadvantages. The decisions you make when you form your business are very consequential: from selecting a business structure (be it LLC, S-Corporation, C-Corporation, Benefit Corporation, etc.) and state of incorporation (Delaware or Nevada vs. home state) to filing the paperwork and drafting/implementing relevant governance documents, such as bylaws, a shareholders agreement, stock option plan and/or an operating agreement.

Here are a few reasons that it makes sense to work with a lawyer rather than a company like LegalZoom when youre starting a business:

Once established, it can be quite expensive (in both legal fees and depending on your situation, taxes) and cumbersome to change the form of your business or state of incorporation. While many startup founders believe that a C-Corp in Delaware is the only and best choice, that may not be true for your particular situation. Taking into account the particulars of your business and plans, a lawyer can advise you about the appropriate course of action. You can learn more about the different forms and their relative advantages and disadvantages

so you can educate yourself prior to discussing with a lawyer.

A lawyer can ensure all the documentation is filed correctly and any publication requirements are met.

A lawyer can help you hammer out important details regarding corporate governance. Each state has different default rules that you might be subject to unless you specify otherwise, and a lawyer can help make sure that your company is set up the way you want.

Your startup is unique, and a lawyer can help you foresee future legal issues and will tailor legal work to your specific situation. As others have mentioned, an automated document-filing system is a one-size-fits-all approach.

Your lawyer can help advise you on other legal issues that you might need to think about in the future (such as fundraising). Your lawyer can also give you cost estimates for these tasks so you can budget accordingly.

If youre looking to hire a lawyer for your startups needs while still enjoying the convenience of finding legal solutions for your startup online, consider checking out my company,Priori Legal. Priori is a curated legal marketplace that connects startups and founders with a network of vetted lawyers offering their most competitive hourly rates and exclusive flat fee packages. Our lawyers have experience in all types of startup law, from incorporation to raising capital to intellectual property, and we extensively vet new lawyer applicants.

I hope you keepPrioriin mind for your startups legal needs. Feel free to reach out to me directly with any questions!

, Founder of – diy startup incorporation, setup and corporate management

For startups aiming to go down the venture capital path, investors will require the certain agreements are in place before they invest, and the company will want to be sure to put in place controls around stock and IP ownership. Simply incorporating the company doesnt get you very far.

Having helped numerous startups from incorporation through exit, Ive seen a number of common mistakes that often occur. The most common are:

1. Founders stop at incorporation.This means there is a legal entity, but there is no board, no officers, no stockholders, no clarity around ownership of technology, etc.

2. Founders never issue the stock.Generally, stockholders have to pay fair market value for their stock, or contribute technology equally valued. At the early stages of the company before real value has been created, paying cash for 50% of the companys stock may not be a big concern when the fair market value is low. But, if the company has progressed, the value of that stock may be significant enough that the founder cant come up with the money to actually pay for it. Just giving the founder the stock is also a problem, because its generally going to be treated as employment income. That means taxes, potentially a lot of taxes, when there is no money to even pay them.

3. Founders issue the stock without vesting.Say three founders equally split the equity. So, everything is going fine until a few months later when one of them takes off and isnt helping any more. Shouldnt the company be able to get that stock or at least part back? Without vesting, the company cant–the founder bought the stock free and clear.

4. Founders issue the stock without a right of first refusal.A right of first refusal is the companys right to buy the stock from the founder before the founder can sell it to anyone else. Down the road when the company is a hot issue, one of the founders would be able to sell out early. This results in misaligned incentives, and the company could end up with unwanted stockholders.

5. Founders fail to assign technology to the company.Who owns valuable technology that is created when running the business is not always clear. So, companies should enter into IP assignment agreements with everybody involved in the creation of technology. Failure to do so could mean costly litigation and payouts in the future when there is value to fight over.

There are better tools for setting up the company. Disclaimer: Im the founder of, tools for founders and attorneys to set up a Delaware corporation as easily, efficiently and cleanly as possible.

THIS INFORMATION IS GENERAL AND DOESNT ACCOUNT FOR ANY PARTICULAR SET OF FACTS. THIS IS NOT, AND SHOULD NOT BE CONSTRUED AS, LEGAL ADVICE.

At the bottom of the Legal Zoom website are these words: Communications between you and LegalZoom are protected by ourbut not by the attorney-client privilege or as work product. LegalZoom provides access to independent attorneys and self-help services at your specific direction. We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.

In other words…Legal Zoom is a library of forms for which they take no responsibility. After you complete a form, it is in your best interest to send it to your attorney for review.

But you dont have an attorney. Thats why you went to Legal Zoom. I was like this before I joined LegalShield. For less than a $1 a day, I get forms just like Legal Zoom but I also get FREE document review from a real attorney. I can call a local law firm about anything as often as I want…for less than a $1 a day.

We all have three choices…go it alone and hope for the e Legal Zoom and hope for the best…or use LegalShield and know that a real attorney has our back.

If you want to know more about LegalShield, Im at

absolutely there are disadvantages to using LegalZoom for a startup. While LegalZoom (LZ) can be a valuable resource, it should not be used as a substitute for an attorney. The problem with LZ is that it is a one-sized fits all approach. Obviously there are going to be things overlooked and aspects of a document that should be tailored to your particular circumstance. Do you think an operating agreement between owners should be the same for a one-man coffee shop and for a 5 co-founder team of a tech company? Definitely not. Be careful using a one-sized fits all approach (as with any industry, not just legal).

In any area of life you get what you pay for. Using LZ is a cheap alternative to using a lawyer, so you will likely get a cheap result. LZ is fine for very basic things, but anything more than the most basic document (which is hard to know basic vs complex unless youre already an attorney) I would consult with an attorney. It costs 10x more to fix something that is wrong than to just do it right in the first place.

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Still have a question? Ask your own!

Has anyone used LegalZoom for forming an LLC?

Should I incorporate myself or use a lawyer?

Is Clerky all I need to use to safely handle the incorporation and post incorporation for my startup?

What benefits does a startup get incorporating as a C-Corp with a lawyer in comparison to going with LegalZoom?

When should I incorporate my startup?Can I incorporate while employed? If not, is it kosher to promise the engineer equity and salary which ca…

Are there any disadvantages of incorporating in Delaware for Canadians?

What are the differences between Clerky, LegalZoom, NCR, CSC, CT, etc. in terms of incorporation services?

Incorporation: How should you structure your startup?

What does LegalZooms interface look like?

Has anyone used Valcu to incorporate?