LegalZoom | Reviews by SmallBizGenius

Pros:

  • pros Beginner-friendly
  • pros Unlimited legal consultations
  • pros Total compliance feature
  • pros 100% money-back guarantee
  • pros Helpful customer service

Cons:

  • cons Slow processing with the basic package
  • cons Expensive registered agent services
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Score: A+

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Company Overview

LegalZoom was founded in 2001, and during nearly two decades of existence it has helped more than two million people establish their companies. That’s about 300 new companies per day. With this workload, it’s more than impressive that the company has managed to keep the quality of its service at such a high level. But this doesn’t mean that the LegalZoom reviews on the web are uniformly positive. For example, experienced entrepreneurs may find LegalZoom’s detailed, step-by-step application process maddeningly slow, but that’s a plus for those who haven’t started a company before. So before making a final judgement, you should develop a clear idea of your needs and how they match LegalZoom’s unique collection of strengths and weaknesses.

Are LegalZoom’s services worth your time and money? How does this service stack up against LegalZoom competitors? Does the company treat customers fairly? Let’s dig in.

Features

LegalZoom relies on its application wizard to figure out exactly what features you might need as you establish a new business. Some services are introduced as parts of a package, while others are offered on an à la carte basis based on your needs.

Registered Agent Services

Many companies provide eye-catching low prices for bare-bones LLC-formation services, counting on high-priced additional assistance to make their profits. One example? LegalZoom registered agent reviews reveal that the company charges $249 for this simple but legally required service. And that’s just for the first year. The renewal rate is subject to change, so you never know what to expect. While it is convenient to check the “registered agent” box and let LegalZoom handle every aspect of your start-up paperwork, you can save money by shopping around for this essential service.

Operating Agreement

This essential document costs $99 and defines your new company’s financial and functional decision-making process in the eyes of the law. You can add an Employer Identification Number to the bundle for $60 more or opt for a bundle that includes a variety of necessary additional licenses for a total of $199. This is a good deal, considering you’ll need all of these documents to get your business running, so you might as well pick up the whole bundle from LegalZoom.

Smart Employer Service

LegalZoom LLC reviews your application and invariably recommends its “smart employer service” for a monthly subscription price of $39.99. You get legal help in short bursts of 30 minutes per issue, which seems like a confusing system, especially considering the company’s phrasing – “unlimited 30-minute consultations” with professionals. The subscription also gives you access to a large library of legal and regulatory forms businesses need on a regular basis. Despite the confusion, we think the smart employer service looks like a pretty good deal.

Total Compliance

LegalZoom’s “total compliance” subscription is all about peace of mind. For $280 a year, the company keeps track of your paperwork and makes sure you don’t miss any filing dates. LegalZoom incorporation reviews confirm that the company pays all of the fines and penalties that result from a missed date if you have subscribed to this service. It is comforting to know that LegalZoom takes its responsibilities seriously.

Application Process

To get started, simply select a business formation category from the homepage and choose the type of organization you want. There are plenty of explanations, so even if you have no previous experience, you’ll be able to make an informed decision. Despite that, this beginner-friendly environment with numerous guides and explanations does slow down the entire process. This is one of the main user complaints in public LegalZoom reviews for LLC.  

The process works like this:

  • Pick a name – If you have a creative block, you can always skip this step and leave it for later.
  • Choose a state – The best option is to choose your own state first and then discuss your options with the company’s advisers. Some states offer lower taxes or other benefits but they are often the ones that charge re-registration fees, so it’s not always a straightforward decision.
  • Provide information about your new company – The inquisitive nature of the company’s setup wizard can be frustrating at times. It often feels like an interactive presentation of its services that takes up a lot of your time.
  • Pick out main services – These include the services of a registered agent, creation of the operating agreement, and other essential features. The high cost of LegalZoom services is reflected on the bottom line. Alternate providers may give you a better deal on some of LegalZoom’s à la carte services.
  • Choose a package – To complete your order, choose one of the company’s three basic packages – Economy, Standard, or Express Gold.

 

You can save your progress at any time and finish the application later. Considering the amount of time needed to read through all the specifications and distractions, you might need this feature.

Pricing

LegalZoom pricing is not disclosed in a straightforward way. The company presents recommended services, explains their benefits, and doesn’t discuss the cost until the very end. The process seems designed to get you to pay for a lot of expensive optional services.

There are three main packages to choose from: Economy, Standard, and Express Gold. Although each package has a few unique features, the main factor that distinguishes them is processing speed.

Economy is the simplest and most affordable package: $79 plus state-specific filing fees. You won’t find many companies offering alternatives that are cheaper than LegalZoom Economy. With a processing time of 30 business days, this package includes:

  • Name check and business filing: LegalZoom checks to see if your desired company name is available in your state and files the papers.
  • Articles of organization: This document is required when forming a business. In some states it is referred to as a certificate of organization or certificate of formation.
  • LLC Next Steps Guide: The company offers a comprehensive guide to help you plan ahead and understand the formalities.
  • Peace of Mind review:– LegalZoom trademarked its reviewing method as Peace of Mind. It ensures that once the automated wizard concludes its work, experts individually review all of the orders manually.
  • Lifetime Customer Support – Phone and email correspondence with the company’s representatives and designated professionals.
  • Financial Account Authorization Letter – Another formal document necessary for opening a bank account.

The Standard package is better than LegalZoom Economy because it includes a couple of additional features and, more importantly, processing time of just 15 business days. Besides everything in the Economy package, the $329 Standard package includes:

  • LegalZoom founder’s kit: A notebook for holding documents, company certificates, and a corporate seal. It gives your business a dose of professionalism.
  • Newsletter: This is really a continuation of the Next Steps guide. You get various business management tips via email on a regular basis.

You might argue that these additional items are hardly worth the price – and you would be right. LegalZoom reviews make it clear that the main benefit here is the speed. Your company is prioritized internally, which reduces the order processing time by half. Whether that’s worth the extra $250 is up to you.

With Express Gold, your startup paperwork is processed in just 10 business days. If that speed is important to you, then you might be able to justify paying the $349 fee. Your waiting time is reduced by five days for just $20 compared to LegalZoom Standard. Your order gets pushed to the front of the queue and might be done even faster.

Is LegalZoom worth it? The company offers a fair price for the Economy package. Many entrepreneurs seem happy with the Standard and Express Gold packages, but unless you’re in a hurry to get your paperwork filed for some reason, there is little reason to pay the higher costs for those packages.

BBB Rating & User Reviews

The Better Business Bureau has been around for more than a century, making sure companies live up to industry standards and offer fair value to customers. The rating system is based on user complaints, the company’s transparency, usual business practices, and numerous other factors. With that in mind, when a company like LegalZoom receives an A+ rating from this reputable evaluator, it certainly carries some weight.

LegalZoom reviews on BBB aren’t stellar. The overall score of 2.5 stars is the average from more than 260 users. Either they love the company or they hate it; there’s no middle ground. However, user objections are promptly answered by company representatives, which is a good sign. Companies earn higher ratings by responding promptly to complaints.

Speaking of LegalZoom complaints, you will find many at Trustpilot, where about 82% of reviewers say they’ve had bad experiences with the company.

ConsumerAffairs gives the company 3.5 stars based on more than 470 reviews. Some of the most positive comments come from long-term verified users.

Comparisons

LegalZoom customer reviews often include comparisons to competitors like Rocket Lawyer and Northwest. Both companies have advantages and disadvantages to consider. Let’s take a look.

LegalZoom vs Rocket Lawyer

Some users prefer Rocket Lawyer because it offers a free, seven-day trial. Because all of the company’s services are available during the trial period, entrepreneurs have found they can file their papers and effectively get their companies launched for the price of the state filing fee. That’s a bargain – but user say LegalZoom offers a superior customer experience, making it easy for clients to get fast, valuable legal advice. Both companies have a good reputation and offer high-quality levels of service.

LegalZoom vs Northwest

The biggest difference between the LegalZoom and Northwest application process is the speed. LegalZoom provides abundant information about its services, which drastically slows down the checkout. Northwest offers a more direct approach that values your time above all.

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Conclusion

Despite the fact that the application process is a bit on the slow side and might give you information overload, you won’t find many other problems with LegalZoom. It is a reputable company with nearly two decades of experience and more than 2 million businesses behind it. The basic LLC formation package is quite affordable, but it takes an unreasonable 30 business days to complete. The additional features really sell the service – legal consultants, a library of necessary LLC forms, and expensive registered agent services. We recommend it to newcomers to the business world and people who enjoy learning all they can about forming a company.

FAQ

How much does LegalZoom cost?

The basic package that we recommend in our LegalZoom review costs only $79. The other two packages are more expensive, but they reduce the time it takes for the application to come through. The $329 package brings processing time down to 15 business days, while $20 more will reduce it to just 10 days. In most cases, you are likely to pay additional fees for a registered agent, legal advice, or business documents.

Is LegalZoom worth the money?

If you’re only looking for filing services and won’t need an expensive registered agent or additional documents, this is the right company for you. Our LegalZoom incorporation review lists all the details so you know what you’re getting yourself into before spending a penny. Depending on your circumstances, you might see LegalZoom as a great inexpensive opportunity, or a slow, ineffective filing platform.

How do I quit LegalZoom?

To cancel your LegalZoom subscription, simply sign in, open My Account, and find your plan. You will find the Manage My Account button in the top left corner of the page. From there, you will be able to cancel your subscription. Alternatively, you can just contact customer support. Based on what we have seen online, reading the fine print or enlisting the aid of customer service agents would cut down on the number of negative LegalZoom reviews.

Is LegalZoom legit?

According to our research, it surely is. It’s a good choice if you are curious about company formation, if you’re willing to spend a bit more to get all your business-formation help from a single company, or you foresee a need for occasional consultation with legal experts.