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Why You Shouldn’t Use LegalZoom for Your Business

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Choosing to start a business or legalize it is a big deal. Good for you. Of course, we know that late-night Googling to make sure your business is protected isn’t fun. And during those late-night sessions, you’ve probably seen or heard of LegalZoom.

Is it a good resource? Do you need their help filing an LLC or filling out a contract? We don’t think so.

For the sake of protecting your business completely, we encourage you to find resources that meet you where you are in business. Of course, what we’re about to share is our own experience and the experience and expertise of our founder, Christina Scalera. LegalZoom is more of a subscription-based model.

So… why don’t we think LegalZoom is a good idea for your business? Keep reading or watch the video below!

What is LegalZoom?

LegalZoom is an online company that intends to make legal resources accessible to everyone. LegalZoom works with a group of independent attorneys to make the process more personalized (or so they say). Most recently they launched LZ Tax, which offers tax advice and accounting solutions. According to their website, they’ve helped over 2 million businesses and have created over 3.5 million estate documents. 

With their reasonable prices and impressive numbers, it's no wonder so many business owners are intrigued by their offers. However, there are things to consider before making that decision.

What LegalZoomdoesn’t do for your biz

While LegalZoom says it’s designed to personalize and streamline the legal process for all people, it is important to remember that LegalZoom is not a lawyer. You will not receive the type of personalized process that you would have with a lawyer. (As a note, The Contract Shop® is not a law firm, either, but we are owned and operated by one.) 

Why does this matter? Because LegalZoom offers services, like filing an LLC or trademark for you – which they actually can’t do because they’re not a lawyer! Plus, they charge a lot of money to file LLC paperwork for you, which is honestly one of the easiest things to do for your business on your own. In fact, we have a ton of  videos about LLC formation over on our YouTube channel. For free.

The other thing to note? LegalZoom isn’t required to provide the most up-to-date information in their advice, blogs, or even sold products.

In their  Terms of Use, LegalZoom also makes it clear that their online portal is intended to only provide a general understanding of the law for people who want to prepare their own legal documents. It’s also made clear that, while they strive to ensure all of their documents are accurate, current, and up-to-date, the law is always changing so they cannot guarantee that their information is accurate.

Who wants to file paperwork or use a contract only to find out the information is outdated?

7 reasons you shouldn't use legal zoom for your biz

Pros & cons of LegalZoom

We completely understand that there are some PROS to using LegalZoom:

  • The initial investment is less expensive than hiring a lawyer
  • Their contracts or other documents may work well for some
  • 60 day satisfaction guarantee
  • They do have a community of lawyers available to ask  some  questions

But, when you ask us, the CONS outweigh the few pros. These include:

  • Lots of upselling to get you the right product
  • Their paid products tend to be generic/not exactly what people expected
  • Turnaround time can be long
  • Can be more expensive than buying templates or resources from other companies (ahem, The Contract Shop®)
  • Some services require a subscription

Okay, okay, we’ll telling you about the downsides of LegalZoom (we’ll let their reviews do that for them). But you get our point, right? When starting a business, you want to make sure you’re getting it right the first time. Otherwise, you’ll spend more money and time fixing problems down the road… and that doesn’t even mention the stress around legal woes. Yikes.

LegalZoom is a legitimate business and can be beneficial to some, but there are also some things that you can file yourself instead of spending money with them. Applying for a Federal Employer Identification Number is an example. It is completely free to file for an EIN, however, LegalZoom charges $79 to apply on your behalf… yeah, how about no.

when legalzoom isn't right for your biz

At the end of the day, it’s your decision to use LegalZoom or not

Let’s face it: LegalZoom is an organization that attempts to give you a quick legal fix but you may end up cleaning up the mess on the back end (with more money). Instead, you can always use our templates — which have been used by thousands of other creatives and are updated each year by a cohort of other attorneys and experts. Plus, since we were founded by a creative business owner, you’ll find a variety of contract templates you wouldn’t find anywhere else. Would LegalZoom have a template for equestrian photography? Thought not.



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