Is LegalZoom Legit?
The limited liability company is an increasingly popular business structure in America, with thousands of new LLCs being formed every day. The LLC is effectually a hybrid business type, occupying the space between the rigid formalities of a corporation, and the casual nature of a general partnership or sole proprietorship.
While you can create your own LLC, the process for doing so varies from state to state, so there’s no uniform process for forming one. This can make it complicated and time-consuming. Some entrepreneurs choose to hire a business attorney to form their limited liability companies, but this route can be expensive, costing hundreds or even thousands of dollars in attorney’s fees.
The other option is to hire an LLC website to form your company. There are many companies that offer limited liability company formation services online, and it’s sometimes difficult to determine which one has your best interests in mind. If you’re looking to form your own LLC, but you’re not quite sure where to turn, we hope that our comprehensive reviews can help you decide.
In this review, we’ll take a close look at LegalZoom, one of the top service providers in the industry. Are they the right service to form your new LLC?
About LegalZoom
Since they formed in 1999, LegalZoom has served around 3.6 million customers, which includes the formation of over one million businesses. While they clearly have a high degree of experience, their customer feedback leaves something to be desired.
LegalZoom’s entire business model revolves around helping people confidently accomplish tricky tasks in the business world. According to the “Our commitment” portion of their website, “You’re never alone — our Customer Care agents, independent network of attorneys, and tax pro service partner are along for the ride. Call, email, or chat if you ever need support (or a pep talk).”
A fun fact about LegalZoom is that they have relationships with many qualified business attorneys. LegalZoom says they have a thorough vetting process for their affiliated lawyers, and that they focus on building relationships with attorneys “who are friendly and speak in plain English (yes, they do exist!).”
30-Second Summary Of Our Review
When you discuss online incorporation services, the first name that comes to nearly everyone’s mind is LegalZoom. That’s because they’ve served millions of customers, and they also advertise heavily across several different mediums. LegalZoom’s pricing models are more costly than many of their competitors, and they do not include registered agent service with any of their LLC formation packages. In short, their actual service offerings do not live up to the lofty expectations you may have, given their status as one of the industry leaders.
LegalZoom Strengths
- Lots of experience and high customer volume – Not many competitors can say that they’ve served millions of customers, but LegalZoom can. They have a ton of experience that gives them an advantage over most companies in this industry.
- Wide-reaching name recognition – LegalZoom advertises more than the vast majority of their competitors, which is part of why they’re so popular. Their brand power is unrivaled.
- Many other services available – Few companies offer as wide a variety of services as LegalZoom does. They provide personal services like wills and power of attorney, and of course they also have a vast array of business services as well.
LegalZoom Weaknesses
- Mediocre customer reviews – LegalZoom has quite a few reviews available online, but they’re split relatively equally between positive and negative scores. Some of their competitors have nearly universal praise from their clients.
- High prices – LegalZoom’s base-rate LLC formation package costs $79 and doesn’t include many features. Their upper-tier packages are outrageously overpriced, costing in excess of $300 while failing to justify those price tags with advanced features.
- No registered agent included with LLC formations – Some competitors, like Northwest Registered Agent and ZenBusiness, include a full year of registered agent service with any business formation package. LegalZoom does not.
- Many upsells throughout application process – Upsells are always annoying, and LegalZoom truly piles them on. Depending on which package you start with, you could encounter over $1,000 of upsell attempts as you work your way through their order form.
Pricing & Additional Features
- Economy ($79) – This package starts with the essential elements of formation, including the full preparation of your articles of organization, and the filing of the completed documents with your state. LegalZoom also includes a banking authorization letter to help you open business checking and/or savings accounts.
- Standard ($329) – This package includes all features of the Economy package, then adds an organizer embossed with your company name, a decorative seal with your business info on it, and 20 customized LLC membership certificates.
- Express Gold ($349) – This package starts with all features from the Standard package, then adds expedited processing with your state (speeding up your formation process to 7-10 business days in most states), along with express shipping of all documents.
LegalZoom vs Other LLC Services
To be honest, there are several LLC services that we prefer to LegalZoom. While LegalZoom has impressive experience and brand power, they fall short when it comes to pricing and features.
For more information, take a look at our Zen Business vs LegalZoom comparison guide, or check out our list of the top LLC services available online.
Online Customer Reviews
We were able to find over 1,400 reviews for LegalZoom’s services, with the three largest collections of feedback belonging to Sitejabber, Consumer Affairs, and the Better Business Bureau.
While the 859 reviews on Sitejabber are more often positive than negative, the 395 reviews on Consumer Affairs are split about 50/50, and the 174 reviews on BBB are almost all negative.
In their positive reviews, LegalZoom clients often comment on the helpful support they received from LegalZoom representatives, frequently thanking them by name. However, in their negative reviews, clients often complain about the poor quality of customer support, so it seems this aspect of their business is a bit inconsistent. In addition, we found quite a few clients who were upset with what they viewed as billing errors, as well as mistakes made in their business filings.
Customer Service Quality
As we noted in the previous section, LegalZoom has a bit of a shaky reputation when it comes to customer support. In our experience, their phone support is quite good, as we’ve received thorough and accurate responses from their service reps whenever we’ve called them with questions or concerns.
On the other hand, we’ve also tested their email support, which is a different story entirely. We’ve actually waited over a full week to get a response to emails in the past, and when LegalZoom does respond to email inquiries, it’s often just a form email that doesn’t actually answer our questions.
In short, we can see why they have a mixed reputation in this regard, because our own experiences with them have been hit-or-miss as well.
Main Reasons to Use LegalZoom
If you prioritize experience and customer volume, LegalZoom is clearly a great option. The best argument in their favor is the “millions of customers can’t be wrong” reasoning, which does have some merit.
Main Reasons Not to Use LegalZoom
Do you prefer to use services that can save you some money, while also providing additional features? Do you like to see positive customer feedback before making a purchase? These are a couple of good reasons to look elsewhere.
Our Recommendation – LegalZoom Scores 3.8/5
LegalZoom is quite appealing for entrepreneurs who want a company with a high client volume and wide advertising reach to form their LLCs. Aside from that, they don’t have any major advantages over competitors like Northwest and Zen Business, and we strongly recommend those options over LegalZoom.