LegalZoom Review – Is It Safe?

by Neal Frankle, CFP ®

My clients need legal services from time to time. But they don’t want to pawn their own livers in order to pay an attorney. They’ve asked me about LegalZoom and I decided to perform an in-depth LegalZoom review. Of course, the big questions are:

  1. Is the service easy to use?
  2. Can LegalZoom be trusted?

I went through the site recently and was really impressed. My answers are “yes” to both.

Generally speaking, you can save 85% of the cost of an attorney by using LegalZoom.com. Sounds pretty enticing. They have very simple questionnaires that are easy to understand and you can complete them quickly.. They also have live human telephone support – a rare thing these days. I went through some of the questions and help screens myself. I have to admit that I got better explanations from the LegalZoom pop-ups than I usually do from attorneys when I speak to them on behalf of some of my clients.

I also like the fact that Robert Shapiro is behind this enterprise – a top-notch attorney with a reputation to protect. Laws change all the time and I expect the site to update their programs regularly. I feel more comfortable knowing that Mr. Shapiro has a lot to lose if he doesn’t keep the information up-to-date.

I was also super impressed by the pricing structure. For example, a living trust starts at $200 while attorneys charge 10 times that amount … and more. If you don’t have a living trust, why not? Get started and save a ton of money. (Oh and by the way… it’s not unheard of to find attorneys who charge you $2,000 for a living trust and then go to LegalZoom and have the documents created for about $200.)

Another really powerful benefit is that Legal Zoom offers a free review by a document specialist. These folks make sure your document is accurate and complete. In case you’re wondering, this is no fly by night outfit.

They have a huge customer service department. When I called, I reached a human being immediately. I almost cried tears of joy. Also,they have over 150 people processing paperwork for their customers. What’s more, they’ve formed over 80,000 Incorporations and LLC’s . Finally, they claim to do more Last Will and Testaments and Trademark documents than anyone else in the world

I’ve had a number of clients who have used LegalZoom and while I’m not attorney, the documents I’ve seen look solid. I did further research and found 80% of the customer feedback to be positive.

Is LegalZoom Right For You?

It depends on your needs. If your situation is straight forward, I’d strongly encourage you to consider it. They have great reviews for the following services:

If your situation is complicated, I’d probably rely on an attorney. I’d just make sure she isn’t using LegalZoom and marking up the price. One approach that others have used is to go ahead and have LegalZoom do the heavy lifting by creating the documents. Then they have a paralegal give their documents the once over to make sure everything is kosher.

If you’ve been procrastinating and putting off getting some important legal work done, I strongly encourage you to check out LegalZoom.com. Have you used LegalZoom? What was your experience?

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Thisiswhyubroke.com! May 20, 2010 at 9:32 PM

I know a couple ex employees of LegalZoom out here in L.a. and even though they are ex employees they still recommend it as a great service.

Squirrelers May 20, 2010 at 9:53 AM

Excellent topic. I have wondered about the quality of their offerings, so its good to see this discussion. Seems like there are mixed opinions. I would personally feel more comfortable haveing an attorney review documents, particularly if large sums of money (actual or potential earnings or liability) were involved. But, that’s just erring on the side of conservatism.

Nunzio Bruno May 19, 2010 at 2:47 PM

Great review! I have used attorneys in the past to set up and manage LLC’s before. I just surfed the lealzoom site quickly and they are advertising costs that were 1/10th of what I paid. That’s intense! I didn’t do the questionnaire but if all I needed was a simple set up then I would def use them.

Neal@wealthpilgrim May 19, 2010 at 1:14 PM

Kim,

You make some very valid and important points. Having said that, I wonder if going to LegalZoom and then having a paralegal or even attorney review the document would be useful.

I’ve worked w/many lawyers in the past. Several simply used a cookie cutter trust and market up the cost to clients.

I’ve had these cookie cutter trusts reviewed by other attorneys and they seemed to pass muster. Why pay for the mark up on a simple trust (for example).

I created my own LLC years ago rather than pay the enormous fees the lawyer wanted. I’d use LegalZoom in a heart beat for something like that.

Ryan @ Planting Dollars May 19, 2010 at 11:03 AM

Thanks for sharing your thoughts on Legal Zoom, I’ve been considering using them for setting up an LLC, but haven’t looked into it yet. Have you had any experience with using them for an LLC yet?

Harbor May 19, 2010 at 11:49 AM

I used legal zoom to set-up my DBA business name (in Texas). Their service is excellent, their staff are all friendly and efficient. For what I paid I was very surprised at the amount of updates and contact I got from them. I am very pleased and will definitely be using them again. I recommend them to others.

Andy May 19, 2010 at 10:25 AM

I used legal zoom to set-up my DBA business name (in Texas). Their service is excellent, their staff are all friendly and efficient. For what I paid I was very surprised at the amount of updates and contact I got from them. I am very pleased and will definitely be using them again. I recommend them to others.

Joe Plemon May 19, 2010 at 6:46 AM

Thanks for the review. I, like many others, have seen their commercials but had heard no third party unbiased recommendation. I have no immediate need, but it is good to know that Legal Zoom is credible.

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