LegalZoom.com, Inc. is an online legal technology company that helps its customers create legal documents without necessarily having to hire a lawyer. Available documents include wills and living trusts, business formation documents, copyright registrations, and trademark applications. The company also offers attorney referrals and registered agent services. LegalZoom is a disruptive innovator in the market for legal services. Its efforts to utilize computer technology to make legal services affordable and accessible have been noted by both the American Bar Association and in the business press.
History
LegalZoom was founded by Brian P. Y. Liu, Brian S. Lee, Edward R. Hartman, and Robert Shapiro. Since Lee, Hartman, and Liu were not well known, they discussed a number of prominent individuals who could lend credibility to their proposed enterprise; they decided on the Los Angeles litigator Robert Shapiro. Lee managed to contact Shapiro, and after some discussion Shapiro agreed to help the company get off the ground. The company began offering legal service products to the public on March 12, 2001. LegalZoom has been recognized a number of times over the years for its entrepreneurial acumen. In 2011, Business Insider ranked LegalZoom 27th on its list of the world's most valuable startups, and in 2012, Fast Company ranked LegalZoom 26th on its list of the most innovative companies. In September 2012, LegalZoom formed a partnership with the United Kingdom-based legal services provider QualitySolicitors, as part of which the companies jointly offer online legal services in the United Kingdom including company formations and divorce documents. On January 6, 2014, European private capital firm Permira announced its intent to acquire $200 million in the outstanding equity of LegalZoom and become its largest shareholder pending regulatory approval. On February 14, 2014 Permira announced that the deal was complete. In 2015, LegalZoom announced they were to make their first UK acquisition. The acquired firm was Beaumont Legal, a 200-year-old firm in Wakefield, West Yorkshire, England which describes itself as one of the largest conveyancers in the country.
Services
LegalZoom provides legal services in various common categories including copyrights, DBAs, business formation, trusts, wills, patents, power of attorney, pre-nuptial agreements, and real estate leases. The company also offers legal plans through its network of independent attorneys. Middle-class families and small business owners are the primary target markets for LegalZoom's services.
Reviews
The September 2012 issue of Consumer Reports magazine gave mixed reviews to the computer-aided legal forms generated by LegalZoom and two of its competitors, Nolo and Rocket Lawyer. The evaluation found that all three companies provided documents "for a fraction of what you’d pay a lawyer." The CR review also said that "sing any of the three services is generally better than drafting the documents yourself without legal training or not having them at all. But unless your needs are simple... none of the will-writing products is likely to entirely meet your needs." It also found in some cases, the other non-will documents weren’t specific enough or contained language that could potentially lead to an unintended result. A 2016 analysis posted on the e-commerce blogging site "Blogtrepreneur" examined some of the reviews given to LegalZoom by experts and by its customers. The analysis found that "not all of the LegalZoom reviews have been flattering," but noted that the company is accredited by the Better Business Bureau, that it has been in business since 2001, and called LegalZoom "a fairly noteworthy and respected business."
Increasing access to legal services
LegalZoom claims the use of computer technology often results in lower prices for the specific services it renders than those charged by traditional lawyers. Consequently, it is regularly cited as an example of "disruptive innovation" in the legal marketplace. The company asserts that this disruption benefits people who otherwise could not hire a lawyer by expanding their access to legal services. In 2015, LegalZoom and the North Carolina State Bar Association settled years of litigation by agreeing that companies like LegalZoom which offer automated legal document preparation will not violate North Carolina's prohibitions against the unauthorized practice of law if the companies register with the state and comply with certain consumer protection procedures. Following the settlement, the US Federal Trade Commission and the US Department of Justice jointly advised the North Carolina Legislature that the state should avoid placing overly broad restrictions on companies that offer computer-facilitated legal services. In discussing the potential benefits from such software and websites, the two agencies stated that "nteractive software for generating legal forms may be more cost-effective for some consumers, may exert downward price pressure on licensed lawyer services, and may promote the more efficient and convenient provision of legal services. Such products may also help increase access to legal services..."
