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Pros and Cons of Using LegalZoom vs. Hiring an Attorney

Legal matters are already confusing enough for even the savvy business or home owner, so why complicate the matter further by adding high fees from attorneys, and stacks of paperwork you're required to complete and mail directly to state agencies? Legalzoom cuts down the middleman and provides a convenient and headache free service for the novice, first time business owner, home owner, or individual seeking legal advice for a fraction of the cost of visiting an overpriced attorney. Is it really the better choice though? Can you trust the outcome when you complete legal documents on your own, with no trained attorney at your side?
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Legal Zoom is a registered and bonded legal document assistant which was developed by experienced attorneys. It aims to provide easy-to-use and easy-to-create legal documents which are usually processed online. Legal Zoom has become the premier online legal destination not only for small businesses ... read more...
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Legal Zoom — Best Features
Saves Time, Money, and a Trip to the Lawyer's Office
User Friendly Interface and Easy to Understand Documentation
Best for: Individuals seeking a user-friendly interface to form their business or legal advice from experts at a very low out of pocket cost. Individuals who require legal forms or documents, help trademarking their business, assistance writing a last will and testament, help with personal services like bankruptcy or divorce, and real estate ventures.
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Review

As a retired business owner, I went the route of completing legal documents and incorporation on my own, thinking it would be more economical if I did it all. Suffice it to say, I was wrong. I was able to complete the documents and I eventually sent them in and completed all necessary requirements, but in the end, even I wasn't prepared to face the loopholes I overlooked. This is why consulting an expert or an expert online service is the best way to approach legal matters.

LLC Formation With Legal Zoom vs Attorney

LLC's are exactly what the acronym represents-Limited Liability. These forms of business ownership are highly attractive to those seeking personal protection of their assets.  An LLC provides them this comfort by protecting owners (members), who are typically not personally responsible for the business debts and liabilities of the LLC. Creditors cannot pursue the personal assets (house, savings accounts, etc.) of the owners to pay business debts.

Legalzoom

Pros

  • Easily transfer an existing business or partnership to an LLC within 20 minutes
  • LegalZip® software creates your LLC documents quickly
  • Reasonable startup costs
  • If you maintain Business Advantage Pro you receive a 25% Discount on your attorney's hourly rate for follow up work and 10% off LegalZoom Products
  • FREE online visibility package with PRWeb - a $200 value, with Standard and Express Gold
  • FREE - Full Version of Sage 50 Pro Accounting 2013 - Full Downloadable Version - a $269.99 value, with Express Gold
  • Each LegalZoom LLC package is backed by a 100% satisfaction guarantee and comes with lifetime customer support

Cons

  • Automation of legal document completion (LegalZip® software) is not fool proof and mistakes can occur, resulting in liabilities
  • Costly to maintain subscriptions after free trial of Business Advantage Pro 
  • Attorney consultations are not free with Standard or Economy packages
  • Standard and Economy Packages do not include Federal Tax ID (EIN) application preparation
  • New legal matters are the business owner's responsibility under the Standard and Economy Package
  • Owners of LLC have to operate the LLC separately from their personal affairs and this is not outlined on Legalzoom's website
  • Charge for Federal Tax ID Application. EIN numbers are FREE through the IRS
  • Lack of Disclosure of Annual fees to maintain an LLC  

Attorney

Pros

  • There is no package discriminating against certain services
  • No upselling of software
  • Upfront quotes and explanation of costs without added fees
  • Legal advice and maintenance of LLC documentation and renewal services often included in flat upfront fee
  • Personal one on one attention immediately during formation of company
  • Explanation of liabilities upfront in case of lawsuits
  • Disclosure of Annual fees to maintain an LLC  
  • Some attorneys include the required state fees and other expenses in their total cost

Cons

  • Fees can be costly upfront ($1000-3000 Plus State Fees up to $800)
  • Attorneys charge $100 -$300 or more an hour to guide you through the legal necesseties of setting up an LLC
  • Waiting period for form acceptance by state agencies can be lengthy
  • Frequent trips to the attorney office to sign and resign documents

Incorporation With Legal Zoom vs Attorney

Incorporation can be a very confusing process if you complete it on your own. If you are filing your paperwork with the state through a site like Legalzoom, you have little one on one time with an experienced business lawyer. I completed incorporation of my S-corp completely on my own with online forms, and to be honest, I will not do the same in the future. I was not prepared for the personal liabilitiy when I completed my forms as the registered agent. All my personal assets were essentially up for grabs and I wasn't aware of this until it was too late. 

Legalzoom

Pros

  • Lower upfront costs from $99-$369 to incorporate on yor own with no hidden fees
  • $50,000 Peace of Mind Guarantee
  • Legal advice and assistance available for a small fee monthly

Cons

  • Lack of liability information in case you are presented with a lawsuit
  • Little description pertaining to S and C-corp liabilities
  • No trusted legal representation in case of lawsuit

Attorney

Pros

  • Personal liability protection and coverage of assets
  • Complete explanations of the benefits of S-corps and C-corps
  • Shareholder benefit explanations and maintenance of relationships

Cons

  • High costs including mandated goverment fees
  • Long waiting times for final incorporation documents

Trademark with Legalzoom Vs Attorney 

So, you've started a band, your Youtube videos are getting thousands and thousands of hits, and your name is plastered everywhere. Is there a problem? That depends on whether or not you've trademarked your band's name.

Trademarking a product, whether that's a band, product, or your personal name, is an extensive process if you do it face to face with an attorney. However, you also have legal protection in court in case of prosecution. Legalzoom is certainly an option to complete this process, but just remember that the process doesn't stop when you file out forms. Read between the lines and know your rights.

Legalzoom

Pros

  • Complete Coverage and State Feeds for $189.00
  • Free news release from PRWeb to announce your trademark (a $200 value)
  • Attorney support for 25% Off: Personalized, one-on-one attention from an experienced attorney
  • 10% savings on additional LegalZoom services
  • Unlimited access to LegalZoom's extensive library of downloadable forms with Complete Coverage Package
  • Each LegalZoom Trademark package is backed by our 100% satisfaction guarantee and comes with lifetime customer support

Cons

  • Too much upselling of unnecessary products
  • After the 30-day trial period, benefits to the Business Legal Plan (also Business Advantage Pro) are no longer free 
  • Lack of legal representation in case of persecution after documents filled  insufficiently
  • Processing fees for additional services

Attorney

Pros

  • Knowledge of responding to refusals or an opposition in a timely manner
  • Less time and money than doing it yourself
  • You need a Trademark Attorney to represent you in the prosecution of a trademark application

Cons

  • No personal satisfaction guarantee with many attorneys
  • Fees for extra form filling
  • Attorney support at full price
  • Upfront legal fees to search for an available trademark
  • Overall long term expenses and personal loss
  • Long waiting times, up to 2 years

Personal Services Offered By Legalzoom

Real Estate Pros

  • Customizable real estate leases for only $29.00
  • Forms for managing your rental property
  • Unlimited revisions for 6 months wth premier Package ($49)
  • Real Estate Lease package is backed by 100% satisfaction guarantee and comes with lifetime customer support

Cons

  • Forms are available for free online or for a very small fee 
  • Changes can not be made to lease after trial period
  • No personalization ability 

Bankruptcy Pros

  • Completely Free evaluation of circumstances prior to filling out forms
  • Bankruptcy attorney will handle your evaluation
  • Costs are significantly lower because you are doing the work

Cons

  • Costs are not explicitly stated on the site
  • Hidden filing fees and upselling
  • Cost is closer to $1200-$3000 to complete filing, same as an attorney
  • Similar to filing on your own which is never suggested given the requirements to appear in court in case of erroneous file errors
  • You can lose assets in a bankruptcy if you don’t file your forms correctly, and with an attorney's assistance

Last Will and Testament Pros

  • Each LegalZoom Last Will package is backed by a 100% satisfaction guarantee and comes with lifetime customer support
  • Cost: $69 for Basic and $79 for Comphrehensive
  • Legal Advantage Plus 30-day trial*
  • $50,000 Peace of Mind Guarantee
  • Same day service for additional fee
  • Easy-to-follow guides explaining your last will
  • Offers self proving last wills which states that witnesses do not have to be located after your death

Cons

  • After the 30-day trial period, benefits to the Personal Legal Plan (also Legal Advantage Plus) continue automatically for $14.99 per month
  • Upselling of unnecessary products
  • Lots of paperwork
  • Criteria must be met by you otherwise the court will not enforce your last will

Divorce Pros

  • Cost: $299
  • Additional $100-$200 to file a response to the petition
  • The LegalZoom Divorce package offers exceptional value and comes backed by a 100% satisfaction guarantee

Cons

  • Cost is closer to $1000 after added fees
  • Legalzoom does not provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.
  • Without the proper representation and advice you may not be able to complete the process in court. It's harder to represent yourself in bankruptcy court without an attonrey if you don't know the law.

Personal Services Offered by an Attorney

Real Estate Pros

  • Customizable real estate leases 
  • Forms for managing your rental property
  • Unlimited revisions
  • Ongoing legal advice and representation
  • Upfront explanation of liabilities

Cons

  • Costs are relatively high for drafting the lease and reviewing it ($250 and up). Attorneys will charge by the hour and their rate is dependent on their years of experience
  • Extra Legal advice costs extra 

 Bankruptcy Pros

  • Free evaluation and consultation of circumstances prior to filling
  • To file bankruptcy successfully, you have to be aware of your rights, and you need to know how to protect your financial interests and work effectively with your creditors. Attorneys help you do this.
  • It's harder to represent yourself in bankruptcy court without an attorney if you don't know the law. Trained bankruptcy attorneys will be able to complete the process.

Cons

  • Cost is closer to $1200-$3000 to complete filing
  • Lengthy process and lots of extra paperwork

Last Will and Testament Pros

  • Attorneys don’t simply fill in forms like you would do yourself at Legalzoom
  • Attorneys analyze your unique circumstances, explain the ramifications of your choices, advise you on your objectives, and tailor your documents to address your unique estate planning needs (Legalzoom does not do this)
  • Can be completed for FREE with some volunteer attorneys and legal aid if you are low income
  • Simple costs are usually less than $500

Cons

  • Lots of paperwork
  • Can be costly if you own alot of assets

Divorce Pros

  • If you are low income, there are FREE services available as well as pro-bono attorneys
  • If there are no assets involved, the process is quick, and relatively inexpensive
  • Representation in court if needed by a reliable and knowledgable bankruptcy attorney

Cons

  • Cost is extrememly high when a large amount of assets is involved
  • Process can be long if forms are not completed correctly or sent to the incorrect agencies or offices
  • Most lawyers charge by the hour for divorce cases ($300 and up)

My Bottom Line: Should You Use Legalzoom or an Attorney?

Legalzoom is not a site which specializes in legal representation. They provide a discounted legal service to individuals who want to create documents quickly, with limited hassle. They provide another option for those seeking quick fill-in forms and business startup documentation. Personally, if I were to draft a lease, file a fictitious name, or register an EIN number, this would be a great place to do it. If I started another business, besides the two restaurants I owned, I would use an attorney. Why?

According to the US Court system, and from my personal experience, corporations (S-Corp or C) and partnerships (LLC) are required to have an attorney to file particular cases. Individuals, however, can and may represent themselves in court. While individuals can appear in court without an attorney or "pro se," it is extremely difficult to do it successfully without the knowing the law. This applies to bankruptcy, trademarks, real estate, sole proprietorships, divorce, and on occasion last wills and testaments.

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