LegalZoom Reviews and Analysis: 2020 Edition

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Is LegalZoom good for starting a business? Or are there better alternatives out there?

In our LegalZoom review, we will cover everything you need to know before deciding on whether to use their services to form your LLC.

LegalZoom

Editorial Rating

Strengths

  • Affordable LLC filing
  • A 60-day satisfaction guarantee
  • LLC guide
  • Vetted attorneys

Weaknesses

  • Poor customer support
  • Expensive add-on services

LegalZoom Breakdown

Price starts at

$79 + state fees

Processing time

30 business days (Economy plan)

Registered agent

$249/year

Operating agreement

Yes

EIN registration

Depends on the package

Annual compliance

10 free + $280/year

Advistory service

Unlimited legal and accounting consultations

Web domain & hosting

No

What Is LegalZoom Best for?

LegalZoom is a company that offers online legal services. It was founded in 2001 and has since helped more than 2 million entrepreneurs to open an LLC.

LegalZoom reviews are a mixed bag: some customers are happy with the service they got, while others felt they got ripped off. But are the negative LegalZoom ratings justified?

Services

The following are the LLC services offered by LegalZoom, whether they are included in an LLC package or an add-on service.

LegalZoom will check if the business name you want is available in your state. This service is included in their LLC packages.

LLC Filing

LegalZoom will review and complete all your paperwork, before filing it with your state.

Comprehensive LLC Welcome Packet

This service includes:

  • Articles of Organization
  • A financial account authorization letter
  • A step-by-step checklist for after your LLC is formed

Lifetime Customer Support

Lifetime customer support is included in all LLC formation packages: the support team is available 7 days per week to answer all of your business related questions.

Operating Agreement and an Employer Identification Number

These two come as a package add-on and cost $99.

Registered Agent Service

The LegalZoom LLC fees of the RA service are costlier when compared to competitors. When creating your LLC through their website you have the option to add this service. If you click on this service during checkout, you will get a notification stating that once your documents are submitted to the state you will be charged $249.

Plans & Pricing

You can choose one of the three LegalZoom LLC packages:

  • Economy $79 + filing fee (30 business days)
  • Standard $329 + filing fee (15 business days)
  • Express Gold $349 +  filing fee (10 business days)

The following are the LegalZoom prices for additional services:

  • Legal Zoom registered agent: $299 for the first year + renews annually
  • Operating agreement: $99
  • Operating agreement plus EIN: $159
  • Operating agreement, EIN, and licenses: $199
  • Smart employer: The first 10 days are free — once the trial period is over, pay only $39.99/month
  • Total compliance: This service is offered for 10 days with your LLC order, then it continues automatically at $280/year

With all the additional services you purchase, the total Legalzoom LLC cost increases. Most of the services are optional, meaning you don’t need to purchase them from LegalZoom.

You, however, would need to have a look at the state-specific requirements to see which extra services you might need.

We also recommend checking if your state has the option for rush filing. The LegalZoom LLC pricing model is a bit confusing: they offer rush filing for an extra cost. If this isn’t offered in your state, however, you are basically paying them to prioritize your order over their other orders.

In one LegalZoom review, a customer complained that they paid for the express package and still had to wait a long time before their LLC was formed.

Support

The Legal Zoom customer service team can be reached via the contact form on their website or on the LegalZoom number. 

The LegalZoom customer service hours are the following:

  • Monday to Friday, from 7 am to 5 pm PT
  • Saturday and Sunday, from 7 am to 4 pm PT

A good number of negative LegalZoom reviews suggest that customer support isn’t one of the firm’s strong suits. The sales team is easier to reach than the support team, and the waiting time for a support agent is upwards of one hour.

Ease of Use

Using LegalZoom’s website to create your own LLC is a bit tricky. For starters, LegalZoom tries to upsell online formation services each step of the way.

Essential documents, total compliance, operating agreement + EIN, etc. We recommend against clicking next without reading carefully what you agree to pay. You may end up having to pay more than $1,000.

Another issue is the fact that when using LegalZoom for LLC formation, the company is your registered agent by default. This service costs $299 per year. When you are at the checkout page, the price isn’t listed, so customers assume they are getting a free service included in the package. You would need to manually edit the item and nominate your own agent. As mentioned in one LegalZoom review, this fee is subject to change. Each year you may end up paying more for this service. To cancel it, you would first need to change your registered agent with the state. Understandably, customers were upset by this practice and many business owners claimed that LegalZoom scams their customers by doing this.

LegalZoom Reviews

LegalZoom has a profile with the Better Business Bureau which has been accredited since 2001. They have an A+ BBB rating. The company has a 1.5-star average rating, based on 306 LegalZoom reviews on the BBB.

There are 106 LegalZoom reviews on Trustpilot, giving the company an average rating of 2 stars.

LegalZoom is an accredited partner of Consumer Affairs.  The 486 reviews of LegalZoom give the company an average rating of 3.5 stars.

Sitejabber gives LegalZoom a confidence score of 10 out of 10. Based on 978 LegalZoom reviews, customers gave the company an average rating of 4.07 stars.

The main issues customers complained about in their LegalZoom LLC reviews are:

  • Customer support
  • Renewal of the registered agent service

Getting in touch with a customer service representative seems to be a hard endeavor. In almost all LegalZoom complaints, customers stated that they were on hold for more than an hour when they needed help.

Another one of the problems with LegalZoom is that they charge for services that are cheaper or free elsewhere.

For example, getting an operating agreement + EIN costs $159. However, you can get your federal tax ID number from the IRS for free in less than 15 minutes. So, there’s no need to pay those additional $59.

Lastly, in a LegalZoom review on Reddit, a customer was also complaining about this service and mentioned that a lawyer can serve as your registered agent for a fraction of the price. And a good lawyer is more likely to provide the best registered agent service you can find.

Our Verdict

While the customer support team is criticized in most of the LegalZoom reviews from 2020, the company has a lot of experience and more than a million customers. Their LLC package also contains some beneficial services, such as tax consultation. They also include a guide on what to do once your LLC is formed.

If you believe that these services will be useful for your business, then LegalZoom may be the best incorporation service for you.

LegalZoom Alternatives

As part of our LegalZoom LLC review, we considered the main LegalZoom competitors.

LegalZoom vs Rocket Lawyer

Rocket Lawyer offers similar LLC filing services. The main differences between these companies are the pricing models and the satisfaction level of customers.

The one-time LLC formation package by Rocket Lawyer costs $99.99. However, they offer a monthly membership which costs $39.99 and the first business incorporation is free for members.

Rocket Lawyer reviews are also mostly positive. The site has a minimum of 4 stars on the most popular review sites.

To find out if this is a good LegalZoom alternative, check out our Rocket Lawyer review.

LegalZoom vs ZenBusiness 

ZenBusiness has a higher rating on Trustpilot and more satisfied customers, compared with the Legal Zoom reviews for LLC formation on the same site.

Besides having numerous customers say that this is the best LLC website, ZenBusiness also offers lower prices. Their starter package costs only $49 per year.

To find out which is the best LLC service for you, have a side-by-side look at our ZenBusiness review and LegalZoom review.

Wrap Up

And to sum up: the main advantage of this company is that the team will help you start your business at an affordable cost while discussing your best options for your individual situation. While a lot of LegalZoom reviews highlight problems, mostly with customer support, ultimately, the service is good value for money.

LegalZoom

Editorial Rating

FAQ

What is LegalZoom?

LegalZoom is an online legal company that offers business formation services, as well as the creation of legal documents (will and testaments, etc).

Is LegalZoom legit?

Yes, LegalZoom is a legitimate company, founded in 2001 and headquartered in California.

How much does LegalZoom cost?

The LLC packages start at $79, excluding the state fees.

Is LegalZoom worth it for LLC filing?

While LegalZoom is an affordable option, they do not offer the cheapest LLC registration. At $49 per year, the starter package offered by ZenBusiness is cheaper than LegalZoom.

Can you get a refund from LegalZoom?

LegalZoom has a satisfaction guarantee. You can request a refund within 60 days of purchase. As stated in the LegalZoom refund policy, they cannot refund filing fees, taxes, or money paid to third parties (attorneys affiliated with their legal plans).

Is LegalZoom good?

There are both positive and negative LegalZoom reviews online. So, all in all, they are affordable if you decide to skip the extra pricier services.