LegalZoom Or A Lawyer: The Limits of Legal Technology

November 5, 20222

Are you one of those torn between LegalZoom or a lawyer? Then you are not alone.

Many people do not know when to use LegalZoom or a lawyer. Knowing when to engage the services of online technology companies like LegalZoom and when to hire the services of a lawyer can save you money and keep you out of trouble.

LegalZoom is an online legal technology company that provides legal services to customers by helping them create legal documents without a lawyer. Legal documents and forms are some things used to convince a judge in court.

Most people who use LegalZoom and other online legal forms do not have lawyers or cannot immediately access a lawyer.

The emergence of LegalZoom and other legal technology companies sent shockwaves throughout the legal system, as many lawyers regarded them as a disruption to traditional legal services.

Founded by Brian S. Lee, Brian Liu, Edward Hartman, and Robert Shapiro, LegalZoom has acquired and formed partnerships with other legal services firms outside the United States.

Transactions you can do on LegalZoom

  • Formation of companies.
  • Apply for licenses
  • Apply for a Tax ID
  • Access to Legal forms like:
  1. Wills, 
  2. Power of attorney, 
  3. Estate planning documents, 
  4. Trademarks, 
  5. Copyrights, 
  6. Patents.
  • Agency service
  • Business Advisory Plan

The emergence of legal technology companies, like LegalZoom, has made some people wonder if one needs an attorney or lawyer when one can get them online.

Reasons People Use LegalZoom

Below are some reasons people use LegalZoom and other online technology companies instead of hiring the services of a lawyer.

LegalZoom is Fast

One great advantage of using LegalZoom is that users can generate their legal documents in record time by providing the required information. There is no scheduling of appointments and other bottlenecks associated with hiring a lawyer.

LegalZoom is Cheap

Below are some reasons many people go to tech companies like LegalZoom for their legal services.

Another reason people prefer using LegalZoom is the high cost of consulting or hiring a lawyer. In LegalZoom, you determine and pay for the type of service or product you want.

LegalZoom is Easily Available

The internet and legal technology companies like LegalZoom have made it possible for people anywhere in the world to access legal documents from anywhere they are. People do not need to travel long distances to consult a lawyer to draft documents for them.

Is LegalZoom Legal?

The emergence of LegalZoom has not been without its controversies. There were some early concerns that LegalZoom, without the authority to practice law, was engaging in law practice by giving legal advice to its customers. Many states took legal action to stop LegalZoom from offering legal services to the public. Most of these cases against LegalZoom, however, have either been settled or dismissed.

In one such case, the North Carolina State Bar issued a cease and desist notice to LegalZoom in 2008. The case went to court, which appointed a special referee to investigate the matter. After the investigation, the court determined that LegalZoom was not engaged in the unauthorized practice of law. LegalZoom and the North Carolina State Bar eventually settled the matter out of court in 2015.

LegalZoom or a Lawyer: Which is Cheaper?

There is a general perception that LegalZoom charges its customers a fraction of what lawyers charge for their services. This is true especially when the business transaction is simple.

But a report published in Consumer Reports magazine revealed that LegalZoom and some of its competitors charged more than what you would pay a lawyer.

LegalZoom is not a Substitute for a Lawyer.

One thing in life is that circumstances differ and no two situations are exactly the same. LegalZoom and other online form providers do not advise clients on what they should include in their forms according to their circumstances.

At best, LegalZoom provides general legal information on legal issues based on answers provided by their customers.

Online Legal Forms Need Customization

Online legal forms often need to be customized to fit a particular circumstance. Unfortunately, online legal form providers do not offer this service. Only an attorney can assess a given situation and fill out your legal forms accordingly.

Many people have inadvertently omitted important facts or included unnecessary provisions in their online legal documents.

Legal Forms are Complex

Some online legal documents contain complex provisions that people with little or no legal knowledge find hard to comprehend.

Unless you know what you are doing, it is not advisable to create an online and bind yourself to an unwanted legal obligation. You need more than just online legal documents to protect yourself, your business, and your family from financial ruin.

Using Online Legal Forms is Too Risky for Important Transactions

While LegalZoom and other technology companies help people with simple legal services, it is too much of a risk to rely on them for important transactions. According to statistics, most people who fill out forms online do so incorrectly, with devastating consequences.

You can use legal documents from LegalZoom when engaging in small transactions where you have little or nothing to lose. However, according to some experts, people should avoid using online legal forms in important transactions when the stakes are high. You do not want to risk your investments because of errors in your legal documents.

Online Legal Form Providers do not Follow Up on their Customers

Unlike tech companies, lawyers do much more than just draft legal documents. A lawyer is always in the best position to listen to your particular situation and advise you accordingly.

Also, your legal obligation does not end with filing a legal document. Unfortunately, most people are left on their own after patronizing an online legal service company. Although LegalZoom can refer their customers who need further legal assistance to lawyers, this comes at an extra cost.

Legal Forms Change

A recent report by The National Law Review stressed that ‘the form is always wrong’. According to the report:

Legal forms are merely starting points and most forms are typically only half an inch deep. A successful enterprise truly needs so much more depth than what is provided in a basic form.

Laws, rules, and regulations constantly change. These changes also affect legal documents, which need to reflect those changes. Some experts believe that online legal service providers cannot keep up with changes in the business sector.

Again, laws are not the same in all states, and a legal form used in one state may be inapplicable in another. 

There is no Fiduciary Relationship Between LegalZoom and Its Customers

Some legal experts have pointed out that although LegalZoom and others sometimes provide an alternative to lawyers, the company does not create a fiduciary relationship with its clients. 

Final Thoughts on LegalZoom or a Lawyer

LegalZoom has revolutionized the legal services sector by simplifying legal processes associated with business formation, copyright registrations, tax filings, registered agent services, wills, and trusts.

However, in using these online legal forms, people should understand their limits and know when to consult a real attorney for their legal problems.


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