LegalZoom Review (Honest) – Is Legalzoom LLC Service The Best?
Ranked #8 On Our Best LLC Service List
People first. Unstoppable. Purpose-driven. And, simplicity.
Through these core values, LegalZoom, a company dedicated to democratizing law and improving people’s lives, was born.
Established in 2001, LegalZoom managed to provide online business formation and legal services to more than 2 million entrepreneurs in 2 decades. It has been the go-to of a number of now stable and leading businesses because of its solid foundation proven and tested through years of being in the business. Also, it has been a great option for small businesses that do not have in-house legal departments or lawyers, but in need of regular legal assistance.
However, the question of how good or how bad they are as a partner is always worth answering. The advantages and disadvantages of availing their services, their cost, and if they suit your needs are best realized prior to signing up to any of their plans. To help you out, we will unveil everything about LegalZoom – from their packages up to their pros and cons as well as their customers’ feedback and most frequently asked questions. Also, we will explore 2 alternatives for you to have options if ever you do not see yourself working with LegalZoom.
Sneak a Peek: LegalZoom Scored 6/10
Before that, we would like to introduce to you first the factors that we considered in reviewing LegalZoom and its offerings.
Main Review Points:
- Cost Efficiency
- Customer Service Quality
- Ease of Incorporation Process
- Service Speed
These review points are the highlights of this review for they will help you come up with the most appropriate decision and guide you in understanding why LegalZoom deserves 6/10.
Indeed, LegalZoom’s track record is undoubtedly one of a kind, however, its good qualities seem stuck on that point. Their prices, some of their services and the application process remain problematic which could be disappointing to clients especially to new breeds of entrepreneurs.
So far, we still find ZenBusiness and Northwest beating LegalZoom in terms of cost, package, and ease of the process. Currently, these are the best business formation services we found that are undoubtedly worth your penny.
Surely, you are curious about the other reasons behind the score that we gave to LegalZoom. To find out why and how we came up with it, please read through the following sections.
In-Depth Review of LegalZoom’s Features, Performance And Our Rating Of Their Service
Surely, you already have the basic answers to why and how we arrived with the score that we gave to LegalZoom. Thus, we know that you highly regard our reasons and all the details behind these. Below, using the features that most clients consider in choosing a business formation company, we evaluated LegalZoom to find out if it is really the right partner.
Cost Efficiency – 4/10
As previously mentioned, LegalZoom already has a strong foundation in the business formation industry. Its track record, millions of customers, and numerous customer reviews are all witnesses to its ups and downs. During this long journey, more and more business formation companies also grew, ready to challenge the ones considered as pillars of this industry.
However, LegalZoom seems not to learn from these and not threatened by this phenomenon as they keep on sticking to their too expensive plans and upsells which we find overwhelming and disappointing. Indeed, their add-ons are useful but their pricing is ridiculously expensive. So, we do not recommend signing up for any of these.
Reliability – 7/10
Since its inception in 2001, LegalZoom has served millions of consumers and has remained committed to providing quality services. While their primary concentration is not mainly on business formation services, they have assisted in the formation of over one million enterprises to date.
However, if you get back to everything we disclosed or if you check customer reviews on third-party sites, you will notice that the vast majority of them voiced dissatisfaction with their service speed, customer support, and fees, which caused them to fall behind their competition.
Customer Service – 6/10
LegalZoom offers both phone and email support. To test both contact methods, we reached out to them twice and realized that reaching out to them via phone is still the best option despite the many holds and lengthy wait time since it took them a week to answer the email we sent and only got a piece of advice to call their number instead. Meanwhile, the answers provided by their representative over the phone were detailed and really helpful. The person we spoke with seemed to know their business well. However, it is the point where the representative did a hard sell that is time consuming and aggravating. Truly it was an insightful and spontaneous conversation but it also went beyond the questions we asked.
Still, their phone support is excellent, but their online customer service badly needs improvement.
Ease of Process – 6/10
While it is not difficult to use, LegalZoom’s ordering process is effectively designed to provoke you to spend more money than you expected. Though each step was simple to follow, there are a number of pricy upsells that occur before even selecting a package. Instead of presenting you with the package options first and then leading you through the order process, you start by entering your personal information without knowing how much you are supposed to spend, which is annoying and inconvenient.
Yes, this order process differs them and makes them clever, but it does not benefit customers. It is more like luring customers into a trap than putting them in a secure and trustworthy environment. Well, they carefully explain each add-on that appears and why you might need it, however, it would be more tempting to see them after selecting a package so you can decide even before investing a lot of time and work.
Service Speed – 6/10
LegalZoom does not specifically explain their turnaround time, but they do offer an estimated total turnaround for each of their packages. With their most expensive package, you could receive your finalized business formation documents in 7-10 business days, but their cheaper packages take 30 business days or more.
In the end, it still depends on your patience and your budget. If you can afford their premium plan, then you will surely have in hand your documents in a week. But, if you cannot, then be ready to extend your utmost consideration and understanding.
Overall Rating: 6/10!
LegalZoom Plans, Features, Add-ons and Their Pricing
LegalZoom, like most other formation services, offers different plans that are tiered according to the number of services bundled in each package and according to your needs. These plans are namely: Economy, Standard, and Express Gold. Aside from these, they also offer optional business and legal services that you can add to your order to tailor it to your specific demands.
1. Economy Package ($79 + State Fees)
Overview: LegalZoom’s Economy Plan is the slowest and lowest LLC formation plan. Typically, they will dispatch all purchases within 30 business days, but there is not a guarantee as state processing times may cause large delays. It starts at $79 plus state fees, which might total $130 or more.
It is important to keep in mind that this package does not contain features such as an EIN (Employer Identification Number) or an Operating Agreement.
Perfect for: You who want the LLC formation essentials and do not have a deadline for your business registration as it may take 30 days or more before it arrives.
What’s included in the Economy package:
- Name Availability Check
- Business Filing
- Articles of Organization
- Lifetime Customer Support
- Financial Account Authorization Letter
- “Next Steps” Guide Access
2. Standard Package ($329 + State Fees)
Overview: Standard includes the essentials of the Economy package, plus a corporate kit. The major benefit of this package, however, is that your documents will be filed much more quickly than with the Economy package. This will, however, cost you $329 plus state fees.
Perfect for: You who want a quick LLC formation service and do not mind paying extra for this.
What’s included in the Standard package:
- Perks of Economy bundle plus…
- Personalized Binder
- Company Seal
- 20 Member Certificates
3. Express Gold Package ($349 + State Fees)
Overview: The Express Gold package is LegalZoom’s most expensive bundle, with a starting price of $349. The primary benefit of LegalZoom’s premium plan is faster order processing. LegalZoom Express Gold orders are processed before Standard and Economy orders. Orders for LegalZoom Express Gold are normally processed within 7-10 business days.
Express Gold’s usual shipping time for business papers is two business days. But, if you want it shipped the following day, then you can pay the extra cost. Aside from the said cost, for the state and federal agencies to process Express Gold orders faster, you will have to pay $50 to $100.
In short, if you want everything done quickly, get the Express Gold package and expect to pay around $400 plus state costs.
Perfect for: You who are willing to pay a huge premium in order to have your LLC formed as soon as possible. (Note: If you want to save money, you better choose a lower tier or a less expensive LLC formation company.)
What’s included in the Express Gold package:
- Perks of Standard bundle plus…
- Rush Processing
- Express Shipping
Optional Add-ons That LegalZoom Offers
Unlike other LLC creation firms, LegalZoom does not incorporate many features as part of their service packages. Based on the nature of your business, you can acquire the following items in addition to the package pricing for an additional cost.
- Registered Agent Service ($159 – $299)
LegalZoom will receive, scan, and deliver critical government documents to you in a timely manner for $159-299 per year. LegalZoom, as your registered agent, will also keep your privacy and confidentiality.
- Essential Documents (that include):
- Operating Agreement ($99)
An operating agreement defines how your company’s administration and finances will work. It is an essential document and there are free operating agreement forms available online that could save you from spending this much.
- Operating Agreement with Federal Tax ID Number (EIN) ($159)
Aside from an operating agreement, when you select this add-on, LegalZoom will obtain an EIN – a must have for all businesses as it allows you to recruit staff, pay taxes, open bank accounts, and more. However, you can obtain an EIN from the IRS for free upon request, thus this add-on is essentially not worth it.
- Operating Agreement, EIN, plus Permits and Licenses Acquisition Assistance ($199)
With this add-on, LegalZoom will not only process your operating agreement and EIN, but will also research and provide you with the applications for the permits and licenses required by your business to operate in a compliant manner.
Overall, these bundles/add-ons are pretty pricey for what you get. They are also strange because there is no option to avail EIN or license and permit research alone.
- Legal Assistance ($39.99)
LegalZoom will provide HR documents such as employment agreements, as well as attorney advice sessions and other services for $39.99 per month.
- Compliance Assistance ($280)
The total compliance package from LegalZoom includes annual report service, assistance with corporate recordkeeping, and guidance in keeping your personal and business assets separate. The annual fee for this service is $280.
Essential Documents (that include):
- Bylaws and Resolutions ($99)
When you avail this, bylaws and resolutions will be provided by LegalZoom. With these in hand, it would be a lot easier for you to run and manage your business without any problems. These will even make things go a lot faster in general.
- Bylaws/resolutions plus EIN ($159)
Aside from providing you with bylaws and resolutions, LegalZoom will obtain an EIN on your behalf for $159.
- Bylaws/resolutions, EIN, and business licenses ($249)
In addition to bylaws, resolutions, and EIN, LegalZoom will help you out in identifying and applying for the permits and licenses that will keep your business compliant and rolling for $249
- Tax Service (320)
You will be assisted in preparing and filing your state and federal business income tax returns by LegalZoom’s partner, Affordable Tax. They will provide all of these services plus expert guidance at a fee of $320 annually.
- Legal Assistance ($320)
This is just like the legal services add-on offered to LLCs, but instead of $480/year, corporations only pay $320/year.
- Compliance Assistance ($280)
Similar to the compliance assistance add-on for LLC, LegalZoom can handle your corporation’s yearly reports and provide you with their Minutes Manager Tool. This service costs $280 per year.
Pros and Cons of LegalZoom and Their Service
- Track Record: As stated earlier, LegalZoom has been operational since 2001 and has helped more than 2 million businesses in their formation and legal needs. Up to this time, LegalZoom remains as one of the entrepreneurs’ go-to in putting up LLC or corporations and in other legal business matters.
- Satisfaction Guarantee: As an assurance, LegalZoom offers “100% Satisfaction Guarantee or Your Money Back” to its clients. If you are dissatisfied with their service for any reason, you can request a refund within 60 days. If you terminate your subscription at any time, you are also entitled to a pro-rated refund.
- Customer Service: LegalZoom’s customer support could be reached via phone from Monday to Saturday and via email 24/7. Indeed, having multiple contact methods is good, however, it seems that they are not so much of a help. Based on the testimonials and reviews of their customers, their contact points are unsatisfactory because of the long holds and incomprehensive responses, as well as with how they respond about order status and delays which adds to their frustration
- Plan Pricing: While some competitors provide business formation services for as little as $0-$40 plus state filing fees, LegalZoom’s business formation pricing begins at $79 plus filing fees, with far too few services included in each of their packages. Even their add-on services are overpriced, which may be unfair to individuals on a tight budget.
Furthermore, some LegalZoom services are only appropriate for those who require long-term services. If you only need one-time assistance, it is preferable to look into other options.
- CUSTOMERS FEEDBACK: Generally, LegalZoom is a highly rated business formation service on online review sites.
LegalZoom has a Trustpilot rating of 4.2 stars and a ConsumerAffairs rating of 4.5 stars. It’s worth noting, though, that LegalZoom provides both personal and business legal services, thus these scores are impacted by both business owners and general consumers.
Let’s take a closer look at both favorable and negative LegalZoom reviews with that in mind.
LegalZoom Reviews From 3rd Party Sites
Trustpilot Positive Reviews (see their profile here):
Trustpilot Negative Reviews:
ConsumerAffairs Positive Reviews (see their profile here):
ConsumerAffairs Negative Reviews:
Is LegalZoom The Best Choice For Your New LLC?
With everything that we shared with you, maybe you already arrived with an answer to the question: Is LegalZoom best for you? Thus, we still prepared more reasons or instances for you to like or dislike LegalZoom. They may not be suited to every business’ needs but they still have features that could be just right for you if you consider the following:
When To Use Them?
- If you are looking for a reliable and high-quality LLC formation;
- If you will need a trust-worthy and tested business formation company;
- If you are willing to pay extra for better premium services and features;
- If you are not in a rush to form your LLC; and
- If you are willing to pay a considerable premium to expedite your order.
When Not To Use Them?
- If you need a registered agent services free with LLC formation for a much reasonable price;
- If your budget is lower than the price of their basic package;
- If you do not like dealing with pushy salespeople; and
- If you are seeking for the best priced LLC or incorporation service.
Best Alternatives and Substitutes for LegalZoom
With so many companies offering formation services, we understand that you are reading this review not just to gain a glimpse of LegalZoom, but also to learn about alternatives that may perform similarly to it at a lower cost. As promised, we looked for two other companies that you can consider working with and that will best match the needs of your business.
Alternative #1: ZenBusiness
LegalZoom has been in business for a lot longer than ZenBusiness and has helped millions of people start businesses. However, if you want the most affordable incorporation service available, try ZenBusiness. They have the industry’s most inexpensive costs, starting at $39, without reducing the level of service they deliver. Using their LLC services will save you at least $40. With its Pay-It-Forward campaign, ZenBusiness also pays back to support women and minority-owned small companies. With them, a full year of registered agent service is covered as well.
Alternative #2: IncFile
If you want a service that is entirely focused on business formation, you must choose IncFile. Their basic business formation plan is free, however, all business types must pay government filing fees. IncFile, like ZenBusiness, gives free registered agent service for your company’s first year. Furthermore, as compared to LegalZoom, IncFile receives superior internet reviews for customer support as well as for filing things correctly and on schedule.
In case you want to know more – here is the full review of Incfile.
LegalZoom is one of the most well-known and well-established online legal businesses. It was one of the first companies to offer online legal forms, and it has a lengthy history in the field which has been proven and tested.
Another asset of this company is their phone customer service which we consider outstanding. We did appreciate their patience in answering our questions and clarifying the procedure. Even though we realize that their ultimate purpose is to make a sale, this still won our favor.
However, we cannot endorse LegalZoom in good faith due to the vast amount of unfavorable LegalZoom reviews and unanswered concerns, as well as the lengthy application process, frequent upsells, and pricey packages which really turned us off.
In the end, we still highly recommend ZenBusiness and Incfile – business formation services that really put people first through being affordable, simple, and purpose-driven.
Is LegalZoom Legit?
Yes. To date, LegalZoom has served millions of customers with LLC services and other legal assistance since 2001. It is one of the industry’s oldest and most recognized businesses.
How Much is LegalZooms’s Registered Agent Service?
LegalZoom offers Registered Agent Service for $159-299 per year.
Which Package Should I Buy?
We believe that their Economy package is their greatest option, whether you’re incorporating an LLC or a corporation. Usually, we recommend that our you hire a registered agent, but because LegalZoom’s charge for this service is so high, it is definitely a better to hire someone else instead.
Will LegalZoom Help With Compliance Requirements?
Yes, definitely. However, they do not bundle it to any of their packages. If you want LegalZoom to serve as your registered agent, you will need to purchase this as an add-on for $159-299 per year extra. In terms of the annual report service, you will have to pay a more reasonable price point of $55.
What Is Their Refund Policy?
The satisfaction guarantee offered by LegalZoom is one of the most competitive in the industry. They will give you 60 days to consider your purchase and to check if it was worthwhile. If you find yourself requesting a refund, they will do so without questions asked, and there are no cancellation fees associated with the procedure.
How Quick Is The Overall LLC Creation Process?
Apart from the package you choose, this would depend on your state and how quickly it processes business filings. As stated in the earlier sections, their standard is 30 business days but, formation may take even longer if you file at the beginning or end of the year when the filing volume is typically heavier.
So should you consider LegalZoom as your LLC formation partner?
LegalZoom is truly a legendary LLC service, but in our honest opinion – it’s certainly not the best choice if you want to get the best bang for your buck.
There are many more less-known companies that will do just as good of a job if not better for a more attractive price.
Although, if you still want to stay with the best-known brand – you will probably be fine.