Most business owners need professional legal services at some point, and many entrepreneurs are curious about their online options. After all, websites such as LegalZoom and Rocket Lawyer are much less expensive for basic legal services, like filing for an LLC, than traditional lawyers in law firms. While lower prices are enticing, the decision to use an online legal filing service rather than an attorney in a law firm is a big one, since the implication of improperly filed contracts can be severe for the business owner.
This guide isn't intended to condemn or recommend online legal services or law firms for specific business uses, but rather to illuminate the differences between these legal options so business owners like you can make an informed decision.
Types of online legal services
The major players in the online legal services field are LegalZoom, Rocket Lawyer, LegalShield, LawDepot and a few others. You've likely seen advertisements for websites like these on television where they explain that, in minutes, you can be discussing your legal needs with a qualified attorney. When you peruse these websites, you'll see that they offer business-centric legal services, such as LLC filing, copyright registration and patent filing.
Most online legal services currently operate on either a subscription basis, where the client pays a certain amount per month in exchange for an outlined list of services, or a pay-per service basis, where the client purchases one-time legal services.
Online legal services
Online legal services are inexpensive relative to what typical brick-and-mortar law firms charge, which makes most small business owners immediately wonder why and how these sites can charge so much less than other attorneys. The answer is simple: They aren't law firms. When you look at the disclaimers on websites such as Legal Zoom, you'll see it plainly written in black and white:
"LegalZoom is not a law firm, and the employees of LegalZoom are not acting as your attorney. LegalZoom's legal document service is not a substitute for the advice of an attorney. LegalZoom cannot provide legal advice and can only provide self-help services at your specific direction. LegalZoom is not permitted to engage in the practice of law. It is prohibited from providing any kind of advice, explanation, opinion or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies."
Now, none of this is to say you shouldn't use such services as LegalZoom, only that you should understand what they're really offering.
LegalZoom and those like it are legitimate operations, but when you hire them, you aren't getting a client-attorney relationship. And you are not, as many people assume, hiring a remote law firm to advise your business and act as your legal counsel. Rather, LegalZoom and other services like it are legal portals that act as a resource for people who want to prepare their own legal documents.
In other words, these types of online legal services are not so different from the aisle in an office supply store that stocks things like renter's agreements or generic pre-prepared contracts; it's just that the online legal destinations provide guidance in the form of customer service, more specialty filing templates and a nicer interface.
If you want the benefit of having a law firm or attorney file things on your behalf, and you need individualized business guidance in a legal and strategic sense, an online legal service provider will not suit your needs. Even the most successful online legal service companies state in their disclaimers that some information (including forms) on their sites may be outdated and that they cannot be held responsible for improperly filed forms.
On the other hand, a small business owner who is highly knowledgeable about the law and confident in their ability to file legal documents may find online legal services helpful. The lower cost of services, compared to full-service law firms, and the limited guidance online services provide may well suit the needs of such an entrepreneur.
If you want more information on finding a lawyer to represent your business, check out our guide here.