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Paying an attorney an hourly fee or retainer can be very costly — and for many small-business owners, that expense may be prohibitive. That’s where LegalZoom and LegalShield come in. These online legal services can help entrepreneurs start a business and maintain it successfully in compliance with the law.
If you're considering online legal services, this review provides a comprehensive comparison of LegalZoom and LegalShield, so you can decide which might be a better choice for your small business.
Both LegalShield and LegalZoom offer pretty much everything you’ll need (from a legal perspective) to form your business — and then run your business for years to come.
Here are some features you can expect from LegalZoom, for both business formation and normal business operations:
Formation services for Limited Liability Company (LLC), corporation, nonprofit, sole proprietorship.
Employer identification number (EIN).
Tax, license and permit services.
Business naming services.
Bill of sale.
Independent contractor agreement.
Similar to LegalZoom, LegalShield offers services for starting a business as well as continuing to run that business all while remaining compliant with local and federal laws. Here is a breakdown of LegalShield’s services:
Unlimited phone consultation with your attorney.
Document and contract review.
Letters and calls on your behalf.
Debt collection services.
Business formation services.
Registered agent service.
While there’s plenty of overlap in features, the pricing of LegalZoom vs. LegalShield is very different. Each service provided by LegalZoom comes with its own package options and pricing. You can also price things on an individual basis, like if you needed specific documents but not the full services of incorporating. On the other hand, with LegalShield, plans are organized by the number of employees a business has. This could work in favor of some businesses, but it could be a downside for others.
For example, to get an EIN, prices start at $79. Certified copies of documents like DBA filings, annual reports or dissolutions, start at $45. To form an LLC with LegalZoom, this is how the pricing breaks down:
$79 + state filing fee
$329 + state filing fee
Everything included in Economy, plus:
$349 + state filing fee
Everything included in Economy and Standard, plus:
If you know the documents you need outside of a business formation package, finding the pricing will be simple — but if you’re unsure, it might take some searching around. If you’re looking for attorney advice, there are two options: the Business Advisory Plan (starting at $31.25 per month) and the Legal Advantage Plus (starting at $9.99 per month).
If you’re looking for LegalShield's normal small-business plans, these are the package options you have to choose from:
10 employees or fewer
$39 per month
50 employees or fewer
$89 per month
Everything above, except:
100 employees or fewer
$149 per month
Everything in the two above packages, except:
While all of the plans offer document review and feedback, if you need your attorney to actually draft a document for you, there are two options: You could download a free template, fill it in and then have your attorney review it or your attorney could draft it from scratch — and that’s where the 25% off hourly rate comes in, as you would receive that discount on your attorney’s hourly rate to draft a document from scratch.
LegalShield also has a program to help you form your business called Launch, and that comes with a different price. For $145 plus state filing fees, you will be connected with a local business attorney who will help you find the right business entity to form, complete all the related paperwork and file it for you. In addition to that, you'll receive legal support for three months after your business is formed.
Pros and cons
LegalZoom and LegalShield have about the same number of pros as they do cons, but determining which are your non-negotiables will help you decide which is better for your business.
No monthly membership to be locked into.
You will get a copy of any documents that have been filed on your behalf.
Individual pricing benefits small businesses that don’t need full service legal help.
Attorney plans available for those who need more advice.
No downloads or edits of any documents.
Access to attorneys isn’t free and doesn’t come with any other package options.
Customer service gets very mixed reviews.
Have to know what documents or services you need in order to find pricing.
Access to your attorney on an unlimited basis.
Pricing based on number of employees.
Everything you need to form your business.
Member perks, like discounts at stores including Target and Verizon and hotels like the Holiday Inn.
Attorney satisfaction will vary depending on the law firm you are assigned.
Canceling membership can be tricky.
Only 39 associated law firms throughout the U.S. and Canada, so finding one in your state might not be possible or your options will be limited.
It’s fair to say customer reviews are one of the first things people search for when trying to decide if they should go with a particular company, product or service.
Taking individual experience, mood and state of mind into consideration, the most common complaints seem to be about hidden charges, LegalZoom not making it clear what is an add-on that can be opted out of and customer service. Many people noted that they were still being charged for services they hadn’t received, or that had been canceled.
When it comes to customer service, many reviewers noted long wait times or it being impossible to get in touch with anyone at all, and when they did they were met with less than ideal assistance.
However, it’s not all bad. Those with positive experiences with LegalZoom said that they were able to have their legal questions answered quickly and for much less than they would have spent if they went with a law firm. The ample options available to customers is also a huge plus. Customers were able to complete any and all documents needed for their business without having to deal with multiple different companies.
Out of all the LegalShield reviews, the negative ones seemed to have one common theme; those who were customers when it was called PrePaid Legal are not satisfied with what the company has become. They note the lawyers are of lower quality, getting in touch with customer service is tricky and people have experienced being charged for services even after notifying the company of cancellation.
Since the company continues to operate as an MLM (multi-level marketing) business, LegalShield as an overarching company doesn’t have full control over the attorneys offered and the way certain things are handled, so this may be an explanation for the varying degree of reviews.
Those who reviewed the business services were pleased with the sound advice and results they received from attorneys. Overall, those who have left positive reviews appreciate the knowledge and attentiveness of attorneys and just how much cheaper LegalShield’s services are compared to hiring an outside attorney.
A version of this article was first published on Fundera, a subsidiary of NerdWallet