Lawyers are not known for brevity, but LegalZoom can be summed up in two words: It sucks.
LegalZoom purports to help its unwitting customers avoid paying for lawyers by allowing users to prepare their own documents. While LegalZoom clearly warns that it is not offering legal services, it creates the misconception that for important matters like wills and incorporations attorneys aren’t necessary. Per LegalZoom, a client doesn’t need estate planning, it simply needs a will, which LegalZoom reduces to a glorified MadLib. Granted, a testamentary document replete with mentions of sexual organs, dirty words, and excretory references will probably lighten the mood at the reading. It’s also highly inappropriate, and not just because the decedent should not be allowed to bequeath his testicles to Aunt Betty.
For new businesses, LegalZoom treats incorporating not as a tool for owners but as an end itself. There’s no lawyer to explain why one might want a corporation or what entity ownership entails. Because new entrepreneurs often confuse the act of incorporating with the process of starting a business (unaware that the former is merely one small step in the latter), they generally don’t recognize and can’t use the entity as a tool for mitigating risks. By suggesting that a lawyer isn’t necessary to start a business, LegalZoom reinforces the misconception that incorporating by itself is enough.
In sum, LegalZoom encourages people to think of attorneys as glorified meter maids: Functionaries whose sole job is to complete paperwork that needlessly costs money. It feeds off the notion that all attorneys are nitpicky, word-twisting, morally compromised, overdressed, bottom-feeding sleazewads who defend killers like O.J. Simpson (which is ironic considering that ‘Dream Team’ alumnus Robert Shapiro is one of its founders). LegalZoom is to legal services what McDonald’s is to cuisine. Both are inexpensive and quickly satisfy a perceived need. They also do tremendous damage that often goes unseen until it’s way too late. If you eat enough fast food, you start to look like Grimace, the obnoxious, eggplant-shaped, morbidly obese purple blob that used to appear in McDonald’s commercials until he died either of a massive coronary or an allergic reaction to whatever it is in McDonald’s French fries that preserves them like petrified wood. LegalZoom erroneously suggests that the value in legal services is in the documents themselves. They provide their business customers with pages of useless garbage that look nice and official sitting on a bookshelf. However, if you get into an argument with a cofounder, have a dispute with a vendor, are trying to raise investment capital, or need something other than a pretty binder with a bunch of printed pages, you almost never have the resources required to proceed. Like a McDonald’s customer who gobbled down one too many Big Macs, someone must open everything up to clean the mess, and it’s expensive, time-consuming, unpleasant, completely unnecessary if you’d just gotten something better in the first place . . . and known to cause explosive diarrhea.
The value in legal services is in the advice and guidance that an attorney provides. The documents are almost an afterthought; they only codify the decisions clients have made in conjunction with counsel. Provided properly, business lawyers are a value-added service. Whether by protecting a company from lawsuits and regulatory actions, prescribing an easy remedy for ownership disputes, or just letting a founder sleep better at night knowing that his investment is protected to the extent possible, good counsel is not just a cost of doing business. LegalZoom is . . . and it is often a steep price to pay.