The Best Online Legal Services (Don’t Get Scammed)

[ad_1]

I’ve got bad news.

Most online legal services are a waste of time and money. We don’t use any of them ourselves. And we’ve tried a bunch over the years.

Almost all of them are trying to suck you into an annual subscription and then hope you forget about it.

There’s a few online services (LegalZoom, Bizee, and ZenBusiness) that can help guide you through forming your business. Even if you use them, it won’t save you any real time. And you should stick to their free plans. Make sure to read my breakdowns below, I don’t want you to get fleeced by any of them.

Otherwise, you can safely ignore the offerings in the entire online legal services category.

I do have some tips below on how to get real legal help when you need it.

My Experience With Attorneys and Legal Services

I’ve got plenty of first-hand experience with legal stuff on the business side:

  • Started multiple businesses, negotiating operating agreements for them across multiple partners.
  • Negotiated revenue and profit share agreements for multiple websites doing seven figures in annual revenue.
  • Deeply involved in Operations and HR for our company, as well as previous companies that I’ve managed departments for.
  • Gotten cease and desists with threats to sue. These are always a fun fire drill.

Am I a business attorney? Absolutely not. Don’t use me for legal guidance. But I do know how to work with legal as an entrepreneur.

Also, my long-term partner is an attorney.

Kind of an unfair advantage in this space. She went through law school, passed the bar, worked at multiple law firms, and is now an in-house attorney for Amazon.

So I’ve had a first-row seat to see how the legal industry works. Whenever I have a legal question or need a referral, I ask her. I’m sharing with you a lot of what she taught me.

The Best Online Legal Services For Starting a Business

A warning before we jump into the products: while online legal services that help start your business aren’t a total scam, they’re not 100% legit either.

The main reason to use one of these legal services is to have a helpful UI walk you through the process. That’s about it.

Here’s the reality of starting an LLC and registering your business:

  • Registering an LLC and getting an EIN aren’t that hard. Using a legal service won’t save you any real time.
  • Even if you use an online legal service, you still have to do the state registration stuff. I did a bunch of these when we were starting as we hired employees across the country. They’re usually a huge pain. And no software can automate all of it. At best, you’ll get some guidance on where to go. For us, we use our payroll software to help with this.
  • All these legal services have HORRIBLE upsells. Seriously, they’re preying on people that don’t know what’s going on. You don’t need a templated operating agreement and the other legal templates are dubious at best. I’d also be very skeptical of their “consultations” and phone support. Beyond the most basic questions, I wouldn’t expect them to be very helpful.
  • Even if you use them, make sure you avoid any sort of subscription fee. There’s absolutely no reason to be paying an ongoing subscription after your LLC is formed. If you see value in an initial package to help get you some guidance, go for it. But don’t get trapped paying anything after that.
  • All the online legal business products offer LLC and company registrations for $0. They do this because there’s no real value in what they’re offering. They just fill out some government forms for you. That’s why they make their money on dubious upsells.

Alright, let’s get into the products.

LegalZoom

LegalZoom is the #1 player in the space. Everyone knows them and we’ve all seen the ads.

While the pricing isn’t perfect, it’s not blatantly abusive:

LegalZoom pricing - Basic plan $0 plus state fees, Pro plan $249 plus state fees, Premium plan $299 plus state feesLegalZoom pricing - Basic plan $0 plus state fees, Pro plan $249 plus state fees, Premium plan $299 plus state fees

If you’re going to use them, I highly recommend that you stick with the free plan. The other plans aren’t providing anything of value:

  • The operating agreement is worthless. If you need a real one, every party needs real attorneys representing themselves. It’s a whole thing, LegalZoom can’t help with this.
  • You can easily get an EIN on your own, no value there.
  • Customizable templates aren’t a huge benefit. I don’t love legal templates that haven’t been reviewed by an attorney that I trust.
  • I don’t see any value in support. If I really need to talk to someone, I need an expert. Not a random person assigned to a customer support line. And I’m highly skeptical of the quality of their attorneys.
  • If you want esignatures, go get a real document tool like Docusign. It’ll scale much easier with your business.

So use them if you want some guidance on the steps you need to follow in order to form your LLC. But stick to the free plan. That’s the only plan that I’d even consider using myself.

Bizee

So their pricing is a bit buried on their site. Never a good sign.

Here it is:

Bizee pricing - Silver plan $0 plus state fee, Gold plan $199 plus state fee, Platinum plan $299 plus state feeBizee pricing - Silver plan $0 plus state fee, Gold plan $199 plus state fee, Platinum plan $299 plus state fee

Very comparable to all the other products in this space.

And plenty of worthless upsells. And not much value in any of their paid plans.

If you really want to use them, there’s no reason to use any of their plans except for their free plan. And make sure you reject all the upsells that try to hit you with.

ZenBusiness

We’ve used them ourselves. They’re… okay. Just like the rest. A free plan, worthless upsells, and not much in time savings.

Basically just a fancy checklist with your user account that guides you through the process.

And just like the rest, avoid their paid plans at all cost:

ZenBusiness pricing - Starter plan $0 plus state fees, Pro plan $199 plus state fees, Premium plan $349 plus state feesZenBusiness pricing - Starter plan $0 plus state fees, Pro plan $199 plus state fees, Premium plan $349 plus state fees

I really hate how ZenBusiness sucks you into subscriptions from the get-go. I bet there’s tons of small businesses that signed up for this, forget about it, and miss the $200 charge every year. Essentially paying for nothing.

And there’s no value in their upsells. If you need a website builder, go get a website builder. If you need a domain, use a domain registrar. Same with your document or esignature tool. Get actual tools in each space. The last thing I’d want to do is have to untangle all that stuff from ZenBusiness right as my business was taking off. They’re trying to grease the offer with nonsense, hoping that you fall for it.

Like the rest, if you’re going to use Zen Business, stick to the free plan. And reject any upsells that they throw at you along the way.

Which Online Legal Service Will I Use for My Next Business?

None of them.

My cofounder and I have started a ton of different businesses. We’ve used every method:

  • Doing everything ourselves.
  • Using an online legal service to register the business.
  • Having real attorneys do 100% of the work.

And the results have all been about the same. And there’s no time-saving benefits for spending more money in this space.

So next time, we’ll probably just do the whole thing on our own.

The main exception is if you’re starting a business with partners. In that case, get serious about the equity and operating agreement. You want a real attorney that specializes in business formation contracts. When we were starting our business, I got in touch with an attorney that was doing work for Peloton at the time. She represented me personally and we went through our operating agreement with a fine-tooth comb. My cofounder also had his own attorney to represent his interests. It was worth every penny for both of us.

Don’t skimp on your personal representation on an operating agreement. If there’s ever a serious dispute, everything will hinge on that single document.

Stay Away from Subscription Legal Platforms

There’s also a few legal platform companies that have cropped up with a seemingly amazing offer:

  • You pay a reasonable monthly fee. Like $20/month or something.
  • You get a direct line to legal advice.
  • Call whenever you like for whatever you like.
  • Tons of template legal forms for anything you could imagine.

Definitely sounds amazing.

Too bad it’s nonsense.

Look, even brand new legal associates, fresh out of law school, make $250/hr. Partners (who actually know what’s going on) will often make $500/hr and above. Legal platforms would have to use third-rate lawyers and then force them to churn through a conveyor belt of legal work. The math just doesn’t work for a service like this. I think they bank on a bunch of users forgetting that they’re subscribed.

Even if you were to use their “professional services” to hire an attorney, I would never use a platform like this to find someone. There’s a vast difference in quality from one attorney to the next. You do not want to be beholden to the attorneys on their service. The great attorneys work at prestigious law firms because the whole industry is extremely hierarchical. Anyone working through a platform like this, it’s a red flag. I know that’s harsh but it’s how the legal industry works.

I’ve worked with a lot of attorneys from top-tier law firms, even they make mistakes. I can’t imagine how shoddy the work would be from a platform like this.

I’m all for cutting corners to get a business off the ground. But skimping on legal advice isn’t the place to do it.

Legal Directories Are Completely Worthless

I know that trying to find a good attorney is ridiculously painful.

Unfortunately, online legal directories don’t solve the problem.

They won’t help you filter between the good and the bad attorneys. The whole industry operates on word of mouth and referrals. I even found a directory that was trying to sell people on an annual subscription. I’d laugh if it didn’t make me so angry. Completely worthless.

So avoid all the online legal directories.

How to Find Legal Help When You Need It

The main way to find a good attorney is through a referral. Especially from another attorney you already trust. If you found an estate attorney you like while you put your will together, ask them for small business attorney recommendations. Also ask your CPA if you trust them.

Also ask any other entrepreneurs that you know in your city. If you don’t know anyone, go to a few entrepreneur events and ask around.

I know this takes time and is a pain, I hate doing this stuff too. But it’s the only way to find a good attorney.

Once you find one good attorney, you can usually get a referral to another attorney for any specialty you need. Since lawyers need to pass the bar in their state (there’s a few exceptions but this is mostly true), most of them work in a major city in the same state that they went to law school. So they all know each other. And competent attorneys quickly recognize other competent attorneys. You only need to find one from scratch.

Luckily, I can just ask my partner if she knows anyone. It’s a huge cheat code for navigating the legal world.

I recommend that you look for a boutique firm specializing in small businesses in your city. And if you’re in a highly regulated industry like healthcare or finance, get a firm that specializes in that space. As a new business, you’ll never get a high powered attorney from a major firm to even respond to your emails. A bunch ignored me when I was getting started. It’s not their fault, a brand new business just can’t give them enough work for them to be interested.

A boutique firm will take your call. And they’ll be small enough to take your work seriously.

The Inherent Problem with a Nationwide Online Legal Service

The legal landscape in the United States is crazy complicated. Not only does a competent attorney have to keep track of federal law, they also need to watch the state, city, and county regulations. Even managing all this for a set of clients in a single city is an immense challenge. Sometimes the laws conflict, they’re always changing, and new regulations can be quite vague before all the details get sorted out.

Now take that complexity and multiply it by 50 states, the 19,495 cities and towns, and 3,143 counties. It’s… a lot.

We run a remote company and have employees that live across the US. Just keeping track of employment laws, business registrations, and tax requirements is a nightmare for our business. At times, it’s been a challenge just to find someone that truly knows how different parts of the Washington business taxes work.

What all this means is legal services are inherently local. If you want legal work done right, you need someone that understands the legal requirements of where you live or do business. Expecting anyone to magically know how everything works across the country at all times, not going to happen.

So an “online legal service” is kind of a misnomer. Outside of LLC and new business filings, it’s not really a thing.

Yes, major corporations do hire nationwide or international law firms to handle everything. They pay them an absurd amount of money to throw an army of recent law grads at the problem, figuring it all out on the fly. They solve the problem with bodies and gobs of money.

Most of us can’t pay multi-million dollar legal retainers.

Even something as simple as basic estate planning, you’ll still want to find a local attorney. They’ll have templates and then can customize them based on your circumstances. Also, you’ll know that the forms are updated for all local regulations when they’re created. That’s the key.

[ad_2]

Leave a Comment