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Are online legal services a good idea?

Are Online “Legal Services” Like LegalZoom a Good Idea?

The internet offers a vast array of services that are supposed to make life easier. You can buy and swap household items, chat with people across the globe, or even create an important legal contract – all from the comfort of your home. Websites like LegalZoom or Rocket Lawyer advertise the ability to create a basic contract, will, employment agreement, or even complete a divorce right from your computer – all while skipping the usual step of hiring an attorney. But is using one of these services actually a good idea? 

The appeal of using one of these online services is obvious. The prospect of hiring an experienced attorney with expertise in civil or business law sounds expensive and your resources may be limited. Filling out a contract from home sounds so easy. Why not try it out? But the truth is, executing these types of contracts yourself is usually not the best choice. 

Most of the problems with online legal services – ones that a contract attorney could have helped you avoid – won’t be apparent until it’s too late. Here are the pros and cons of these sometimes risky services.

Online Business Contracts Look Good…at First

On one of the many online “legal services” sites like LegalZoom, you can download a civil or business contract and complete it yourself directly on a template for less than most people would expect to pay a local attorney. That part is simple and, not surprisingly, the supposed cost-saving is usually the top reason people decide to use these services in the first place.

Unfortunately, however, just like with most things in life – you get what you pay for. While the upfront cost of using a stock template or cheap online “legal service” seems low, the real price usually comes later down the line when that contract or agreement is put to the test. Sadly, most people discover this reality the hard way. They create a contract online, using a boilerplate template that isn’t tailored to there individual or business needs, isn’t jurisdiction-specific, and is usually lacking in the important provisions or terms. When a dispute arises (as they inevitably do), these same individuals wish they had consulted with an attorney beforehand. That is because using an online service or template usually misses things that an experienced attorney would have been sure to include.

Its important to realize – online templates and legal services are created in a very generic and broad way, so as to be applicable to a wide variety of clients. That usually means they contain only the bear minimum to look good, without containing real substance.

Most of the online “legal service” website admit these facts in the one place most users don’t look – the fine print. If you take a look at their terms & conditions, you’ll invariably find a statement similar to this one: “We are not a law firm or a substitute for an attorney or law firm. Use of our products and services are governed by our Terms of Use and Privacy Policy.”  LegalZoom states that it “is not a law firm and may not perform services performed by an attorney. LegalZoom, its Services, and its forms or templates are not a substitute for the advice or services of an attorney.” Rocket Lawyer says that its information, software, products and services “may include inaccuracies” and that “information and opinions received via the website should not be relied upon for personal, medical, legal or financial decisions.” 

Your Needs Go Beyond the Contract Itself

One business owner who hired our firm discovered the drawbacks of these online contract services when he used LegalZoom to set up an S-Corporation in December 2019. After numerous unexplained delays and promises from LegalZoom, he finally received the company’s incorporation documents in May 2020, only to discover that the company had actually been registered since December after all. But by that time, it was too late – the IRS considered his business in default because he had missed federal filing deadlines by several months. The client had to hire our firm to unravel the mess and ended up paying far more than he anticipated when he initially signed up for the online service.

The lesson? Keep your eyes on the big picture, not just on the contract in front of you. Business coaches often tell clients to begin at the end and work backwards to achieve their goals. Drafting a contract, business agreement, employment document, or any other contract is no different: you must first think about the outcome you want to achieve. The form you use is secondary to accomplishing your goals and if your contract is challenged in court, adequate protection usually requires legal advice from an attorney. 

Wondering where to start? If you’re considering using a site like LegalZoom, start by reading all the Terms of Use and Privacy Policies first. Then call an attorney for input and make an informed decision about the best course of action. You will find that the cost of hiring an attorney is probably not much more and will provide you with much greater peace of mind, not to mention protection, when the time comes to actually enforce or defend the agreement.

What Should You Do Next?

If you are interested in learning more or speaking with an attorney at Capital Partners Law, there are plenty of ways to get in touch:

This article is for informational purposes only. It does not create an attorney-client relationship with any reader nor should it be construed as legal advice. If you need legal advice, please contact our firm.