Legal professionals cannot be duplicated by a form. Laws are complex and navigating them competently involves some of the most intense education of any profession. Although LegalZoom may seem enticing when considering options for entity formation, it is not a good long-term choice for a business. Here are five reasons why services such as LegalZoom will not save a business money:
1. Little to No Value
Every investment is fundamentally a question of value. LegalZoom is not permitted to give legal advice, it cannot adjust documents to customer’s answers, and it cannot alter documents based on a customer’s unique situation. LegalZoom takes what any person could do on their own and charges people for it. It is a “Do It Yourself” package that has been marketed as having some sort of professional legitimacy. This marketing is deceptive. LegalZoom is not an attorney. Accordingly, LegalZoom’s claim that businesses can save on the cost of an attorney is deceptive. LegalZoom’s services and resulting products are not comparable to those of an attorney and the costs of having legal documents that fail to protect a business are incalculable.
2. Harder to Enforce in Court
The purpose of legal documentation is to (1) ensure compliance with the law and (2) reach a point of mutual understanding with other parties. LegalZoom fails in both aspects. In fact, some generic forms may not even be enforceable in court. If an owner uses LegalZoom or writes their own documents during entity formation, there is a serious risk that key terms that are necessary to make the contract enforceable will be missing. A good example of this would be a non-compete agreement. State courts vary in terms of the required language necessary to make a non-compete agreement enforceable. Some states do not enforce non-compete agreements at all.
LegalZoom likes to advertise that their service provides a sense of security. However, LegalZoom cannot give legal advice nor correct documents that have been incorrectly filled out. How secure would you feel going into court with a document that is potentially incorrect? If the goal is a sense of security, the right choice for businesses is to have a legal professional construct documents that do exactly what is intended. The most costly legal plan for a business is one that fails to work.
3. No Tailored Service
Legal professionals write documents in ways that favor their clients. In the long term, there is no telling how much money this could save a business. If LegalZoom is used to draft a business’s documents, this advantage disappears. In many cases, the language could be significantly disadvantageous to a business. Without a professional view of the language, there is no way to be certain what the consequences of LegalZoom documents could be.
There are many parts of entity formation in which LegalZoom can offer little to no assistance, including contracts. A good attorney recognizes that a good contract goes beyond a simple list of boilerplate terms. It describes what happens in case of a breach of contract. It makes allowances for circumstances that are beyond the control of the parties. These aspects of a contract require a human touch.
4. Lack of Counsel
LegalZoom does not offer the legal counsel necessary to navigate the myriad of legal documents required that typical businesses need during entity formation. Creating a partnership? The terms of partnerships are massively significant and all parties involved should have individual representation. Furthermore, many of LegalZoom’s services are unavailable in many states. LegalZoom does not offer the proper legal counsel, knowledge, and research needed to make informed decisions on these matters.
A legal professional can identify which documents are necessary at many stages of a business, including entity formation, operation of the business, and in potential litigation. Necessary documents include terms and conditions, non-disclosure agreements, and employment agreements. Without a professional, human assessment of a business’s individual situation, owners are putting their business at risk.
5. No Customer Service
Legal Professionals are trained to draft documents and to explain the consequences of those documents to their client in simple terms. When they review contracts from other parties, they know what to look for and what might be missing that could improve the position of their client.
Corporate legal services are important far beyond the entity formation stage. LegalZoom cannot help you litigate if a problem with your document arises. It cannot answer questions about your documents. It is an incomplete service. In the long run, it will cost a business money. If you require legal services in Austin,Treaty Oak ELGcan give you complete service at a fair price that will save you money in the long term.
