August 9, 2008

Should You Use LegalZoom or RocketLawyer for Low Cost Legal Services?

Robert Shapiro may have gained national fame for representing OJ Simpson, but he's becoming a household fixture with LegalZoom, the online legal document services company he co-founded.

In fact, legal document services look to be a growing business: just last month, announced it was going into direct competition with LegalZoom with its new venture, RocketLawyer.Com.

Everyone knows that lawyers are expensive. Cost is one of the main reasons that people procrastinate about finalizing a will, or changing it ... and for better or worse, legal fees are a big factor in divorce and separation decisions.

At LegalZoom and RocketLawyer, you avoid the expense of a private attorney as long as your legal needs are not too complicated or individualized. Need a basic will, power of attorney, or name change? LegalZoom and RocketLawyer can help you. Same goes for incorporation documentation, basic real estate leases or deed transfers, and copyright filings. RocketLawyer even offers lots of forms -- and letters -- for free at its site.

But Should You Trust LegalZoom or RocketLawyer?

Maybe. First of all, LegalZoom and RocketLawyer are skirting the periphery of a new trend in the legal marketplace, called elawyering. Recognized by the American Bar Association and other professional organizations, some attorneys are practicing online and reaching their clients via the internet. These lawyers practice akin to "virtual law offices," and both endeavors are still somewhat new to practitioner and public alike, with lots of kinks still being worked out, jurisdictionally and otherwise.

It's important to remember, however, that LegalZoom and RocketLawyer aren't acting as legal counsel. LegalZoom has a disclaimer that it is not providing legal advice (RocketLawyer does, too, but it's not as impressive), and any lawyer worth his or her salt is going to explain that every situation is unique, and in need of an expert's review. Still, that may or may not be totally true for some situations.

Some county courthouses allow do-it-yourself divorces and deed transfers. There are legal transactions that are cookie-cutter for the most part -- and these legal document service companies focus upon these areas.

If you have a simple legal transaction, then LegalZoom (or RocketLawyer) is a bargain. The key question is: as a layman, how do you know for sure?

Legal documents are tested when they are needed. You won't know the quality of your legal deed, will, or incorporation documentation until they are put to the test. If you feel secure that you're not dealing with any special issues, then LegalZoom or RocketLawyer should hopefully pass that test for you.

How Cheap is It?

Very, very cheap. Will packages at LegalZoom range from standard ($69.00) to vault ($119.00) (these were "special prices" when I checked the site). No lawyer I know (and I'm still a practicing attorney, although I limit my practice to the local Children's Court) would give you even one hour's time for these prices -- and it takes more than an hour to complete even a basic will. A divorce package (property but no children) is offered for $299 ... again, a lawyer's hourly rate will far exceed this in even the cleanest divorce.

Along with several freebies, RocketLawyer even offers a free basic will --you can't get a better deal than that, right?

The Real Risk Is a Big One

The real risk for any of these documents is their validity under your jurisdiction. The laws of Texas are not the same as Louisiana, Washington, or Vermont. Additionally, state laws are constantly changing as society progresses, etc. LegalZoom and RocketLawyer cannot -- and do not -- claim to meet these variations in legal standards. They're not offering legal advice.

Bottom Line

These prices are great, and these products may serve your situation well. However, you're taking a risk by using these document services - and it could be with a big downside.
  • What if the will isn't deemed valid after you're gone?
  • What if the incorporation documents aren't respected in your future civil suit, are your personal assets at risk?
  • God forbid, what if the divorce documents aren't valid?
With LegalZoom or RocketLawyer, you have to hope that you get far more than you pay for.


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