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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Anonymous said...

Thank you for this post! Great info.! After reading it one thing became obvious to me, even if you use a “live” lawyer there is no guarantee that they would create documentation that would be any better than a "free" or "low-cost" legal document offered at either one of these websites. I’ve used a few lawyers in my day and at a bare minimum – results vary. Some people do their job well and others don’t. I do see your very valid points and really do appreciate your insight. Thank you for your post!

Anonymous said...

I have to agree with the previous poster. Even dealing with a live local lawyer will only guarantee that you will upwards of a few thousand dollars just for basic service. Should their documents be challenged they will charge you more to dispute it. I am looking to create a simple LLC for my rental property. A local attorney quoted me $2200.00 not including the filing fee and clearly stated "No Guarantees". Rocketlawyer is free and only charges the $100 filing fee for my state. Legalzoom is $99 plus the filing fee for a total of $199. For me personally I think $100-$200 is a small risk than to just initially shell out $2300.00 bucks without at least trying to save a lot of money for the same simple task.

dsrtrosy said...

The one thing you didn't mention, but which I think is really important is that even the "free" stuff requires you to give them a credit card. I came here to find out if using one of these sites was safe because they immediately asked for my full name. Since I rarely give that info on the internet, I was suspicious. Now that I've been asked for credit card info, I'm definitely going to forego the online alternative altogether.

Anonymous said...

What is the real problem here is that don't know what you don't know-- you can get a form for free (or a very small fee), but is it the right form? It's sort of like going into the pharmacy and buying over the counter meds for what you think is wrong with you-- what if your self-diagnosis is way off the mark? Only a lawyer can tell you if an LLC is the right way to organize your business given your financial and family situation (and the laws of your state). You get the forms you are looking for, not the ones you don't know you need.

Anonymous said...

Many are missing the opportunity to scroll down on Rocket Lawyer and select, no thanks, I just want my free document. It is small down the page and leads you to believe that you can't have 1 document for free as promised. But if you figure it out, you can save and edit your free document without giving a credit card. They just don't make it easy for you!

kymeshia morris said...

Great job describing these DIY legal websites. Most of these sights give the impression that customers are working with attorneys to prepare their documents instead of them being left to decide legal issues themselves.

I think the overall concept is great, but from the reviews I've read, people don't get the necessary advice they need. As the saying goes, you get what you pay for!

Anonymous said...

It IS free...from Rocket Lawyer. As Anonymous said, you scroll down. Don't put your credit card info anywhere. You can download it for free if you figure it out...not difficult to do.

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