Most small businesses can’t afford to pay an attorney to step in every time a legal issue pops up—which is often, according to a survey conducted by marketing research-and-analysis firm Decision Analyst.
Consequently, 54 percent of the 13 million or so U.S. small businesses that each year find they need a lawyer’s help decide to forego such aid.
But that doesn’t mean those businesses are without options. A growing number of them are turning to online legal services providers as a far less expensive alternative to hiring a lawyer.
Basically, online legal services providers empower small businesses to handle most routine legal matters on their own, such as incorporation filings and the issuance of letters that carry the full weight of the law. If you need to prepare, say, a non-disclosure agreement for a new employee or contractor, you simply log into the online legal services platform of your choice, access a ready-to-use template of that particular document, fill in the blanks, print it out, and you’re done (except for the signatures, of course). Just like that, you’ve got an NDA that will hold up in court.
At last count, there were dozens of online legal services companies from which to choose—and more are going live each year in response to the burgeoning demand for do-it-yourself law work. We took a look at three of the best online legal services providers to see how they compare. They are LegalZoom, LetterDash, and Rocket Lawyer.
With this platform, you have the ability to access a library of more than 100 different legal forms expressly crafted for use by small businesses. Available are forms to incorporate a venture, create contracts, register a trademark, structure a business exit-plan, and more. All templates are the handiwork of actual lawyers, so you can rest assured each is correctly drafted.
Also available from LegalZoom is low-cost access to a lawyer in your state. You’ll be able to ask this lawyer to advise you on legal matters, but you’ll only receive about 30 minutes of attention. You can purchase more of the lawyer’s time if you’re willing to pay the going rate—which could be anywhere from $150 to $1,000 an hour.
As to pricing, legal forms cost $14.95 each. However, for a $7.99 monthly subscription you can access as many different forms as you want. There’s another subscription plan that entitles you to an unlimited number of those 30-minute attorney consults (the catch is that each consult must be on a different legal matter). This same plan also makes you eligible for a free annual consult in which the lawyer will give your entire business operation a cursory review to gauge how much legal risk it appears to have. LegalZoom calls this particular package its Business Advisory Plan and charges $36 a month for a half-year subscription, or $31.25 a month if you commit to a full year.
- Offers a range of business legal services
- Cost-effective if you often need basic legal help
- Knowledgeable attorneys available to talk to you
- Curated forms don’t cover all situations you’re likely to face
- Stingy amount of time granted for lawyer consults
- Customer service can be spotty
- Tends to be pricey compared to other online legal services providers
The one legal document required more often than almost any other by small businesses is the demand letter asking for payment, performance, or cessation of some type of wrongdoing. A close second is its near-relative, the letter of notice informing of danger, breach, cancellation, or intent to initiate an adverse action. Indeed, the foundation of success in almost any legal matter begins with a powerful legal letter. And that’s what LetterDash has chosen to focus on—the drafting of letters that get results.
Unlike with LegalZoom, you don’t access a library of fill-in-the-blank templates when you use LetterDash. Instead, you’re asked a series of onscreen questions about your matter, the answers to which are then used by a licensed attorney to write the letter for you from scratch. Once the letter is drafted (typically within a day or two), LetterDash sends it to you for review. If revisions are needed, LetterDash makes them at no extra charge. Once you approve the letter, it goes out via certified surface mail. And here’s the kicker: the correspondence is printed on the drafting attorney’s letterhead—this gives your missive more gravitas (and more potential to inflict fear in the recipient) than if you sent it on your own stationery.
Cost is $199 per letter. The price includes consultation with the attorney and handling charges.
- Licensed lawyer-drafted
- Typically a 48-hour turnaround—extremely fast by legal-profession standards
- Free consultation with highly skilled lawyer included
- Price is roughly 85% below the national average cost of a demand letter
- Lawyer involvement greater than at other DIY legal-services platforms
- No subscription plans; pay as you go
Rocket Lawyer is an imitator of LegalZoom, but with a few notable differences. As with LegalZoom, you can use Rocket Lawyer to form a corporation or partnership, apply for a trademark, or generate customized legal forms. However, you can use Rocket Lawyer to sign documents electronically and store them in the cloud. Rocket Lawyer also offers compliance support services.
Users give Rocket Lawyer good marks for affordability, convenience, and the ease with which simple legal documents can be created. Users pan Rocket Lawyer for the irritating occasional screw-up involving mistakes in billing (for example, some subscribers report being charged for membership long after cancelling, while others complain that getting a refund was like pulling teeth—although, to be fair, Rocket Lawyer works hard to make sure such mistakes don’t occur).
Rocket Lawyer offers various membership plans with some decent pricing options. Once you subscribe, you become entitled to talk to a Rocket Lawyer-affiliated attorney (licensed in your state). This attorney is available to review documents for you.
Rocket Lawyer charges non-subscribers $39.99 per document (subscribers pay zero) and an extra $9.99 if you want a Rocket Lawyer On Call® attorney to make sure you dotted all the i’s and crossed all the t’s. Incorporation filings are pricier–just under $100 (unless you’re a subscriber, in which case it’s free). A Rocket Lawyer subscription runs $39.95 per month. The platform offers a seven-day free trial.
- Offers a decent mix of DIY legal services
- Reasonably affordable pricing
- Relies too much on one-size-fits-all templating
- Limited access to lawyers
- Concerns you voice may not receive a quick response
The best online legal service for your small business is the one that most closely meets your needs of the moment. Is your need to complete the paperwork required by your state in order to form a limited liability partnership or a closely-held corporation? Then you’ll want to consider a LegalZoom or a Rocket Lawyer. Is your need to collect money owed by a recalcitrant customer or to recover a cash-advance you gave a contractor who failed to honor his or her end of the bargain? Then you should give thought to utilizing the services of LetterDash.
In any event, bear in mind that no online legal services company is a substitute for a retained attorney when you need to sue someone or to defend against litigation targeting your enterprise. But for everyday legal matters, you’ll find online legal services providers a good alternative.
Mr. Rich Smith