While (almost) all eyes were on Facebook's IPO last week, the IPO filing by LegalZoom -- the online legal documents store that lawyers love to hate -- flew largely under the radar. From WSJ Law Blog:
LegalZoom’s growth — the company took in revenue of $156.1 million in 2011, up 29.2% from $120.8 million in 2010, according to its S-1 filing — points to a demand for cheap legal services that many have underestimated.The company sells a self-help document service online aimed at helping customers resolve common legal matters, from wills to divorces to real-estate leases.
The company said it has served about two million customers over the past 10 years. And here’s a fun fact: In 2011, more than 20% of new California limited liability companies were formed using LegalZoom, according to the S-1.
LegalZoom has its eye on the roughly $100 billion in legal services provided to small businesses and consumers. The company said it plans to grow through building out its subscriptions plans and expanding internationally.
The first comments to the Law Blog post pretty much capture the main lines of the debate:
- As jobrones says, LegalZoom is taking aim at those attorneys who charge $1,000 – $1,500 to set up an LLC, and then do not ask the right questions, and fail to do the complete job. And they are out there. As a CPA, I end up fixing a lot of those messes. Not to say the legal service providers do no screw up also, but at least the client is out a lot less money.
- The reaity is that most people who use LegalZoom couldn’t give a rats patootie about whether or not the company is “practicing law” or not. The whole issue is a canard – its inside baseball and meaningless except to the Lollipop Guild of state bars and practictioners who have to compete. In the end, there is a huge underserved market for low end legal services (one that is not economical to serve under the current legal provider models – i.e. fee for service). These guys are taking a stab at helping that market and more power to them.
- The axiom in the low end of legal services is – marketing is much more important than mastery. This company and others control the marketing for low end legal services and dilute the quality of lawyering at that end of the spectrum. Do you think the ordinary consumer belives they are not practicing law?
