Think Twice Before Using LegalZoom and Rocket Lawyer

Posted by John Crow | Mar 29, 2019 | 0 Comments

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Alternatives to Lawyers 

In the past ten years, we have seen market disruptions across several industries. Airbnb is now an alternative to traditional hotels. Uber has changed the way we get around town. Netflix ended the reign of Blockbuster. Even Amazon, which has been around since the 1990s, has become a major disrupter in the brick and mortar retail industry. 

What about the legal field? For decades, even centuries, the practice of law has really not changed all that much. If you need a contract prepared, you hire a lawyer. Considering a divorce? Hire a lawyer. Want a will? You get the idea. But with the advent of the internet and the forethought of savvy entrepreneurs, the legal marketplace has changed. Companies like LegalZoom and Rocket Lawyer have sought to provide an alternative to traditional lawyers. And to a large extent, they have been successful in doing so. These companies promote online document creation for wills, trusts, contracts, and business formations. The consumer logs onto their website, answers check-the-box questions, a few fill in the blanks, and boom – their online will, contract, or LLC is created.

Are Online Legal Service Providers Worth It?

So should you use these popular types of online services? If you ask Google this question, you will find many lawyer blogs bemoaning companies like Legal Zoom and Rocket Lawyer. And to a large extent, I agree with them. There are genuine reasons why you should not hire these companies. But the true, unbiased answer is it depends on what you want to accomplish and what your budget is. Here are two primary reasons why these online services might work for you:

Cheaper Legal Services

The primary advantage that online services have over traditional lawyer is that they are cheaper – way cheaper. In some scenarios you can create a basic will for $69.00. Attorneys generally cannot compete with that price. Does this mean that you will be handed a will that is as good as any will prepared by a competent estate planning attorney? No. Remember: you generally get what you pay for. I cannot tell you how many times I have had to correct online will forms that clients brought to me. It's not that the actual wording of the will is bad. The real reason is that these online forms aren't humans. They don't ask you pertinent questions that can substantially impact your estate plan.

If You Need a Document Immediately

Another advantage of online legal services is that they can immediately provide you with basic contracts, wills, and other such forms. If you are in a pinch and need a form quickly, these documents can suffice. For example, if you are headed out of the country on a trip and want a basic will in place, an online form might be a decent option. Or let's say you need to hire a landscaper for your house and want a basic contract. A contract from one of these companies could suffice.

Disadvantages of Online Legal Services

While online legal service companies may be cheaper and produce documents almost instantaneously, they do have major drawbacks. Here are some of the reasons why you should think twice before using these companies:

They Are Not Lawyers

All online companies, from Rocket Lawyer to LegalZoom, state clearly that they are not lawyers and cannot give legal advice. They recommend speaking with an attorney if you have legal questions. Some companies even have live lawyers you can call and speak with, but of course you do not develop a relationship with that lawyer, you pay extra, and your time with that attorney is limited.

They Could Cost More Money in the Long Run

Meet Kristen. Her mother passed and she needed help probating a will that her mother prepared using LegalZoom. When Kristen sat down with a lawyer, she told him that her mother's estate was very simple and she was looking to save some money by creating this online will. The will appeared professional, had well written clauses, and was executed properly. However, as the attorney began asking Kristen about her mother's estate, it became clear that the will was problematic. In short, there was a disconnect in what Kristen and her mother thought they were getting with the LegalZoom will and what they actually received. The will failed to include critical clauses and testamentary trusts that were necessary to achieve her mother's objectives. As a result, Kristen's mother's estate was unnecessarily complicated, and it cost Kristen more money to unsort the mess the will created.

Stories like Kristen's are not uncommon. While basic forms can indeed save you money, they can also create a legal disaster that is costly to clean up. If you are not sure what you should do about a particular legal matter, call a licensed attorney. Obtain legal advice before making a decision on what you want to do. Attorneys can be more expensive than these online businesses, but the investment it well worth it when you are trying to protect your family.

They Don't Ask Questions

One of the biggest problems is that these companies don't ask detailed questions. Let's say you fill out their form for a will. It will ask for your spouse's name, your children's names, etc. But LegalZoom and Rocket Lawyer will not ask more probing questions. For example, maybe your child is disabled or has an alcohol problem. Do you really want them to receive their inheritance outright? Probably not. What if you don't want to leave your husband anything, do they advise of the repercussions of that action? You need a lawyer that will take the time to ask you the right questions and make sure that your goals are met. 

Not for Larger or Complex Legal Matters

If you have a legal matter of any significant size or complexity, these online companies are likely not a good fit for you. Most online service companies focus on smaller, simpler matters. More complex issues will require more contingencies, detailed planning, and thorough language. 

Bottom Line: Be Wary of Online Legal Services

The legal marketplace has changed in the last 15 years. Companies like LegalZoom and Rocket Lawyer have sought to provide an alternative to traditional lawyers. And to a large extent, they have been successful in doing so. Just be careful about using their services. Remember, no legal form can replace sound legal advice. If you have a matter that is super simple, these companies do offer a decent alternative. But if you aren't sure exactly how to approach a legal matter call a licensed attorney who can help guide you where you need to go.

Give Us A Call

Speak with Attorney John Crow today if you are considering preparing a will, trust, or forming your own company. John will take the time to ask you the right questions and make sure he understands the goals you are seeking to accomplish. 

About the Author

John Crow

John Crow is the founder of Crow Estate Planning and Probate, PLC, a boutique law firm located in Clarksville, Tennessee. He has extensive experience in guiding people through the important and often complex decisions surrounding wills, trusts, conservatorships, and business formations.

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