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The Real Problem with Legal Zoom

The Problem with Legal Zoom… it’s in the fine print

Legal Zoom and competitors have rapidly expanded their “services” to cater towards entrepreneurs. Cheap, quick and no hassle, what could go wrong? In its own words:

Disclaimer: Communications between you and LegalZoom are protected by our Privacy Policy but not by the attorney-client privilege or as work product. LegalZoom provides access to independent attorneys and self-help services at your specific direction. We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. Your access to the website is subject to our Terms of Use.…”

Emphasis added. The name says “legal,” but the disclaimer says otherwise. If you already know what you are doing then it can be a useful resource…but if you already know what you are doing then you know you don’t need legal zoom to file Articles of Organization and you likely already have an operating agreement.

For legal matters, you should consider consulting a local attorney licensed to practice law in your state.  If you plan to grow your business (and who doesn’t), developing a relationship with an attorney will be much more valuable than the money you save by doing it yourself. By developing this professional relationship early in the life of your business, you can be prepared for legal hurdles that may arise. Instead of being forced to hire an attorney in a time crunch, you can get started on tackling the problem.  Many business law practitioners have stories about how they were hired to sort out confusion over do-it-yourself-formation.  If you wait until there is a dispute, you may not be able to meet voting requirements to amend the operating agreement or bylaws.  Inappropriate formation can present a tremendous financial burden.  It is hard enough to succeed in today’s business and regulatory climate without self-imposed problems.

Don’t be penny wise and pound poor. Read the fine print.