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Written by: Carolyn Young
Carolyn Young has over 25 years of experience in business in various roles, including bank management, marketing management, and business education.
Published on September 5, 2022
Updated on January 7, 2023
Business entity formation is a crucial element of launching a business, and because it’s often complex and tedious many entrepreneurs hire a professional to do the job right.
Two of the leading online services to consider are LegalZoom and LegalShield. And to help you determine which is best, and which might be best for you and your business, we have thoroughly reviewed their services by putting ourselves in the shoes of an entrepreneur. Read on to make the choice that will put your business on the highway to success.
We recommend LegalZoom over LegalShield due to their outstanding industry reputation and better customer service experience.
LegalZoom is an industry leader when it comes to LLC formation. They offer three business plans, with one-time fees ranging from $79 to $349, plus state fees. Their Economy Plan is great value for what’s included and they have great customer service.
LegalZoom’s services are easy to use. LegalZoom is more expensive than some competitors, but they do offer a wider variety of legal services and have been in business more than 20 years. Overall, they’re a great one-stop shop for all of your business formation and legal needs.
LegalShield is a well-known provider of personal legal services with several different membership plans available to serve a variety of different needs. The company offers one signature LLC formation service called Launch for a one-time fee of $149.
The Launch program includes formation of a single-member LLC, a business name check, EIN, and assistance with business permits. You’ll also get three months of legal support, making it a great value.
The LegalZoom “base” Economy Plan costs $79 plus state fees and provides a business name availability search through the state database, your business’s formation, and full customer support. It offers a few extras, including a digital welcome packet and a business newsletter. You’ll also have access to your formation documents online at any time.
LegalZoom’s Standard Plan costs $329 plus state fees and includes all the services in the Economy Plan plus a founder’s kit, personalized business embosser, and membership certificates.
The LegalZoom Express Gold Plan costs $349 plus state fees and offers all of the services listed above plus expedited filing and express document shipping, making it a better value than the Standard Plan.
LegalShield’s Launch plan costs $149 plus state fees and takes care of all of the basics when it comes to forming your LLC. It includes formation of a single-member LLC and a business name check to make sure your desired name is available before officially filing. The plan includes a federal tax ID number, which is often sold as a separate service in many competitor plans.
The Launch package includes filing your articles of organization and other legal documents required by the state, such as an operating agreement. You’ll get a consultation with a business attorney and three months of legal support to help get your venture off on the right foot.
LegalShield will also assist with determining which business permits you’ll need to stay in compliance with state and local regulations.
LegalZoom offers three plans at varying price points that include a variety of helpful services for entrepreneurs. Launch is LegalShield’s only business formation service and costs $149. The top two plans from LegalZoom are significantly more expensive, however they’re still a great value for what’s included.
| LegalZoom | LegalShield | |
|---|---|---|
| Price | Economy Plan $79 Standard Plan $329 Gold Plan $349 (all + state fees) | $149 plus state fees |
| Turnaround time | 20 days for Economy 10 days for Standard 2-5 days for Express Gold *state processing times vary | 3-5 business days *state processing times vary |
| Registered agent | $299 annually | $129 in the first year and $99 annually thereafter |
| Operating agreement | $99 standard, $199 rush | Access to document library included |
| Worry Free compliance | $280 annually | Not included |
| EIN | Not included, can be added for $79 | Included |
| Website | Not included | Not included |
| Legal Advice | Legal Protection Plan - $49 per month | 3 months of legal support included |
| Customer Support | Included | Included |
| Business Permit Assistance | Not Included | Included |
We tested the customer experience of both services from every angle. Here’s what we found.
When you first go to the LegalZoom site, you’ll be able to explore products and pricing from the menu at the top, or you can just click “start my business” and select the business entity type you want to form.
However, it’s difficult to find the service package prices and information. They do not appear on the site menu. In fact, we had to do a Google search, “LegalZoom business formation plans” in order to get to that part of their website.
When you start the formation process by selecting LLC as your entity type, you’re asked a series of questions about your business. Then the site automatically offers you products, such as registered agent services and the operating agreement. You can accept or decline any of the services.
One of the products offered is a total compliance service, which does not appear in their products menu. This service helps you meet all your LLC’s requirements, such as annual report filings.
The service is free for 10 days, which is a rather short period, and then costs $280 per year. This seems expensive since you can purchase their annual report a la carte for $55 per year.
You’re also offered tax services, including “tax prep essentials” for $99 a month and a “full-service tax and accounting plan” for $159 per month. Then you’re offered a legal protection plan, which includes legal guidance and documents, for $49 per month.
Then you’re finally presented with their packages, so you can choose the Economy, Standard, or Express Gold. Once you make your selection, you get offers for special deals from Bank of America and Earth Class Mail.
Lastly, you get to your total cost. Note that anything that has an annual fee, such as registered agent services, is not included in this initial total, so you’ll need to be prepared to incur those charges later.
You can pay your initial total all at once, or you can choose to make three monthly payments. Note that if you do choose to make payments, you’ll pay a bit more due to the $2 monthly installment fee.
Overall, the process was very smooth. Yet it was also very much a sales process, as they aim to get customers to spend as possible.
It would be nice if all their service offerings and packages were easily accessible on the site before you start the process. Still, everything was made clear during the formation process and it only took a few minutes.
We tested all three forms of LegalZoom’s customer support, as detailed below.
When we tested the customer service response time through the online chat option, we received a response almost immediately. We asked about the price of operating agreements, and what determines the final price since it’s listed as “from $99”.
The answer was that it’s $99 for standard processing and $199 for rush processing. The customer service agent was quick and polite, and after the chat, we received a follow-up email almost immediately.
Support Rating:
Response time:
Immediate
We called LegalZoom to ask a question about registered agent services. Our call was answered in two minutes and the question was answered promptly. The question was whether registered agent services are included in any of the plans, and the answer was no.
The customer service representative was professional and polite and made no sales pitches.
Support Rating:
Response time:
Very quick
We asked email support what the standard filing time is vs. expedited filing. Our email was sent on a Saturday, and we received a response on Monday at about 11 a.m. The answer was polite and clear.
Support Rating:
Response time:
Reasonable
When you first go to the LegalShield website, click on the Start a Business menu at the top of the page, then click Forming an LLC. Next, click on the Form Your LLC Now button. You’ll notice the service has been added to your shopping cart.
You will also receive LegalShield’s Personal Legal Plan and Home Business Supplement packages for three months at no additional charge. Review your selections, then click Checkout.
Next, you’ll be prompted to create an account to continue the purchase process. Enter your contact information then click Sign Up. You’ll then be asked to input your personal information. LegalShield collects your date of birth and the last four digits of your social security number to verify your identity. After you enter your information, click Save and Continue. The final step is to submit your payment information to complete the process.
Note that when you purchase the Launch product, you are also enrolled in LegalShield’s monthly subscription, which costs $44.90. However, at checkout you are only responsible for the one-time payment of $149 and applicable state filing fees.
The purchase process was quick and easy and required less information than some competitor services. But it’s unclear what happens after you submit payment, unless you do a good amount of research or reach out to customer service. There is a page called How to Launch By LegalShield Works that details the process, but it is separate from the payment process, leaving the customer unsure.
After your purchase, you get access to an account portal where you’ll provide more detailed information to prepare in advance of your first attorney consultation. According to LegalShield, you can schedule your appointment within four hours of signing up and completing your purchase.
Overall, the site is easy to use if you’re ready to go and just want to complete the process. Otherwise, information can be difficult to find. The website isn’t as user-friendly as some competitor sites and we found customer service to be inconsistent, especially when it came to helping us understand registered agent services.
We tested all three forms of LegalShield’s customer support, as detailed below.
When we tested the customer service response time through the online chat option, we received a response within three minutes. We asked the first agent if registered agent services were included in the Launch plan, but the agent left the chat a few minutes later without responding.
We refreshed the chat and asked the same question to another agent who told us that LegalShield no longer offered registered agent services. However, there is a lot of information throughout the website about the services, so we decided to ask the same question over the phone as well.
Support Rating:
Response time:
Very quick
We called LegalShield and after moving through a prompt, we reached a customer service agent right away without being put on hold. We asked the agent about the registered agent services and let her know that the agent we spoke to in live chat said that they were no longer available.
She let us know that LegalShield does offer registered agent services for $129 in the first year and $99 annually thereafter. We asked if she could point us to where that was listed on the website and she let us know that it’s available as a choice when we go through the online formation process.
We also asked about the operating agreement and whether it’s included in the Launch plan or only as a separate a la carte service. The agent said that, through the legal consultation services included with Launch, an attorney would be able to assist us with drafting a custom operating agreement.
The customer service representative was very professional and polite. She tried to get us to form an LLC with her assistance over the phone, but wasn’t pushy when we told her we’d come back to it later.
Support Rating:
Response time:
Immediate
We asked the same question via email about registered agent services and received the same response as the agent on the phone call provided. We got a response within a few hours of submitting the initial inquiry.
Support Rating:
Response time:
Very quick
We wanted to know how real customers feel about both services, so we thoroughly explored customer reviews at the Better Business Bureau and Trustpilot. Below we’ve summarized our findings.
LegalZoom does not have a current rating on BBB.
LegalZoom has no rating from the BBB, but they are an accredited business, with 4.55/5 stars out of 5,572 customer reviews. They have been an accredited BBB business since 2011. They have received 903 complaints in three years, all of which have a closed status.
Many of the positive reviews for LegalZoom revolved around exceptional customer service, such as this one: “I had an issue and was able to call the company and have it resolved within a matter of minutes.”
“LegalZoom has been our trusted agent for several years now,” said another review. “The care and coordination we’ve received allows us to run a challenging business successfully and ensure compliance remains consistent each quarter.”
Some of the negative reviews were about not receiving services as expected:
“I ordered an expedited filing mid-May. It sat, and sat, and sat while nothing was filed with the state. I had to call every day to try to move the needle on this filing and this ‘expedited filing’ is still not completed. I still do not have an EIN number and it is almost July.”
Others complained about not being able to get through to customer service by phone. Many of the negative reviews were about difficulties with cancellation.
You can read reviews on the BBB website.
LegalZoom has a high trust score rating on Trustpilot.
The Trustpilot score for LegalZoom is 4.5/5 stars out of 1,644 customer reviews.
The LegalZoom reviews from Trustpilot have the following range:
Many positive reviews were again about the great customer service and the ease of use.
“Easy and affordable. Things got a bit chaotic on my end (auto-correct made changes I didn’t authorize & then there were licensing questions on my part) but all was handled with ease, patience and in a timely manner. I highly recommend, as this is the second time I’ve used LegalZoom and both times went very smoothly for usually stressful events (divorce, new business owner).”
“LegalZoom has helped me with several legal processes and they have always been highly professional and helpful.”
Some negative reviews were about not getting the services paid for and not being able to get a refund. One person said LegalZoom failed to form her business and she ended up going to the state herself to make the filing.
Another complained: “I paid for the most expensive package (Express Gold) for my LLC. I am beyond disappointed with LegalZoom. Not only did they register the wrong name for my LLC – causing me more time and money – for months they have refused to send me the physical items that were included in that package. I literally have sent over 20 emails and have been on hold and called several times explaining my situation. They just send me a link to my digital documents. That is not what I’m missing and requesting. I have sent pictures and explained ad nauseam with no avail.”
You can read reviews on the TrustPilot website.
LegalShield has an A+ rating on BBB.
LegalShield has an A+ rating from the BBB, yet only 1.97/5 stars based on 140 customer reviews. They are not currently an accredited BBB business. They have received 314 complaints which were closed in the last 3 years, and 142 complaints have been closed in the last 12 months.
Positive reviews were mostly focused around how helpful the attorney services were. Keep in mind that LegalShield provides a host of legal services, and not just business formation. Most of the positive reviews were focused on satisfaction with services related to personal legal matters. They also highlighted how fast customer service responses were.
Negative reviews expressed frustrations with customer service and attorney responsiveness. Some also referred to the lawyers as “rude” and “condescending”. People also complained about continuing to be charged for services after they’d canceled. Once again, the negative reviews were mostly centered on matters not related to business formation.
You can read reviews on the BBB website.
LegalShield has a high trust score rating on Trustpilot.
The Trustpilot score for LegalShield is 4.5/5 stars out of 2,304 customer reviews.
LegalShield reviews at Trustpilot break down as follows:
Positive reviews focused on ease of use, professional and informative service when dealing with attorneys, and responsiveness from customer service. One person appreciated the proactive follow-up from an attorney on a personal legal matter. A handful of the reviews were from people who claimed to have been a member for several years and were always happy with their experience.
Negative reviews called LegalShield services a “waste of time”, with some people mentioning they could have saved money by handling matters on their own. Other reviews referred to poor customer service and attorney response times, getting poor advice from an attorney, and difficulty with cancellation.
Like the reviews from the Better Business Bureau, many of the TrustPilot reviews were focused on personal legal issues and services and not business formation services.
You can read reviews on the TrustPilot website.
Recommended
We recommend LegalZoom due to their affordable solutions and broad selection of offerings.
Visit LegalZoomIf you’re looking for support from a team of expert lawyers, LegalShield may be right for you
Visit LegalShieldAfter a thorough assessment, we have determined that LegalZoom offers the better value and broader service offerings. Although LegalZoom is a bit more expensive, we believe you get what you pay for and they’re one of the best in the business.
The main advantage of LegalShield is having access to a team of experienced lawyers. If you’re looking for business legal services, LegalShield may be a good option for you.
As an entrepreneurial advisory site, we take our responsibilities seriously. We understand that countless entrepreneurs, and potential entrepreneurs, rely on our judgments and insights, particularly when it comes to creating their business.
As a result, our writers do their utmost to gain a comprehensive understanding of the services offered and the actual customer experience. In this case, we:
Thanks to this full immersion in the actual customer experience, our reviewer and team are able to provide the most complete and insightful comparison of LegalZoom and LegalShield LLC formation services.
Using a business formation service to start your LLC frees you up to focus on growing your business. These services handle the filing process for you and offer additional services that can make life easier for a new business owner.
When assessing whether or not a business formation service is right for you, it’s important to dive into the following four categories: included features, customer service, pricing, and turnaround time.
Overall, LegalZoom is a reliable service that has been around for a while. If you need a one-stop shop for legal and business services, they are probably your best bet.
Yes, overall LegalShield offers good value and legal support for business owners. However, they do not offer as many benefits as other LLC formation competitors. Their customer service and website experience is, however, not at the level of industry leaders like ZenBusiness and LegalZoom.
To learn more about the customer experience at a particular business formation service, check out the reviews and ratings on the Better Business Bureau and Trustpilot websites.
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