By Jake Lawson, LLC Formation Strategist
LegalZoom. The name you’ve heard in countless TV commercials, the brand your neighbor mentioned when they started their business, the company that promises to make LLC formation “simple and affordable.”
But here’s what 15+ years of testing formation services has taught me: brand recognition doesn’t equal value, and LegalZoom is the perfect example of paying premium prices for average service.
After helping 1,200+ entrepreneurs choose formation services, I’ve seen too many clients initially attracted to LegalZoom’s marketing only to regret the decision when the bills arrive. Let me break down what you really get with LegalZoom—and why you probably shouldn’t choose them.
LegalZoom: The Marketing vs. The Reality
Founded in 1999, LegalZoom claims to have launched over 4 million businesses. Impressive numbers, but here’s what they don’t advertise: most of those customers could have saved hundreds of dollars using better alternatives.
The LegalZoom Promise
Their marketing suggests:
- Simple, streamlined formation process
- Professional legal services
- Comprehensive business solutions
- Expert customer support
The LegalZoom Reality
What you actually get:
- Basic form filing with aggressive upselling
- Generic templates without customization
- Customer service focused on selling, not helping
- Premium pricing for standard services
LegalZoom LLC Formation Packages: Breaking Down the Costs
Basic Package: $0 + State Fees (The Hook)
LegalZoom’s “free” formation package includes:
- Name availability check
- Articles of Organization filing
- Digital welcome packet
The catch: This bare-bones package gets you started, but you’ll need additional services that cost significantly more than competitors charge.
Pro Package: $249 + State Fees (The Reality)
The Pro package adds:
- Operating agreement template
- 90-day bookkeeping subscription ($9.99/month after trial)
- Additional business documents
My analysis: You’re paying $249 for documents you can get free online and a bookkeeping subscription most small businesses don’t need.
Premium Package: $299 + State Fees (The Upsell)
The Premium package includes everything from Pro plus:
- 30-minute attorney consultation subscription ($49/month after trial)
- Priority customer support
The problem: That “free” attorney consultation automatically renews at $49/month. Most entrepreneurs get more value from a one-time consultation with a local attorney.
The LegalZoom Upsell Machine
Here’s where LegalZoom reveals their true business model: aggressive upselling during checkout that can easily double or triple your final cost.
Essential Documents Upsells
$99 Operating Agreement: LegalZoom generates a basic template based on your answers. Jake’s take: You can get better operating agreement templates free online and customize them as your business evolves.
$159 Operating Agreement + EIN: They’ll get your EIN from the IRS for $60. Jake’s take: The IRS provides EINs for free online. You’re paying $60 for a 15-minute process.
$199 Forms Library Access: Ongoing access to their document templates. Jake’s take: Most entrepreneurs never use template libraries extensively enough to justify ongoing costs.
Additional Service Upsells
Expedited Processing ($99): 1-day filing instead of 5-14 days. Jake’s take: Many states process LLCs within 1-3 days anyway. Check your state’s standard processing time before paying for “expedited” service.
Founder’s Kit ($99): Branded binder with printed documents. Jake’s take: You’re paying $99 for office supplies. Print your own documents and buy a $10 binder.
Business License Report ($99/year): Research report on required licenses. Jake’s take: This auto-renews annually. Most entrepreneurs can research license requirements free through state websites.
Registered Agent Service ($249/year): LegalZoom serves as your registered agent. Jake’s take: You can get identical service from Northwest Registered Agent for $125/year with better customer service.
The True Cost of LegalZoom: A Real-World Example
Let’s say you’re forming an LLC in Texas (state fee: $300):
LegalZoom Pro Package with Common Upsells:
- Pro Package: $249
- EIN Service: $60
- Expedited Processing: $99
- Registered Agent: $249
- Texas State Fee: $300
- Total: $957
Northwest Registered Agent Alternative:
- Formation Service: $39
- Free first year registered agent
- Texas State Fee: $300
- Total: $339
DIY Alternative:
- Texas State Fee: $300
- Free EIN from IRS
- Free operating agreement template
- Total: $300
You save $618-657 by avoiding LegalZoom.
Customer Service: The Sales Focus Problem
LegalZoom’s customer service priorities become clear when you call with questions:
What they focus on:
- Gathering your business information for sales targeting
- Pushing you toward their formation questionnaire
- Upselling additional services
What they don’t focus on:
- Answering your actual questions
- Providing genuine formation guidance
- Helping you understand what you really need
The “Legal Advice” Limitation
Despite the “Legal” in their name, LegalZoom explicitly states they don’t provide legal advice. Their attorney consultation service connects you with independent lawyers for basic questions—but you’re paying premium prices for what amounts to a lawyer referral service.
Document Quality: Templates, Not Custom Solutions
LegalZoom’s documents are mass-produced templates filled with your information. You can’t edit them later without paying again.
Operating Agreement Issues
- Generic templates that may not fit your business structure
- PDF-only format prevents future modifications
- Limited customization based on questionnaire responses
- No ongoing updates as your business evolves
The Template Trap
When your business changes (new partners, different profit splits, operational modifications), you can’t simply update your LegalZoom documents. You need to pay for new documents or hire an attorney to create custom agreements.
LegalZoom vs. Better Alternatives
Northwest Registered Agent: My Top Recommendation
Why Northwest wins:
- Transparent pricing: $39 + state fees, period
- Includes registered agent: First year free, then $125/year
- Address privacy: Use their address on formation documents
- Actual customer service: Humans who help instead of sell
- No upselling: What you see is what you pay
DIY Formation: The Smart Budget Option
When DIY makes sense:
- You’re comfortable following instructions
- You want maximum control and cost savings
- You don’t need hand-holding through the process
Free resources available:
- State-specific formation guides
- Operating agreement templates
- EIN application instructions
- Compliance calendars
Local Attorneys: For Complex Situations
When lawyers make sense:
- Complex ownership structures
- Industry-specific requirements
- Significant liability concerns
- Multi-state operations
Cost comparison: A local attorney typically charges $800-1,500 for LLC formation—still less than LegalZoom with upsells, but you get actual legal expertise.
The LegalZoom Guarantee: Limited Protection
LegalZoom’s “LZ Guarantee” sounds reassuring until you read the fine print:
What’s covered:
- Correction of their filing errors (at no cost)
What’s not covered:
- Refunds after documents are submitted to the state
- Third-party processing fees
- Subscription services you’ve used
The reality: Once LegalZoom files your documents, getting refunds becomes nearly impossible.
Red Flags About LegalZoom
Automatic Renewals
Many LegalZoom services auto-renew:
- Bookkeeping subscription: $9.99/month
- Attorney consultation: $49/month
- Business license monitoring: $99/year
- Registered agent service: $249/year
The problem: These renewals often continue charging even when services aren’t being used.
Data Sharing
LegalZoom sells your contact information to financial partners, creating:
- Unwanted marketing calls
- Privacy concerns
- Multiple companies with your business data
Misleading Marketing
LegalZoom’s advertising often implies legal representation when they actually provide:
- Document preparation services
- Referrals to independent attorneys
- Generic business advice
Industry Comparisons: How LegalZoom Stacks Up
vs. Northwest Registered Agent
- Price: LegalZoom higher by $200-600+
- Service: Northwest more transparent, less pushy
- Value: Northwest includes more for less money
vs. ZenBusiness
- Price: Similar base pricing, but LegalZoom upsells more aggressively
- Features: ZenBusiness offers better basic packages
- Support: Both have issues, but ZenBusiness is less sales-focused
vs. DIY Formation
- Price: LegalZoom costs 3-5x more than DIY
- Control: DIY gives you complete control
- Learning: DIY helps you understand your business better
When LegalZoom Might Make Sense (Rarely)
Possible scenarios:
- You have money to burn and hate paperwork
- You need the “brand name” for psychological comfort
- You’re forming multiple entities and want consistent processing
Even then: You’d likely get better value from a local attorney who provides actual legal expertise.
My Honest Recommendation
For 95% of entrepreneurs: Choose Northwest Registered Agent ($39 + state fees) or DIY formation for maximum savings.
For complex situations: Hire a local business attorney for actual legal expertise instead of paying LegalZoom premium prices for template services.
Never choose LegalZoom if:
- Budget is a concern
- You want transparent pricing
- You prefer honest, helpful customer service
- You don’t want aggressive upselling
The Bottom Line on LegalZoom
LegalZoom succeeds because of marketing, not value. They’ve built a recognizable brand that attracts entrepreneurs who assume brand recognition equals quality service.
The reality: You’re paying premium prices for basic services that better companies provide for less money with superior customer service.
My advice: Save your money. Use Northwest Registered Agent if you want professional formation help, or file yourself using free state resources. Either option gives you better value than LegalZoom’s upsell-heavy approach.
Frequently Asked Questions
Is LegalZoom legitimate?
Yes, LegalZoom is a legitimate company that will file your LLC documents. They’re just overpriced compared to alternatives.
Will LegalZoom formation work in any state?
Yes, but you’ll pay the same high prices regardless of your state’s actual filing complexity.
Can I cancel LegalZoom services?
Yes, but their automatic renewal subscriptions can be difficult to cancel, and refund policies are restrictive.
Does LegalZoom provide ongoing business support?
They offer various subscription services, but you’ll pay more for ongoing support than it’s worth for most small businesses.
Ready to Form Your LLC the Smart Way?
Skip LegalZoom’s overpriced upselling machine. Choose a formation method that respects your budget and intelligence:
Best overall value: Northwest Registered Agent ($39 + state fees) with transparent pricing and excellent service.
Maximum savings: DIY formation using free state resources and templates.
Complex situations: Local business attorney for actual legal expertise.
Don’t let slick marketing convince you to overpay for basic services. Your business deserves better value than LegalZoom provides.
Questions about LLC formation services? I’ve tested every major provider and helped over 1,000 entrepreneurs avoid expensive mistakes. Choose formation services based on value and service quality, not advertising budgets.
About Jake Lawson: LLC Formation Strategist with 15+ years helping entrepreneurs choose smart business structures. MBA Finance (UT Austin), Certified Tax Consultant. Independent reviews with no hidden agendas—just honest guidance based on real-world testing and client feedback.