Date: April 12, 2013 Topic: The Shrinking ... - Georgetown Law

Today, LegalZoom offers a broad portfolio of interactive legal documents that
customers can tailor to their specific needs through using dynamic online processes and
scalable technology. LegalZoom’s interactive legal documents are designed for use, as
appropriate, at the federal level, as well as in all 50 states, the District of Columbia and
approximately 2,900 U.S. counties. LegalZoom’s interactive legal document services for
small businesses include limited liability company formations, incorporations and
trademark applications and for consumers include wills, living trusts and powers of
attorney. Customer demand for these transactional offerings has remained very strong
with recent quarterly order volume remaining at over 100,000 transactions with high
points of over 150,000 92 .
200
150
100
50
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Orders Placed
(Thousands)
This order volume not only provides revenues, but also provides LegalZoom with
unique insight into the legal needs of small businesses and consumers. LegalZoom
leverages that legal knowledge and team of experienced, in-house attorneys, often in
consultation with outside attorneys from across the United States, to design, review and
maintain their services. The high volume of transactions handled and the feedback
received from customers and government agencies give LegalZoom a scale advantage
that enables development of additional services to address their customers' needs and
refine their business processes.
Subscription Legal Plans
LegalZoom’s understanding of their customer’s needs eventually led to
significant changes to the business. Where once there was a great deal of room to work
with true DIY customers, LegalZoom began to see more customers in need of legal
advice. Due to Unauthorized Practice of Law and Corporate Practice of Law statutes,
LegalZoom employees could not provide such assistance. Further, due to Model Rule 5.4
and its various incarnations across the US, LegalZoom could not, even if desired, develop
or invest in a law firm to assist customers in these matters 93 . While lead generation
between non-lawyer websites and lawyer was becoming increasingly accepted,
92 LegalZoom.com, Inc. S1
93 While customer or client demand for such arrangements appears to be high, the US legal industry has been resistant to allowing practitioners
and firms to partner with or be owned by non-lawyers. A common fear is that doing so would give non-lawyers direct or indirect control over
lawyers’ professional judgment. However, many in the industry are calling for reforms which would allow partnerships with outside non-lawyer
professionals, the granting of partner status or ownership to such professionals within law firms, and even stock ownership of firms by the public.
According to proponents, such reforms would increase clients’ access to firms, allow firms to raise much-needed capital, and help firms attract
and retain talent, among other benefits. These calls are growing stronger given recent developments in England and an increa sing focus on access
to justice, but agreement on the matter is rather far off on the horizon. Indeed, the last time the matter came before the ABA the delegates, against
the recommendations of the counsel set up to study the issue, voted resoundingly against non-lawyer ownership.
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