LegalShield vs. LegalZoom: Comparing LLC Formation Services

Entrepreneurs need solid legal support to start and run their businesses. However, an average attorney can charge an hourly rate between $200 and $500 or even higher. This is where online legal service providers come into play. They help business owners streamline their legal needs for a fraction of the cost and ensure that all legal documents are in order.

Legal Shield and LegalZoom are two of the best online legal services available on the market. But which one, if either, is right for you? Read this LegalShield vs. LegalZoom review to learn more about their LLC formation services, registered agent services, and customer support.

LegalShield vs. LegalZoom: at a Glance

• LegalShield offers a robust package of member perks, including business consulting and HR services. LegalZoom customers don’t have access to a similar package.

• LegalZoom provides legal services spanning several practices, each priced individually. LegalShield focuses on prepaid plans for businesses and individuals that are renewable every month.

• LegalShield differentiates itself from LegalZoom by offering access to attorneys. Still, customers have expressed dissatisfaction with the quality of these attorneys.

• Clients report poor customer support from both LegalShield and LegalZoom, noting long waiting times and low-quality assistance. It may be worth looking into alternative business formation services.  

LegalShield vs. LegalZoom: What Sets Their Business Formation Services Apart

LegalShield and LegalZoom feature differences in LLC formation services, registered agent services, legal services, and prices. Customer service satisfaction and ease of use are comparable. You can find a more detailed analysis below. 

Business Formation Pricing

Believing in affordable legal access, LegalShield offers a one-off “start a business” package for $149 + state filing fees. Here’s what LegalShield includes in its business formation package:

• Formation of your single-member LLC

• Consultation with an experienced business formation lawyer 

• Business name check

• Securing your Federal Tax ID (EIN)

• Legal document filing to start your business

• Articles of Organization

• Three months of legal support for your business

You’ll get started by filling out your business formation questionnaire and scheduling a legal consultation with a lawyer. Then LegalShield will file your paperwork and get back to you once it is done. One of the things that you’ll discuss during your consultation is which business structure is right for you: LLC, corporation, DOA, or other. 

After your business formation, you have three months of legal support. Then you can enroll in a monthly subscription for a small business plan to keep getting legal help from LegalShield. The price for the starter legal plan is $49/month, but you can decide to get add-ons. The Pro monthly membership runs $169/month. 

Some of the things included in the small business plan are: 

• Legal advice, consultation, and research

• Collection letters

• Document review

In contrast, LegalZoom doesn’t require monthly fees, instead charging a flat rate for its services. The pricing of business formation with LegalZoom depends on the type of business structure that you want to register. 

• Limited liability company (LLC): $79 + state filing fees

• Corporation (C-Corp or S-Corp): $149 + state filing fees

• Doing business as (DBA): $99 + state filing fees

• Nonprofit: $99 + state filing fees 

Once you form your business, you can keep using LegalZoom for registered agent services, annual reports, contracts & agreements, and more, paying a flat fee for each service. 

LegalZoom offers cheaper pricing for business formation services for all business structures, except when you want to form a corporation. In this case, LegalZoom and LegalShield charge the same rate ($149 + filing fees).  

Turnaround Times

When you work with LegalShield, your application and payment can take up to 48 hours to process. During the checkout process, you can also choose a time for your small business lawyer to contact you for the legal consultation included in your package. After your consultation, the rest of the formation process takes, on average, three to five business days.

LegalZoom doesn’t offer a legal consultation with a lawyer, so the filing process starts right after you complete the intake questionnaire. The processing time can take from five to ten business days. LegalZoom offers rush filing for an additional cost, with an Express Gold package (1-day processing time and express shipping) costing $349 + state filing fees. 

It’s important to note that turnaround times with LegalShield and LegalZoom ultimately depend on government timelines and vary by state. Online legal service providers prepare your paperwork, but government offices form your business.  

Registered Agent Service

All business entities, including LLCs and corporations, must have a registered agent to receive important legal documents and communications on their behalf. These documents can include subpoenas, IRS documents, debt collection letters, and general correspondence. 

Any person can be your registered agent as long as they pass these requirements: 

• They are at least 18 years old

• They have a street address in the state (not a P.O. Box) 

• They are present at that address during business hours (Monday through Friday, 9 a.m. - 5 p.m.) 

Some new business owners decide to be their own registered agents or designate their spouse or a friend to save money, but this approach has significant downsides, including: 

Having to always be present during business hours 

Your registered agent must be at the designated address during business hours every day. This requirement exists because many documents, such as lawsuits, can only be served in person. This requirement can make your schedule much less flexible. 

Privacy concerns

The registered agent’s address is a part of the public record, which may be problematic if you or your designated agent want to keep that part of your life private. 

Updating the address

If your registered agent moves or travels, you need to remember to update their address. Failing to maintain your registered agent may result in legal issues, such as government fees or even the loss of your business. 

Having a registered agent is an important legal matter. It’s a good idea to invest in a registered agent service instead of becoming one yourself or designating a family member. This way, you can have both flexibility and peace of mind, knowing that your business is running smoothly. 

LegalShield does not offer a registered agent service, but LegalZoom does. This prepaid legal service starts at $299/year and includes the following: 

• Alerts whenever mail is received

• Emails about critical tax and annual report deadlines

• $1M in identity theft protection and credit monitoring services

• Unlimited cloud storage

With a registered agent service, you can always be sure that important legal documents and information will not get lost. 

Compliance Services

After your business incorporation is complete, you will need legal support with compliance-related documents and reports, such as operating agreements, articles of organization, employer identification numbers, and annual reports. 

LegalShield offers a small business monthly subscription with three different tiers and additional services. Once you subscribe, you will have access to a lawyer who can provide legal assistance and answer any legal questions about compliance that you may have. The basic plan is $49/month, the plus plan is $99/month, and the pro plan is $169/month. 

LegalZoom offers compliance services on a one-off basis. Here is what small business owners can expect to pay for standard compliance services with LegalZoom: 

• Operating Agreement: starting at $99 + fees

• Annual Report: starting at $99 + fees 

• Initial Report: starting $35 + fees

• Recordkeeping: $99/year for unlimited usage

• Compliance Calendar: $69/year

• Bylaws and Resolutions: starting at $99

Overall, LegalZoom is a better option for done-for-you compliance services. 

Legal Services

LegalShield and LegalZoom offer plans that give customers continuing legal help throughout the critical first months of the life of a business. This help can be the key to ensuring a company is part of the 67.6% of businesses that survive past the two-year mark.^[1]

Once you subscribe to the LegalShield small business plan, you get access to legal advice, consultation, and research with their attorneys. You will also get five 30-minute business law phone consultations, 20 legal business document reviews, and a combination of 20 legal letters or phone calls per year. However, you cannot choose the attorney you work with. 

LegalZoom offers a Business Advisory Plan through a vetted lawyer network if you need legal advice. You can choose to get a prepaid 6-month or a 12-month plan and get access to legal consultations, contract & Agreement reviews, legal forms, and one copyright registration per month. 

LegalZoom Business Advisory Plan includes: 

• 30-minute independent attorney consultations on new legal matters

• Contract and legal document reviews (up to 10 pages)

• Annual business evaluation (12-month plan only)

• Unlimited downloads from a legal form library

• Discounts on other LegalZoom offerings

The 12-month plan is billed once a year at $469 ($39.08/month), and the 6-month plan is billed twice a year at $259 ($43.16/month). To compare, LegalShield subscriptions are billed monthly, ranging from $49/month for the basic plan to $169/month for the pro plan. 

In addition to getting legal advice, you can also pick from one of LegalZoom’s done-for-you online legal services in areas such as: 

• Business compliance

• Legal forms and agreements

• Business changes and filings

• Taxes, licenses, and permits

Ultimately, the depth of the LegalShield vs. LegalZoom services is comparable. The main difference is that LegalZoom offers a lower rate if you need legal advice services for a long time (over 6 or 12 months, depending on your prepaid package). 

Add-On Business Services

When you subscribe to a LegalShield small business package, you can choose to enhance your plan with a Business Plan Supplement for an extra $14.95/month. This add-on will give you professional consulting help on how to run your business better, a library of business forms, a website builder, a tool to build client engagement, and other member perks. Of particular note are their HR-related offerings, which can be invaluable as a business grows. With over 3 million job openings among small businesses, your business could soon be one of those looking to shore up its HR knowledge.^[2] 

LegalZoom offers services on a one-off basis, so there is not a comprehensive upgrade that applies to all services available, but individual packages may have add-ons available. 

Customer Support

LegalShield provides a dedicated phone number and email address for member customer support. They are available over the phone Monday through Friday, from 8 am to 6 pm CST and respond to emails within 24 business hours. 

LegalZoom offers customer care over the phone, Monday through Friday, from 5 am to 7 pm PT and from 7 am to 4 pm PT on the weekends. You also have the option to contact LegalZoom through a form on their website. 

According to customer reviews on Trustpilot, clients have had trouble getting support from both LegalShield and LegalZoom. Many reviewers mentioned long waiting times and low-quality assistance.  

Similarities Between LegalShield and LegalZoom

While LegalShield and LegalZoom have some significant differences — the pricing structure in particular — these two legal services also have various similarities. 

LLC formation services

Both LegalShield and LegalZoom offer LLC formation services as a one-off plan. The most significant difference is that LegalShield offers the same pricing ($149 + filing fees) regardless of the type of business structure you’re forming. In contrast, LegalZoom offers a lower price for LLCs, DOA, and nonprofits when compared to a corporation.

Ease of use

Both providers follow a streamlined process. Most legal services begin with a simple intake questionnaire. Then LegalShield and LegalZoom take care of the legal matter with a relatively fast turnaround. 

Customer support options

Both LegalShield and LegalZoom clients have the option of contacting customer service via phone or email. 

Affordable price points

Even though LegalShield and LegalZoom have some differences in pricing, both services are significantly cheaper than hiring a lawyer. 

LegalShield vs. LegalZoom: Customer Reviews

Both LegalShield and LegalZoom have mixed customer reviews. Many clients mention long wait times to get in touch with customer support and unsatisfactory customer service. Certain reviews also complained of being charged for canceled or unreceived services.

Some reviewers have also been disappointed with the quality of LegalShield attorneys. LegalShield operates as an MLM (multi-level marketing) business, which means they don’t have complete control over their attorneys and their skills and qualifications. 

Positive reviews emphasize how cheaper it is to work with LegalShield and LegalZoom than to outsource to a law firm or hire an attorney. 

Alternatives to LegalShield and LegalZoom

LegalShield and LegalZoom are popular online legal service providers. Still, with numerous negative reviews, small business owners are looking for alternatives. 

Swyft Filings has helped over 300,000 business owners incorporate and run their businesses efficiently and confidently. When compared with LegalShield and LegalZoom, there are a few things that make Swyft Filings stand out. 

Competitive rates

Swyft Filings offers significantly lower rates to incorporate an LLC, C Corporation, S Corporation, and a nonprofit. You can have a registered business for as low as $0 + filing fees in a matter of days. In contrast, LegalShield charges $149 + filing fees for this service, and LegalZoom charges anywhere from $79 to $149 + filing fees. 

Fast turnaround times

Swyft Filings begins working on your paperwork as soon as you submit your order, which results in some of the quickest processing times in the industry. You also have the option to get Express Processing or Same Day Processing for an additional cost. 

Personalized customer service

Poor customer service is one of the most frequent complaints about LegalShield and LegalZoom. When working with Swyft Filings, you can contact a Business Specialist at any time at their direct phone number or email address. 

Interested in incorporating your business with Swyft Filings? Get started today. 

Conclusion: LegalShield vs. LegalZoom

The pricing structure is the most significant difference when comparing LegalShield vs. LegalZoom. Both legal service providers offer business formation services as a one-off, but LegalShield requires a monthly subscription for all of its other services, while LegalZoom charges a flat fee. 

Another significant difference is that LegalShield does not offer a registered agent service, while LegalZoom does. 

Yet, LegalShield and LegalZoom have mixed reviews online, and business owners are looking for alternatives. Swyft Filings is an option that stands out because of its competitive rates, fast turnaround times, and personalized customer support. You can use Swyft Filings for LLC formation services and for legal support to run your business after incorporation.  

FAQs

How much does it cost to start an LLC?

How much it costs to start an LLC depends on which online legal service provider you choose. LegalShield charges $149 + filing fees for its business formation services, while LegalZoom offers LLC formation services for $79 + filing fees, $70 lower. However, there are cheaper options, such as Swyft Filings, which offers prices as low as $0 + filing fees.

Is LegalShield or LegalZoom a better way to start an LLC?

LegalShield and LegalZoom provide a comparable LLC formation service. LegalZoom is cheaper than LegalShield, but if you decide to form an LLC with LegalShield, you’ll also get three months of legal support. You will have unlimited legal advice via phone consultations, document and contract reviews, and letters and calls on your behalf. 

Is LegalShield cheaper than LegalZoom?

For LLC formation services, LegalZoom is cheaper than LegalShield. You can expect to pay $149 + filing fees for business formation with LegalShield and $79 + filing fees to incorporate with LegalZoom, which is $70 lower. LegalShield and LegalZoom are hard to compare for other legal services since they have drastically different pricing structures. 

What company offers ongoing legal services?

LegalShield offers an ongoing small business plan on a monthly subscription basis. This plan has three tiers that range from $49 to $169 per month and give you access to various features, such as legal advice and research, document reviews, and collection letters. LegalZoom offers prepaid Business Advisory Plans for 6 or 12 months. 

What are some LegalShield and LegalZoom alternatives?

LegalShield and LegalZoom have mixed reviews online, and after comparing LegalShield and LegalZoom, we recommend investigating other options. Swyft Filings is a solid alternative that offers lower rates, faster processing times, and better customer service.

Bibliography

1. Small Business Administration. “Frequently Asked Questions About Small Business, 2020.” Accessed December 8, 2022.

2. Small Business Administration. “Small Business Facts: Small Business Hiring Needs.” Accessed December 8, 2022.