Online Legal Services vs. Hiring an Attorney: A Guide for E-commerce Entrepreneurs

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Online legal services are quickly becoming one of the most popular alternatives to brick-and-mortar law firms, growing an average of 6.3% per year since 2016. It’s easy to understand why: lower costs, quicker service, and a do-it-yourself pace with no expensive retainer agreements.

But when something seems too good to be true, it usually is. So, do online legal services like LegalZoom and Rocket Lawyer really hold up to traditional attorneys? Here is a guide to help you navigate the difference and make the best decision for your e-commerce business.

What Are Online Legal Services?

Online legal services are web-based document-preparation sites that allow you to create and file legal documents on your own. Some examples include LegalZoom, Rocket Lawyer, IncFile, and LegalNature. There are many benefits to these sites, especially for small businesses:

  • Pricing structure: This is the biggest benefit by far. LegalZoom charges between $79-$149 to form an LLC or a corporation, which is significantly more affordable than the $1,000-$3,000 average filing cost with an attorney.
  • Wealth of legal information: How-to articles and user guides are readily accessible at all hours of the day. This is particularly helpful for an e-commerce business that might not have the same operating hours as a traditional law firm.
  • Ongoing attorney consultation services: With LegalZoom’s Business Advisory Plan, you get a 30-minute consultation on new legal issues and 10 pages of contract review every month.

Do They Provide Legal Advice?

The catch-all category of “online legal services” is a bit misleading, though, since these websites do not offer legal advice. In fact, they include very extensive disclaimers. LegalZoom states that the information presented on their site “is not legal advice and is not guaranteed to be correct, complete, or up-to-date.” Similarly, Rocket Lawyer states that they do “not provide legal advice or representation, and [they are] not intended as a substitute for an attorney or law firm.” While both the informational and legal documents provided on these websites are valid when executed, they are not considered legal advice and there is no liability protection in the event of mistakes.

It’s important to know what you are (and aren’t) getting when you sign up for these websites. Too often business owners think that they are getting an ongoing attorney-client relationship when that’s simply not the case. Even the monthly consultation services are limited to just 30 minutes or 10 pages of document review.

How Do They Compare to Attorneys?

There are several major differences between online legal services and licensed attorneys, including:

  • Specialization: For the most part, online legal platforms do not offer services specific to e-commerce. Their services and documents are very general, leaving it up to you to know exactly what you need. Attorneys, on the other hand, are trained in many different aspects of the law and may even specialize in e-commerce. They will help you navigate issues like technology, privacy and security, payment processing, copyright infringement, trademarks and trade names, and antitrust regulations.
  • Individualization: Many people don’t realize there are mistakes in their legal documents until they end up in court without the rights they thought they had. Attorneys will spend time assessing your individual situation so that your legal documents address your specific concerns.
  • Education: Attorneys are required to keep up with continuing legal education in order to practice law. This is a huge benefit since laws are constantly changing, especially when it comes to the technology and internet-based services on which your e-commerce business relies.

When you hire an attorney, you are paying for the education, expertise, license, and liability protection that you don’t get through websites like LegalZoom.

Making the Right Decision for Your E-commerce Business

It’s not always easy to know which option is best for your e-commerce business. If you simply don’t have the cash flow to afford an attorney or if you are familiar with the law and feel comfortable navigating the process on your own, online legal services may be right for you. But if your situation is complicated or highly specific, an experienced e-commerce attorney is probably your best bet.

In the end, choosing between these options doesn’t have to be an either-or decision. Many people are combining the do-it-yourself document feature of LegalZoom with the legal advice of a licensed attorney.

How We Can Help

Whether you’re thinking about starting an e-commerce business or you’ve been in the industry for a while, Tree Street Advisory can help you understand and navigate choices like these. Call (615) 219-9802 or schedule a free 30-minute introductory appointment.

Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Allan Phillips, and all rights are reserved.

Allan PhillipsAllan Phillips is a Certified Financial Advisor (CFP®) and founder of Tree Street Advisory. He works with E-commerce business owners and Physicians who are concerned with issues such as cash flow management, high-earner retirement planning, debt repayment approaches, tax strategies, and business planning.


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