Are you about to enter the formation process to incorporate a business online, but you don’t want to use the DIY option?
There are many online incorporation services available, but it’s not always easy to figure out which one is the best option for you. LegalZoom and Rocket Lawyer are the two most popular services in this industry, but does that mean they also provide the best value?
In this comparison guide, we’ll walk you through the five crucial factors that we use to analyze business formation services. Let’s find out if LegalZoom or Rocket Lawyer has your new company’s best interests in mind.
Key Comparison Points
In our review and comparison of each online incorporation service, we performed a “stress test” on each based on 5 key factors:
- Compared pricing and features to determine overall value.
- Researched their track record.
- Assessed the quality of customer service.
- Tested their ordering process and service’s ease of use.
- Reviewed the turnaround times for incorporating online.
Overall Pricing and Value
LegalZoom: Despite the fact that they’re an incredibly popular service, we’ve found that LegalZoom does not provide a ton of value for their clients. Their starting price point for incorporation services is $149. They also have loads of upsells, and none of their formation packages include any registered agent service, which has a variable price point that ranges from $159-299 per year as an add-on feature.
Rocket Lawyer: They take a different approach to providing business formation service than most of their competitors. Instead of having several formation packages to choose from, Rocket Lawyer only provides one option, which is their general formation plan priced at $99.99. This package includes no features beyond the simple forming of your business entity, although they do offer plenty of add-on features. However, if you want to subscribe to their legal services plan for $39.99/month, they will provide free formation service for new customers, and discounted service for existing clients. As for registered agent, this service is available for $149.99 per year.
It’s a Tie!
Simply put, neither of these companies provide their clients with much value, especially compared to some other companies in this industry. Rocket Lawyer has a lower rate for registered agent service, but their minimal-feature formation package isn’t an improvement over what LegalZoom has to offer, so we’ll call this category a tie.
Company Track Record & Experience
LegalZoom: They’ve been in business since 1999, and they’ve helped an impressive 3.6 million clients in those years. It’s worth noting that not all of those clients were business customers, although LegalZoom does say that they’ve formed over one million businesses. When it comes to customer feedback, they have a mixed bag, as they receive roughly the same amount of one-star and five-star reviews.
Rocket Lawyer: If you thought LegalZoom’s customer volume was impressive, how about Rocket Lawyer’s incredible track record of 20+ million clients served? Like LegalZoom, they also offer a wide variety of personal products and services, but either way it’s clear that they have a ton of experience serving business clients too. Their customer feedback is mostly positive, which marks a noteworthy change over a few years ago, when they received plenty of negative reviews. Clearly, Rocket Lawyer has upped their game over the last few years, and people are noticing.
Winner = Rocket Lawyer
While both of these companies have lots of experience, Rocket Lawyer has a higher customer volume, and they also receive far superior client feedback. Therefore, Rocket Lawyer wins this round.
LegalZoom: You can access LegalZoom’s customer support team via phone or email. We have experience with both of these options, and while we’ve always been impressed with their phone support, their email support has long response times, and in our experience they just send out form emails that don’t really answer our questions. Their customer service team is available from 8am to 10pm ET on weekdays, and 10am to 7pm ET on Saturdays.
Rocket Lawyer: Rocket Lawyer provides customer support by phone, email, or web chat. Their response times are always fast, and the representatives we’ve spoken to are both knowledgeable and friendly, and provided high-quality customer service. Overall, we have no complaints about Rocket Lawyer’s support network. You can reach them from 9am until 9pm ET, Monday through Friday.
It’s a Tie!
This category was a tough one to analyze, but in the end it came down to each company having a small advantage over the other. Rocket Lawyer has the superior email support, but LegalZoom has extended hours of operation that can come in really handy. Therefore, we’ll call this category a tie and move on to the next one.
Ease of Use
LegalZoom: LegalZoom’s ordering policy is somewhat confusing, and almost feels like it operates backwards. What we mean by this is that LegalZoom has you enter your personal information, then make your way through quite a few upsell attempts, all before you’ve even selected which formation package you want to buy. How do you know which additional services you want, before you choose your base package? We’re not sure either. At any rate, the way they structure their order form can result in some sky-high prices by the time you work your way through all the upsells to choose your package.
Rocket Lawyer: Considering that they only offer one formation package, it’s very easy to choose which one you want to buy! While it can be a bit of a hassle to navigate through all of their many additional services, it’s still a quick and easy process that only took us about ten minutes to complete. They also mostly avoid upsells, and entirely avoid third-party offers, which we always appreciate.
Winner = Rocket Lawyer
LegalZoom’s ordering process feels like it’s running in reverse, as you start with your personal info and add-ons, and finish by selecting the base package you’re building your order off of. They also have a ton of upsells. As for Rocket Lawyer, they have a simple and intuitive ordering process, and they avoid upsells for the most part, so they pick up a nice win in this category.
Speed of Formation
LegalZoom: Most companies in this industry base their turnaround times on which state you’re forming in ― depending on your state’s capabilities, it could take anywhere from a few days to several weeks. However, LegalZoom instead bases their formation speeds on how much money you spend on their services. Their cheapest package takes around 30 business days (six weeks), while their most expensive formation plan takes 7-10 business days.
Rocket Lawyer: Unlike LegalZoom, Rocket Lawyer’s formation speeds are based on each state’s actual turnaround times. They even have a page on their website where they provide average processing times for every state, with both standard and expedited estimates. This level of transparency is a great attribute for Rocket Lawyer in this area.
Winner = Rocket Lawyer
We always appreciate companies that base their turnarounds on actual state capabilities, rather than speeding up or slowing down the formation process based on how much money you spent on their platform. Rocket Lawyer wins this category easily.
Considering the fact that LegalZoom did not even win one category in this comparison, we think Rocket Lawyer coasts to a fairly easy victory overall.
These two companies are equals in our most important category (overall pricing and value), and also in the area of customer support, but other than that Rocket Lawyer is clearly on a level above LegalZoom.
Rocket Lawyer has superior customer feedback, faster and more transparent turnaround times, and better ease of use. Those three categories combined to make us quite confident in awarding the overall win to Rocket Lawyer. However, if you prefer LegalZoom for any reason, there’s nothing wrong with their services either, as they are a reputable company in their own right.
All that said though, we recommend and prefer a service like ZenBusiness, which has pricing that starts at $39 and offers far more included features than both LegalZoom and Rocket Lawyer.
What Is the Biggest Advantage of Each Service?
Rocket Lawyer’s biggest advantage over LegalZoom is their customer feedback reputation. It wasn’t too long ago that Rocket Lawyer was in a similar position to LegalZoom in this area ― with a mixed bag of feedback that reflected a userbase divided between satisfied and unsatisfied customers ― but in the last few years, they’ve corrected their issues, and they now receive mostly positive reviews.
As for LegalZoom, they really don’t have any significant advantages over Rocket Lawyer, but they do have a minor edge when it comes to their extended customer support availability.
Which Is the Best Package Available From These Services?
When we shop for business formation service, we do exactly what we advise our readers to do: purchase the cheapest formation package that includes registered agent service. Unfortunately, neither of these companies offers any business formation plans with registered agent.
If you’re seeking this combination of features, it’s a much better idea to go with Incfile or ZenBusiness. Both of these companies provide packages that combine business formation with a year of registered agent for just $39 or less, which is less than half as expensive as any formation package you could buy from LegalZoom or Rocket Lawyer.
Which Company Offers More Help With Ongoing Compliance Requirements?
You can access a variety of tools and features with LegalZoom to help you maintain your good standing into the future. Their registered agent service costs anywhere from $159 per year to $299 per year, depending on your exact situation, and they also sell annual report service for the low rate of $55.
With Rocket Lawyer, you can get registered agent service for a flat yearly rate of $149.99, but they do not offer annual report service at all.
Can I Get a Refund if I Need One?
Both of these companies have excellent refund policies that provide significant peace of mind to their clients. With Rocket Lawyer, you have 30 days to decide whether you’re satisfied with your purchase. If you aren’t, they will provide a full refund of your service fees.
LegalZoom has a similar policy, which is even better in one crucial way because they give you 60 days to request a refund. Like Rocket Lawyer, LegalZoom does not charge any sort of cancellation or processing fees for refunds.
Which Is the Better Option if I Need Publication Service?
In some states, you need to publish your company’s formation in a regional newspaper. For example, Arizona and Nebraska require publication for LLCs and corporations, New York requires it for LLCs only, and Pennsylvania and Georgia have this requirement for corporations only.
Unfortunately, LegalZoom does not offer any level of assistance with publication requirements. Rocket Lawyer actually offers to handle the entire process on your behalf, but they charge $299 for this feature. You can certainly get publication service for cheaper with another company, like BizFilings which offers publication for just $100.
Do Either of These Services Go Overboard With Upsells or Third-Party Partnerships?
We feel like Rocket Lawyer avoids third-party partnerships entirely, and they don’t really have anything we would refer to as an upsell either. The only area where we would possibly refer to Rocket Lawyer attempting an upsell would be how they push their legal services subscription.
Still, because this subscription includes deep discounts for business formation service, we think it’s entirely justifiable. LegalZoom also doesn’t have any third-party offers, but they have more upsells than any other company in this industry. We counted over $1,000 of upsell attempts on their order form.
Am I Required to Use a Formation Service?
No, you are not required in any way to use a professional formation service to create your new business entity. If you want to give the DIY option a shot, we even have comprehensive guides that can help you form your own corporation. However, these business types have some complexities that lead us to not recommend the DIY options very often.