Upstart Outsmarts LegalZoom

If you thought that lawyers couldn’t effectively compete with low-end, quasi-legal providers like Legal Zoom, think again. There’s a new upstart service, aptly named Upstart Legal that’s come up with one formula to take on non-lawyer alternatives.

The brainchild of attorney John Gerber, offers a web-based, legal package that gives entrepreneurs the legal documents they need to start and run their businesses reports the Philadelphia Business Journal. The package, which costs $395.00, includes LLC formation, non-disclosure agreements, federal and state tax identification number registration, service contracts, partnership agreements and subcontractor agreements. While Upstart Legal’s package costs slightly more than than Legal Zoom’s Express Gold Service, it includes the same key materials, plus the added assurance of quality control by an attorney with twenty years of experience with start-ups.

From a consumer perspective, the upside to using UpstartLegal is clear. But lawyers like Gerber benefit too. Because UpstartLegal leverages Gerber’s experience and knowledge and automates the preparation process, the marginal cost of adding the service (after the start up costs of set-up) is close to zero. Meanwhile, Gerber gets the opportunity to capture start-up clients that could not otherwise afford his service. And at some point, these companies might grow up and graduate to using Gerber’s full service firm, Gerber Legal.

Lawyers can try to sue companies like Legal Zoom, but competition from non-legal sources is not going to go away. As I wrote over five years ago, rather than try to beat these companies into submission, lawyers should find ways to compete with them, and let market forces handle the rest.