LegalZoom, “the leading online destination for small business and consumer legal services”, has filed its S-1 Registration Statement for an IPO that is expected to raise around $120 million.
The online business disintermediates the lawyer-client relationship, selling access to a variety of personalised legal documents to individuals and small businesses. $120 million will give LegalZoom the capital to expand its services and to move into new geographies, including the UK – so the IPO represents the zeitgeist both of US tech businesses coming to the public markets, and the delivery of law through alternative business structures.
According to an online commentator quoted below, LegalZoom plans to launch in the UK, and to bundle legal advice with its existing service.
Some facts from the S-1 filing:
• LegalZoom has served around two million customers in the past 10 years.
• In 2011, approximately 490,000 customer orders were placed through its website.
• More than 20% of new Californian limited liability companies were formed using LegalZoom’s online platform.
• The company made a $12 million profit in 2011 and nearly a quarter of its revenue come from subscription services, rather than one-off transactional fees.
• It employees 500 people and has a 60 person in-house tech team.
LegalZoom’s explicit objective is to disrupt the traditional law firm – client relationship:
“Despite the enormous amount spent on legal services, we believe that small businesses and consumers have not been adequately served by the options traditionally available to them. Every year, small businesses enter into legal contracts and become entangled in disputes, many of which require legal services to address. Consumers experience important life events that affect their families, including the birth of a child, marriage, divorce and death, all of which can also give rise to diverse needs for legal services. Small businesses and consumers often do not understand their legal needs or know where to start looking for an attorney. The high and unpredictable cost of traditional legal services also presents challenges. As a result, many small businesses and consumers often are unsure of or dissatisfied with the legal services available to them, and many either elect not to seek help or take no action to address their important legal needs.
We founded LegalZoom with a vision of combining the power of online technology with deep legal experience to create a scalable online legal platform that would fundamentally transform the way legal services are delivered to small businesses and consumers. We believe we are uniquely positioned to continue transforming the small business and consumer legal services market through the use of technology. Furthermore, there is a significant opportunity to expand the legal services market by making the benefits and protection of the law more accessible to small businesses and consumers. We are taking advantage of this opportunity by providing the following benefits to our customers.”
See also: Inside LegalZoom’s S-1 IPO Filing (Slaw)
LegalZoom: The “Good Enough” Legal Solution (Lawyering Blog). The author of that post has written in reply to a comment on his post that “LegalZoom is planning to launch their service in the UK sometime next year, probably in a joint venture with a major law firm, so they can bundle legal advice with their document service, which they can’t do in the US. It will be interesting to see the impact that this will have on solos and small law firms in the UK. Their experience in the UK with this modified service will generate good data that they can import back into the US. The UK will prove to be a good laboratory for LegalZoom.”