Where there's a will (or a trust or business entity), LegalZoom.com looks to find a virtual way. A provider of online legal services in the US, LegalZoom.com offers small businesses and consumers access to a portfolio of self-help, interactive legal documents, which can be purchased on a transactional basis. Business clients use the company's services to set up legal entities (e.g., LLC, Inc.) and apply for trademarks, while consumers may set up wills, living trusts, powers of attorney, and even file for divorce. For customers in need of legal advice, the company offers access to a network of independent attorneys via subscription. Formed in 1999, LegalZoom filed to go public in mid-2012.
The company intends to use a portion of the proceeds it raises in its IPO (up to $120 million) for funding sales and marketing campaigns, operational and technological improvements, and other general corporate purposes. Such investments would support LegalZoom's growth strategy, which includes bolstering its subscription-based legal advice services and expanding into international markets. Prior to the filing, the company was controlled by affiliates of Polaris Venture Partners, which held a 35% ownership stake, and Institutional Venture Partners, which owned a 15% stake.
LegalZoom filed its IPO after a financially successful year in 2011. Its revenues were up in both its transactional and subscription-based service segments, due in part to lowered prices in its legal documents segment and expansion of its legal subscriptions. These higher revenues, when combined with lower general and administrative costs and an income tax benefit, helped lift the company's net income into the black after years of operating losses.
Other revenue sources include subscription-based registered agent services for businesses and subscriptions for unlimited access to its legal document library. Although LegalZoom offers legal services, it does not classify itself as a law firm and does not directly provide legal advice. – less