Small Businesses Have a Friend in LegalZoom

Ruby Tuesday Pick of the Week: LegalZoom
Why It’s a Gem: Affordable self-help legal services help small businesses get a jumpstart without the pricey overhead

One of the great things about technology is that it creates a level playing field. Just as Get Satisfaction helps small businesses get a handle on customer service, LegalZoom makes performing certain everyday legal tasks fast, efficient, and utterly affordable. Now even small entrepreneurs can jump in the game and play right alongside the big guys. And with the opportunity of the Great Recession upon us, the timing couldn’t be better.
(This interview has been edited for clarity and length.)

Lynda Resnick: In this week’s Ruby Tuesday, we’re speaking with Brian Liu, chairman and co-founder of LegalZoom.com. Please describe the business model of LegalZoom for the readers, and then I have so many questions to ask you. I’m fascinated by your business.

Brian Liu: We offer self-help legal documents for people so that they can start up a business, write a will, and get a lot of other important but common legal documents online and without the need of an attorney. And we charge per the particular document or service.

[The four LegalZoom founders] always had this desire to make law accessible for everyone. [When] Brian Lee and I graduated from law school, we found our friends and family [coming] to us with (what we considered) common legal needs, like starting a business, incorporating a business, or writing a will. My parents, for example, held off on writing a will for three years until I finished law school.

LR: They wanted their money’s worth!

LegalZoom Co-Founder and Chairman Brian Liu

BL: The funny thing is, the last thing law school teaches you how to do is write a will. That’s not what you go to law school for. We realized people needed these types of common legal documents, but they didn’t know who to turn to, or [they] didn’t want to spend $300-$400 an hour for these types of common legal documents.

LR: Were you the first such company in the online space?

BL: We actually were not. There were other companies before us who did parts of what we did online. But we were the first company online to really bring everything together, from the business formation, to filing a trademark application, or even a small claims lawsuit.

LR: So, what is your unique selling proposition? You’ve become kind of the generic, which is wonderful. But how do you stand out among the crowd?

BL: We are really good at relating to and understanding what customers need. We have to tell our story better than anybody else, because with a legal document, it’s not like you can touch and feel it. It’s not like selling a car, where you can say, “This part goes from 0 to 60 in 3.4 seconds.” They’re pieces of paper [with words written on them]. You have to do everything you can to create value, and what we do is that we always make sure that all of our documents are up to date and contain a lot of extras, things that are a little bit above and beyond what our competitors offer.

LR: So, you make your site very user friendly, right? Because this is an area that is very [unfamiliar] to people. They don’t know. You have to give them a feeling of trust.

BL: Yes, and that’s a very, very difficult thing to do. In terms of marketing, that’s what we’re constantly trying to do, because ultimately, trust is what people are going to consider when they make a purchase decision.

LR: Are there any areas of your business that have surprised you or changed since the Great Recession?

BL: This is surprising for us: Our business-formation business [LLC formation] has grown in this recession more than some of the other parts of our business. That really surprised us, because we would have expected that one to trail off earlier. So, what we’re seeing is people are still finding opportunities out there, and maybe this is a great opportunity for people to pursue the dream they’ve always had, which is starting their own business and being their own boss.

LR: Oh, Brian, I speak about this every day. Today, if you’re young and you’re nimble and hardworking, and you are not saddled with a huge overhead and big debt, you really have an opportunity. [Before the Great Recession], there were no opportunities. It was very, very narrow. Your competitors could just [walk all over] you with their ability to buy media. And now, with social media growing the way it is, it’s just a whole new ball game.

BL: Absolutely. The Internet really leveled the playing field. Small, nimble companies, they’ve got a lot of advantages.

LR: Yes! How many repeat clients do you have? Do you track that?

BL: We don’t track it that well, [but] it’s definitely growing. It’s not a majority of our business, I’ll tell you that.

LR: You know, you need that. Because it costs so much to get a client. In fact, there was a Harvard study published about customer satisfaction, and how your [loyal] clients and customers become ambassadors for you. I don’t know if you’re tracking that.

BL: Absolutely. That’s the one statistic that we track more closely than anything else. It’s what we call our WTR, or “Willingness to Refer” score. We’ve been tracking that for years. And that is the most closely watched statistic in the whole company.

LR: Good for you! Well, you’re ahead of the game. Now, I know you buy keywords, because you’re number one [in search]. And what about your SEO, are you constantly working on that?

BL: We are constantly working on it. The truth is, we could be better at SEO. And now, it’s so much more than SEO. It’s not just finding our particular pages upfront; it’s really through social media, the fact that other people are talking about LegalZoom. It’s so much more than just plain SEO.

LR: This is where I’m going in my marketing. Social media is virtually free. Yes, it’s a lot of hard work, it is intense work, and it is a huge commitment. But compared to buying ads on television and so forth, how can you compare the budget? I think broadcast still works, but few can afford it. I definitely believe in all sorts of media, old and new. But the beautiful thing about the 21st century is social media – communication and complete transparency. Individuals feel empowered, and what you’re selling is empowerment. I just think it should be a great part of your outreach.

BL: Absolutely. By the way, I absolutely love those POM billboards that you have. We have just started to try some billboards in one test market, but honestly we’ve never been able to make any sort of print media work. We’ve tried. For us, it’s a difficult story to tell in an ad.

LR: You have to think of the most important issue and really zero in. That’s one of the things I feel about the website, unfortunately; that it’s a little too general. I wish that every time you refreshed [the homepage], there was one item featured instead of four, and that one item would be based on what items were most popular on the site at that given moment. I also think your website should look different, depending on who was visiting the site. So, if people came in looking for a will, it would look different than if they were looking for a document for power of attorney or trademarks. I mean, if you can get people trademark work at a reasonable price, that is really amazing.

BL: Last year we filed more trademarks than the top ten law firms combined.

LR: You’re kidding! What are your other areas of growth?

BL: [One area is] attorney-assisted services, so [that we’re not limited] to only self-help legal documents. We feel that there’s a lot of opportunities out there. Our goal is to make LegalZoom the prime destination for people to go when they have a legal need. In order to fulfill that goal, we have to work with law firms to offer a flat-fee service where people can get good value [and feel comfortable].

LR: Can customers call in to talk to someone for customer service?

BL: Absolutely. We have an extensive customer service team based here, but because we’re not a law firm, we can’t actually give legal advice. We can give general information, but we can’t give advice tailored to their specific situation.

[What] makes me feel good is that when I see your marketing philosophy and your philosophy on building businesses, [those are] the same things that I really believe in. I’ll tell you, these days it’s hard to find people who share those same values.

LegalZoom's website is designed to take the fear out of common legal transactions.

LR: I know. The basic value of the business, the unique selling proposition, and complete transparency and community. We reach out to the community. We don’t just take the water out of FIJI. We bring water to 100 villages. We give $1,000 a year to everyone who works in our company to give to any charity they choose. We do matching funds up to $5,000. So, philanthropy is an important part. I hope you’re doing a bit of that. You’re in a great position to help some non-profits, and I think it would be a great part of your story, as well as to bring you personal happiness.

BL: We’ve started a lot of non-profits. We award one particular company as our non-profit of the year, and then we will donate $10,000 to their particular cause.

LR: Do you have a different fee structure for non-profits?

BL: It’s similar to what we charge for corporations, but it is less.

LR: It’s just something to think about. We’re put on this earth to do something, and making money for ourselves is lovely, but we have to give back.

How many hits a month do you get on your website?

BL: We get about 600,000 unique visitors a month right now. This year, we’re growing less than we have in the past, but [we’re] still in double digits [of growth].

LR: But what you want to get is conversion. Are your conversion rates improving?

BL: Conversion rates are improving, yes.

LR: That’s what it’s all about.

BL: It’s increasing conversion rates, but it’s also getting our name out. We’ve done a survey recently, and we’ve found that one of the main reasons people wouldn’t use us is because they haven’t heard about us.

LR: It’s very hard to get people to use you if they don’t know you exist. Anyway, it’s been delightful talking to you. You’re very smart, and I’m sure very successful. I love what you do, because anything that makes it easier for people to get into business and really concentrate on what they do well – rather than get bogged down with all this other stuff that’s not their area of expertise – anyone that does that for society is doing a great thing, as far as I’m concerned. You need to be on MSNBC, CNN – you should be out there talking. And you could be the front person, because you’re very well spoken and very lovely to talk to. People would have more confidence if they heard you. I would love to see you on television. You should go on the Today Show and talk about wills. You should go on The View.

BL: I appreciate the confidence you have.

LR: And nothing will increase your business more than broadcast editorial.

BL: We’ll get our PR firm to redouble those efforts and see if they can book me as well.

LR: Don’t be shy, Brian!

BL: It was great speaking with you, Lynda.

LR: Bye.