Please ensure Javascript is enabled for purposes of website accessibility
Via its website, LegalZoom offers services such as wills, power of attorney and forming limited liability companies. (Screenshot taken from LegalZoom website)

Zooming in to take away business?

Solos, small firms not likely threatened by LegalZoom-Sam’s Club deal

Online legal services provider LegalZoom has teamed with Sam’s Club, the Wal-Mart-owned, membership warehouse store, to offer families and small businesses deals on legal services, including estate planning and attorney consultations.

While the new partnership could introduce some competition to solos and small firms who also provide these services, several experts said it is unlikely to pose a significant business threat to most lawyers.

Through the partnership, Sam’s Club members will be able to browse and purchase LegalZoom services on the store’s website,

LegalZoom will offer a selection of services to Sam’s Club members, including one option that is billed as a $299 “suite of estate planning products” — a will or living trust, power of attorney, a living will and a year of unlimited revisions and attorney consultations.

Sam’s Club members will also receive a discount on the company’s other offerings, such as the tools needed to form a limited liability company or register a trademark.

“This is really about small business member solutions, but we’re also offering estate planning, so families that happened to be Sam’s Club members could also take advantage of it,” said LegalZoom spokeswoman Johanna Namir.

Carolyn Elefant, an energy lawyer and author of the solo- and small-firm-focused law blog My Shingle, said the nature of LegalZoom’s services means the new partnership is unlikely to lure huge numbers of clients away from traditional law firms.

“A lot of the needs that LegalZoom has always served have been at the margins. They’re cases that didn’t come to lawyers or that lawyers didn’t want,” she said. “Most lawyers don’t want to just create a form — doing a $250 will is often more trouble than it’s worth.”

It’s possible the Sam’s Club partnership will prove popular without bringing down solos and small firms, simply because it may attract customers who wouldn’t otherwise be inclined to seek legal assistance, said Pat Yevics, the Maryland State Bar Association’s director of law office management.

“I’m not 100 percent sure that the people that would go through Sam’s Club for legal services would really engage the services of a lawyer otherwise,” she said. “Would it hurt long-time, established solo practitioners? Probably not too much.”

For complex legal work, many clients will still require the services of a lawyer, Elefant said, and the more specialized an attorney’s practice, the less likely that LegalZoom’s expansion will pose a threat.

“If you have a specific issue, like an LGBT will issue or a single-parent issue, those are not really going to help you,” she said. “For solos that have niches, they don’t really have anything to worry about.”

The level of discount each Sam’s Club member receives from LegalZoom will depend on his or her “tier” of membership — “Sam’s Business” and “Sam’s Savings” cardholders, who pay a $45 annual membership fee, will receive 20 percent off LegalZoom products, Namir said, while “Sam’s Plus” customers, who pay $100 each year, will receive a 25 percent discount.

Sam’s Club has 643 stores across the nation, including a dozen in Maryland. So far, Namir said, the products will only be available for members to purchase online, and LegalZoom has no plans yet to market its services in Sam’s Club stores.

With its online model, LegalZoom has built a following over the last decade, but Yevics said she hasn’t seen many firms that have struggled to keep up.

“I haven’t heard that it’s been dramatic competition,” she said. “I have not heard lots of moaning and groaning over the years.”

However, that doesn’t mean there won’t be cause for concern in the future, Elefant said. While LegalZoom may not rival the average solo or small firm lawyer’s services today, the company is amassing an “empire of resources” that could soon enable it to directly compete with other lawyers, she said.

“The real concern is not so much with the services, but with the revenues they generate,” she said. “Eventually, they’ll be able to provide more than just forms.”