LegalZoom vs Incfile

Features, pricing, and contract terms compared

Patrick Ward Patrick Ward Follow Published: Sep 27, 2022

LegalZoom targets the SMB segment, tilting towards legal services for business owners as their name implies. These legal services span professional and personal requirements for business owners who don't wish or are able to spend on the full cost of an attorney. IncFile, by contrast, targets solopreneurs and helping them navigate the initial steps of starting a business compliantly, particularly if they have limited experience with the regulatory considerations such as consultants and corporate employees with side hustles aiming to turn them into a full-time income.

Content on this page does not constitute financial advice. It is intended for general information purposes only.

LegalZoom

3.4/5 stars

LegalZoom supplies formation services at a higher ticket price than Incfile because they also supply a host of other services ranging from boilerplate contracts to personal will & testament products. The benefit of LegalZoom is this wide-ranging integration.

IncFile

4.4/5 stars

Incfile does one thing, and does it well: formation for new businesses and the basic legal paperwork surrounding that process. They cost and speed is much faster because they do this specifically, rather than extending to dozens of other legal services.

Summary of key differences

FeatureLegalZoomIncFile
Entry price$79 + state fees$0 + state fees
Standard processing time20 business days1 business day
Foreign qualification fee $229 $149

Pricing Analysis: LegalZoom vs IncFile

LegalZoom's complexity and customization comes back to haunt it when it comes to price, coming in with a basic package price of $79 + state fees, compared to IncFile's very marketable $0 + state fees. It doesn't get much better for LegalZoom on the renewal with a rather exorbitant $299 annual charge for a registered agent, which is almost 3X IncFile's fee for the same service at $119.

LegalZoom pricing

The base pricing from LegalZoom is more expensive than IncFile. However, note that pricing is impacted by state fees. For example, LegalZoom customers setting up an LLC in Delaware will see an initial cost of $169 (package cost plus the state LLC fee). In Wyoming, the same package would cost $279 because of the higher state fee.

IncFile pricing

IncFile is the less expensive formation service offering compared with LegalZoom. However, note that pricing is impacted by state fees. For example, IncFile customers setting up an LLC in Delaware will see an initial cost of $90 (package cost plus the state LLC fee). In Wyoming, the same package would cost $200 because of the higher state fee.

LegalZoom vs IncFile market value analysis

Market average based on analysis of 9 formation services providers.
MetricMarket AverageLegalZoomIncFile
Lowest package price$156 before state fees$79 + state fees$0 + state fees
Formation processing time9 business days20 business days1 business day
Registered agent annual cost$152 $229 $149

User experience & onboarding

Onboarding for LegalZoom aims to demystify legal services with respect to business formation. Optionality is built-in to the flow with micro-chat questionnaire to help business owners determine the right type of business formation along with options to pick from a set menu with transparent pricing. Add-ons populate throughout the onboarding, but given the transparent pricing up front, it isn't a surprise to any prospective business owner.

Onboarding for new Incfile customers can be completed within an hour, and they list their packages clearly on their website with no need to go through a complex vetting quiz. Incfile also offers chat support for onboarding. Using chat, a live agent walks new customers through the process and collects the required information directly in the chat.

LegalZoom uses an easy-to-follow chat-style interview, helping the business owner navigate which legal products they need and which they can opt out of. LegalZoom is transparent in the charging of these add-ons, similar to IncFile. IncFile's onboarding is even more straightforward than LegalZoom although it's worth mentioning that this is generated due to a particular rigidity of IncFile's service offering compared to LegalZoom's more expansive product line.

Formation speed

LegalZoom, in true legal fashion, isn't the speediest when it comes to processing times. They hold one of the highest in the industry with twenty business day formation speeds. IncFile is on the other end of the spectrum with next business day processing time (in other words, IncFile processes business formation paperwork in one day). Needless to say, IncFile has one of the fastest business formation speeds in the industry.

LegalZoom's twenty business day processing time is in the highest range for formation services. When compared to lawyers in general, this speed might seem swift, and indeed their services are indicative of the 'legaltech' market that reduces the cost of traditionally expensive legal advice. However, their formation speed is not up to scratch when compared to Business Formation-specific services that promise processing in a handful of days.

Incfile's one business day promise is among the fastest turnarounds on the market. They're able to accomplish this because they err on the side of rigid, clear-cut plans rather than customized packages. Note that time can lag in some states due to limitations on state processing systems.

Are they worth the cost?

LegalZoom is geared towards both the SMB and Solopreneur markets, with a strong emphasis on the individual business owner themselves. Their positioning is indicative of trying to be a one-stop-shop for businesses that have legal needs but are fearful of the costly retainers incurred by an in-house counsel or legal contractor. LegalZoom's products look to cover the breadth of what an SMB or Solopreneur business owner would need - not only professionally such as formation, trademarks, and ongoing contracts, but also personal with products for estate planning, family law, and real estate.

IncFile is aimed at Solopreneurs. Their site consists of a number of resources around individuals turning their side hustles into full-time businesses, powered by IncFile. They also brag as social proof about the number of Entrepreneurs specifically that their product has helped. If you fall out of the solopreneur category i.e. looking for tax advantages or future fundraising, then the angle of IncFile may not be appropriate for you.

NanoGlobals editor's rating for LegalZoom reflects its comprehensive nature of legal services for an aspiring business owner. LegalZoom earns points for being more cost-efficient than regular attorney services along with ease of onboarding via chat and helpful introductory flows to their products. Unfortunately, they miss the mark on pricing and processing times when compared to the industry average, outweighing any perceived advantage of being legal experts since, like with all services in this formation niche, their recommendations don't constitute legal advice.

The NanoGlobals editor's rating for Incfile reflects the fact that while their pricing is among the lowest in the industry, the add-on and recurring fees often come as a surprise to first-time solopreneurs using the service. Incfile is a reliable service for customers who understand the fees and the fact that registered agent fees are recurring. Incfile gets strong marks for offering a transparent and simple package pricing scheme.

Author Credentials

Patrick Ward is an expert on working with startups and new businesses. He has 8 years experience serving tech-enabled companies with staffing and growth.

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