LegalZoom.com, Inc. (LZ) Stock Analysis

LegalZoom’s primary competitive advantage is its scale and brand recognition in the fragmented online legal services market. As of mid-2025, it has formed over 4.8 million businesses and delivered 4.4 million estate planning solutions, with approximately 2 million active legal and compliance subscriptions—figures unmatched by direct competitors such as Rocket Lawyer or Incfile. Its aided brand awareness is more than 1.5 times that of the next largest competitor.

The company’s hybrid model—combining self-serve technology with access to a nationwide network of over 1,000 independent attorneys—enables it to offer both low-cost, automated solutions and higher-value, attorney-assisted services. This dual approach is difficult for smaller or single-channel rivals to replicate at scale.

LegalZoom’s subscription-based revenue model (63% of total revenue in H1 2025) provides recurring, predictable cash flows and customer stickiness, in contrast to the largely transactional models of most peers. Its Net Promoter Score for attorney services (+75) indicates high customer satisfaction.

Recent investments in AI-powered tools and compliance monitoring further differentiate its offering, while partnerships (e.g., with OpenAI and 1-800Accountant) extend its reach and product breadth. However, LegalZoom faces ongoing threats from new entrants leveraging generative AI, as well as from traditional law firms and government agencies offering free or low-cost services. Its ability to maintain pricing power and retention as bundled ARPU declines will be a key test of its moat’s durability.