What changed in this filing

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Item 1. Business

2025-02-26 compared with 2024-02-29 · 62 added, 77 removed, 181 unchanged (43% of the section changed)

LegalZoom is a leading online platform for business formation in the United States, or U.S.

Our unique position at business inception allows us to become a trusted business advisor, supporting the evolving needs of a new business throughout its lifecycle, and we have expanded our platform to include professional expertise and other products, both legal and non-legal, to better meet the needs of small businesses.

Driven by a mission to unleash entrepreneurship, we deliver comprehensive legal, tax, accounting and compliance products and expertise to millions of small business owners and their families through easy-to-use technology.

We operate across all 50 states and in over 3,000 counties in the U.S., with over two decades of experience in simplifying the legal and compliance process for our customers and empowering entrepreneurs with services that help to make their dream a reality.

LegalZoom is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system.

By combining intuitive technology with access to experienced attorneys—whether through our vast independent attorney network or LegalZoom Legal Services (LZLS) law firm—we offer the tools and guidance people need to confidently manage everything from business formation and compliance to estate planning and ongoing legal support.

We operate across all 50 states and in over 3,000 counties in the U.S.

With over two decades of experience and millions of customers served, LegalZoom helps individuals and small businesses navigate legal needs with confidence.

The LegalZoom Ecosystem

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Our customer funnel.

We believe we earn small businesses’ trust and drive significant organic traffic through our brand name recognition and reputation, as well as our free proprietary educational content, which is often our first interaction with a potential customer.

This content includes our Article Center and free access to over 160 attorney-drafted forms.

From there, our small business customers’ initial purchase is typically a business formation product that streamlines the process of starting a business.

We believe we earn our customers’ trust and drive significant organic traffic through our brand name recognition and reputation.

Our small business customers’ initial purchase is typically a business formation product that streamlines the process of starting a business.

As of December 31, 2024, we had formed over 4.6 million businesses since our inception.

Our position at business formation gives us unparalleled knowledge of our customers’ needs, often times prior to the business being operational or discoverable by other service providers.

Our position at business formation gives us unparalleled knowledge of our customers’ needs, oftentimes prior to the business being operational or discoverable by other service providers.

We leverage this valuable knowledge and our position as a small business’ first advisor to introduce our customers to the most relevant business solutions to help them manage other aspects of their business.

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For example, after forming their business entity, our customers can opt to register their company name and/or logo as a trademark or sign up for a business advisory subscription to receive additional legal support for their small business needs.

Additionally, as forming a company is an important life event, some of our small business customers opt to purchase an estate plan offering when they form their company.

The recurring revenue gained through subscription services and additional purchases from existing customers during the lifecycle of their business allows us to increase customer lifetime value.

Our consumer offerings range from estate planning to legal advice, and there is overlap in our small business and consumer offerings.

For example, as forming a business is an important life event for the entrepreneurs that we support, some of our small business customers opt to purchase an estate plan after they form their business.

See below under “ Our Products and Services ” for additional information regarding our transaction products and subscription offerings.

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See below under “ Our Technology ” for additional information.

We offer customers ongoing access to experts to help handle complex matters, including through a network of independent law firms and an in-house team of certified public accountants, or CPAs, and enrolled agents.

We offer customers ongoing access to experts to help handle complex matters, including through a network of independent law firms.

As of December 31, 2024, we had over 1,000 attorneys in our independent attorney network.

Our independent attorney network provides customers access to attorneys licensed in their jurisdiction and experienced in the types of legal matters that impact small businesses at a significant discount to traditional offline alternatives.

Our independent attorney network provides customers access to attorneys licensed in their jurisdiction and experienced in the types of legal matters that impact our customers at a significant discount to traditional offline alternatives.

Our attorneys benefit from participating in our network as we handle the customer lead generation, as well as the scheduling and billing of the initial customer consultation.

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In addition, participating law firms can leverage our brand awareness, as well as the customer feedback and testimonials, to market their own practice.

We also have an in-house team of CPAs and enrolled agents that are critical to our tax offerings.

We offer our customers access to this in-house team of CPAs and enrolled agents to provide tax preparation and filing support for federal and state returns.

In addition, since September 2021, one of our U.S.

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Currently, our ABS primarily supports our intellectual property business, and its experienced attorneys help guide customers through the trademark registration process.

During the year ended December 31, 2023, our ABS attorneys filed over 14,000 trademark applications with the U.S.

Patent and Trademark Office.

Our legal and tax services are provided across all 50 states in the U.S.

Our legal services are provided across all 50 states in the U.S.

Our partners.

We have insights into our customers and leverage our product as a channel to introduce small businesses to a variety of third party partners in our partner ecosystem.

Our third party partners are leading providers of complementary small business services that extend beyond our core offerings such as banking, credit cards, website design, and payment processing, among others.

Our third party partners are leading providers of complementary small business services that extend beyond our core offerings such as banking, insurance, tax, credit cards, website design, and payment processing, among others.

Our Competition

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• traditional offline law firms and solo attorneys, online legal document services and secretaries of state;

• accounting and tax firms and other tax preparation and filing service providers;

• large platform companies that could develop competing technology solutions to address the needs of our small business or consumer customers.

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In addition, there are structural impediments that make it difficult for traditional offline attorneys to adapt to technology advancements and consumer behaviors.

While service industries like accounting, tax, marketing and payments have rapidly transitioned online, legal offerings largely remain offline and online adoption of legal services lags behind other comparable industries.

While service industries like accounting, marketing and payments have rapidly transitioned online, legal offerings largely remain offline and online adoption of legal services lags behind other comparable industries.

However, some traditional offline attorneys have developed and may continue to develop competing online legal services.

We expect to face increasing competition from offline and online service providers in our markets.

For example, in recent years, we, along with some of our online competitors, began to target more price conscious customers by offering business formation transactions at little or no charge while cross-selling compliance and other business services.

Our failure to effectively compete with our competitors could result in lower revenue, reduced margins, and loss of market share, any of which could materially and adversely affect our business, results of operations, financial condition and future prospects.

We believe the primary competitive factors on which we compete include ease of use, breadth of offerings, brand name recognition, reputation, price, quality and customer service.

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We are in the early stages of penetrating and growing the online market for legal, compliance and business management solutions.

We aim to continue to grow our customer base and retain and expand our customer relationships with the following strategies:

Scale the business.

We continue to grow the top of our customer funnel in order to expand our customer base.

To broaden the top of our customer funnel, we have introduced and may continue to introduce lower-priced products and services targeting more price conscious customers.

We intend to maintain our brand leadership by delivering a quality product and user experience, leveraging our strong brand awareness and lower-priced offerings to drive traffic to our website and through targeted marketing investments.

As we attract more visitors to our website, we believe that we have a large opportunity to increase conversion of prospects into customers.

We will also continue to invest in further improving our customer experience, such as upgrading our mobile experience, in order to reduce friction and increase conversion across our existing products and services.

Build a business ecosystem .

As we innovate for small businesses, we aim to become their trusted partner during all stages of their business lifecycle.

We intend to provide more value to our customers during and post-formation by continuing to expand our ecosystem to include business management solutions that keep small businesses compliant, protected and financially organized.

Our strategy is focused on broadening our portfolio of new products and services and strategically deepening customer relationships, including in ways that will increase our recurring revenue through subscription offerings.

Since our initial public offering in June 2021, we have integrated five new services into our ecosystem:

our LZ Tax subscription service in July 2021, our LZ Virtual Mail subscription service in October 2022, an eSignature subscription service in April 2023, our LZ Books accounting solution subscription in August 2023 and a business licenses offering in November 2023.

As we grow our ecosystem, we aim to continue to improve the lifetime value of our customers by maintaining ongoing engagement post-formation and cross-selling our offerings.

We will also continue to strategically partner with leading brands that can improve our partner ecosystem by offering small business solutions outside of our core offerings.

Integrate experts.

We aim to provide our customers affordable access to expert advice.

Our expert offerings are higher-cost services that provide professional expertise to our customers as they navigate complicated legal and compliance processes.

Our expert offerings include attorney and CPA “assisted” solutions alongside our “do it yourself” offerings for legal, compliance and tax and personal needs.

We intend to continue to expand our professional-assisted offerings to complement our technology-enabled solutions and provide more value-added services to both our consumer and small business customers.

We aim to increase the consumption of our expert offerings by existing customers through targeted cross-selling and promotion of our products, as well as by improving the platforms through which our customers and experts interact.

We also aim to attract new customers to our expert offerings by enhancing and creating new top of funnel entry points to these offerings.

For example, our proprietary patent-pending artificial intelligence-powered document summarization tool, Doc Assist, and our newly revamped library of attorney vetted legal forms help drive traffic to our website and promote our expert offerings.

We aim to continue to grow our customer base and retain and expand our customer relationships with the following strategic priorities:

Optimizing Our Subscription Business .

We are prioritizing our subscription products over our transaction products in order to focus on customer lifetime value and to help accelerate and sustain our subscription revenue over the long term.

Our goal is for customers to grow their use of our platform as their businesses evolve and that, in turn, customers increase their cumulative spend with us over time.

We are testing and implementing ways to better reorient our products towards subscription offerings.

We are also continuing to optimize our product line-up with the goal of improving the quality of our subscriber base.

This includes enhancing the value of our subscription products and increasing the price of certain of our LegalZoom branded offerings to better reflect the value we believe we provide.

In addition, our recent acquisition of Formation Nation, Inc., or Formation Nation, will allow us to drive cross-sell opportunities of our complementary ecosystems of legal and business services.

See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for additional information regarding our acquisition of Formation Nation.

Reorienting Our Go-to-Market Strategy .

We are diversifying our customer acquisition strategy, which includes testing a mix of marketing channels with the goal of diversifying our marketing investments across overall brand, small business and consumer customers, and product categories versus our historical focus on business formations.

In addition, we recently acquired Formation Nation, which we believe accelerates our strategy of attracting higher value customers and positioning LegalZoom as a premium brand.

We will leverage Formation Nation’s “Inc Authority” brand, which provides business formation offerings at a lower priced alternative, to service customers seeking “do-it-yourself” solutions, ensuring the appropriate level of service across our customer base and reserving the LegalZoom brand for more premium offerings.

In addition, through this acquisition, we are reinvesting in our sales capabilities, which will include leveraging Formation Nation’s

best-in-class customer service team to improve our cross-selling, up-selling, bundling, and packaging to our customers.

Further, we intend to continue to strategically partner with leading brands that can improve our partner ecosystem by offering small business and consumer solutions outside of our core offerings.

Leveraging Artificial Intelligence to Deliver Expertise to Our Customers .

We will further invest in artificial intelligence in an effort to drive growth and efficiencies in our business and to improve our customer experience.

We also aim to better leverage artificial intelligence into our solutions to promote the value and services of our attorney network, given artificial intelligence cannot provide direct legal advice.

Our Products and Services

Our transaction products and subscription services are designed to support the legal, compliance, and business management needs of small businesses and consumers.

We continue to evaluate new ways to commercialize both our transaction and subscription offerings, which may include the bundling of certain of our products and offering certain of our historical transaction offerings as subscriptions.

Transaction products

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Patent Application

Business and Personal Tax Preparation

Consumer, Estate Planning and Other

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Subscription services

At December 31, 2023, we h ad over 1.5 million subscription units outstanding.

At December 31, 2024, we h ad approximately 1.8 million subscription units outstanding.

Our subscription agreements generally have annual terms, while some have monthly terms.

Our primary subscription services

are listed in the following table, and a more detailed description of certain of our subscription services is provided below:

Our primary subscription services are listed in the following table, and a more detailed description of certain of our subscription services is provided below:

Small Business Subscriptions Consumer Subscriptions

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Attorney Advice through our Legal Plans

Tax Advice & Preparation

Virtual Mail and Check Deposit Services

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Compliance subscriptions .

Our compliance subscriptions provide assistance with state-mandated regulatory filings, such as corporate annual reports that are required to keep a business entity in good standing, as well as certain federally-mandated filings, such as the beneficial ownership information report required as of January 2024 by the U.S.

Federal Crimes Enforcement Network.

Our compliance subscriptions provide assistance with state-mandated regulatory filings, such as corporate annual reports that are required to keep a business entity in good standing.

These compliance subscription plans also monitor the status of our customers’ businesses with certain state agencies to help customers stay abreast of important deadlines and to provide alerts to notify them if their business falls out of good standing.

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We also offer attorney advice subscription packages that include other benefits, such as the ability to edit and electronically sign forms from our attorney-drafted legal forms library, discounts on additional legal services offered by the network attorney, and, in some cases, an annual checkup with the network attorney for estate planning purposes.

Tax subscriptions .

Our LegalZoom-fulfilled tax subscription, or LZ Tax, includes tax preparation and advice from a tax expert, either a CPA or an enrolled agent, on essential tax matters at both state and federal levels.

Our services include unlimited calls and messages with a tax expert, advice on self and employee payments and deductions, access to our LZ Books accounting solution, quarterly tax estimates and federal extensions.

Virtual mail subscriptions.

The rise of the gig economy and the increase in remote work have resulted in an increasing number of small businesses operating out of a home or personal address.

Our virtual mail subscription, or LZ Virtual Mail, protects our customers’ personal information by providing an independent business address.

The rise of the gig economy and remote work have resulted in an increasing number of small businesses operating out of a home or personal address.

Our virtual mail subscription protects our customers’ personal information by providing an independent business address.

It also provides our customers flexibility by allowing them to check their mail from anywhere.

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Robust CRM platform

Our account executives, customer care and sales organization, fulfillment specialists, and tax advisors leverage a multi-channel customer relationship management platform, powered by integrating a variety of tier one contact center technologies.

one contact center technologies.

The platform is integrated within our production and fulfillment systems and enables us to support customers through communications via multiple channels including our websites, email, text, phone, online chat, and our mobile applications.

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and in foreign jurisdictions, as well as pending trademark applications in the U.S.

We have no issued patents, but we have a patent-pending application in the U.S.

and internationally.

We have no issued patents, but we have a patent-pending application that we are pursing in the U.S.

and internationally.

We also license intellectual property from third-parties, such as software used to support our technology and operations.

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Our sales teams also proactively target qualified prospects, such as those who began a questionnaire in our customer experience journey but have yet to purchase.

In addition, we acquired Formation Nation in February 2025, which will allow us to benefit from the immediate onboarding of over 140 seasoned small business service experts.

Human Capital Management

At December 31, 2024, we, together with all our subsidiaries, had 964 employees worldwide.

At December 31, 2023, we also engaged approximately 70 seasonal workers as well as 600 contractors and consultants globally.

At December 31, 2024, we also engaged approximately 600 contractors and consultants globally and no seasonal workers.

None of our employees are represented by a labor union.

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We monitor the state of our employees’ happiness with regular engagement surveys, open feedback forums, and action planning based on results.

We continue to see favorable engagement scores, particularly in overall satisfaction or OSAT, and Net Promoter Score, or NPS, when our employees are asked the likelihood of recommending LegalZoom as a great place to work.

We have remained agile to accommodate the ever-changing needs of our employees since the pandemic.

In 2021, we adopted our remote first model, which required coordinated efforts across the organization to operationalize.

We continue to see positive engagement scores, particularly in overall satisfaction, or OSAT, and Net Promoter Score, or NPS, when our employees are asked the likelihood of recommending LegalZoom as a great place to work.

In 2021, we adopted our remote-first model.

Since then, our strategy has been focused on engaging employees virtually to support working from home by launching virtual productivity and collaboration tools, and driving engagement through virtual events.

We utilize our office locations in Los Angeles, CA, Mountain View, CA, Austin, TX, Beaverton, OR, and Frisco, TX for engagement events, in-person meetings, team offsites, and more to build connection and productivity.

We utilize our office locations in multiple states for engagement events, in-person meetings, team offsites, leadership conferences, and more to build connection and productivity.

This approach has allowed us to build foundational infrastructure and establish a stronger culture both virtually and in-person.

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In 2024, we refreshed our employee recognition program that rewards and provides visibility to our employees’ accomplishments.

We also continue to fuel our organization’s passion for social good, with our employee giving program and tool that provides dollar-for-dollar matching and paid time off for volunteering.

Finally, we continue to engage our employees in in-person and remote social impact and Employee Resource Group events, like our annual Impact Week, where we come together to volunteer, learn about causes, and fundraise.

We also continue to fuel our organization’s passion for social good, with our employee giving program and platform that provides dollar-for-dollar matching and paid time off for volunteering.

We believe we are thriving when every voice is nurtured and heard.

We continue to engage our employees with in-person and social impact events, like our annual Impact Week, where we come together to volunteer, learn about causes, and fundraise.

We have seven employee resource groups today, including Pride Zoomer Alliance Network, Lift Every Voice Black Network, RiseUp Women’s Network, Women in Tech Network, Asian Pacific American Zoomer Association, Nos Unimos LatinX Network, and LZ Veterans, each with dedicated internal funding and executive sponsorship.

These networks, which are open to all employees, have built internal mentorship and development programs, host meaningful and educational events, and have contributed to their broader communities outside of LegalZoom through their initiatives.

In 2024, we remained committed to our principles of taking care of our employees holistically while continuously looking for ways to improve our overall benefits offering.

We offer competitive benefits including:

100% employer-paid medical, travel reimbursement for out-of-state procedures, dental and vision plans, fertility coverage, mental health coverage and workshops, physical wellness, lifestyle benefits, paid-time off,

and 401k match.

In addition, we made a few meaningful enhancements in 2023’s November Open Enrollment for 2024, including extending mental/physical wellness benefits to dependents, increasing flexibility to bonding leave for new parents, additional sick-time off and paid company holidays, as well as enhancing coverage on our dental plans.

We believe we are thriving when every voice is nurtured and heard.

We have seven employee resource groups today, including Pride Zoomer Alliance Network, Lift Every Voice Black Network, RiseUp Women’s Network, Women in Tech Network, Nos Unimos LatinX Network, and LZ Veterans, each with dedicated internal funding, executive sponsorship, and a focus on supporting diversity, equity, and inclusion within and outside of LegalZoom.

These networks have built internal mentorship and development programs, host meaningful and educational events, and have contributed to their broader communities outside of LegalZoom through their initiatives.

Government Regulation

We operate in a particularly complex legal and regulatory environment.

We are subject to a wide variety of state and federal laws, rules and regulations in the U.S., including those related to internet activities, UPL, the corporate practice of law, or CPL, privacy, data protection, cybersecurity, data retention, consumer protection, content regulation, the processing of legal documents, commercial registered agents, the provision of online payment services and other matters, which are continuously evolving and developing.

We are subject to a wide variety of state and federal laws, rules and regulations in the U.S., including those related to internet activities, UPL, the corporate practice of law, or CPL, privacy, data protection, cybersecurity, data retention, consumer protection, content regulation, subscription offerings, virtual mail, the processing of legal documents, commercial registered agents, the provision of online payment services and other matters, which are continuously evolving and developing.

Our business model includes the provision of services that represent an alternative to traditional legal services, which has subjected us to allegations of UPL in the U.S.

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The regulatory environment in the U.S.

is evolving slowly with two states so far, Arizona and Utah, approving regulatory reform that permits non-lawyers to co-own law firms and other legal service operations.

is evolving slowly with only a few states approving regulatory reform that permits non-lawyers to co-own law firms and other legal service operations.

We received a license to operate one of our U.S.

subsidiaries as an ABS in Arizona in September 2021.

This Arizona ABS employs and contracts with licensed attorneys to provide limited scope legal services to U.S.-based consumers who purchase such services on our websites.

This Arizona ABS employs and contracts with licensed attorneys to provide limited scope legal services to U.S.-based consumers who

purchase such services on our websites.

While we believe this ABS structure is legally permissible, it is generally untested in U.S.

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These laws and regulations are regularly evolving and tested in courts, and may be interpreted, applied, created, or amended, in a manner that could harm our business.

In addition, we are subject to numerous foreign and domestic laws, regulations, and standards regarding privacy and data security governing the personal information and other data that we may collect, store, use, or process.

Such privacy and data security laws and regulations, including with respect to the European Union's General Data Protection Regulation and the California Consumer Privacy Act of 2018, and the interpretation and enforcement of such laws and regulations, are continuously developing and evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may evolve and the costs and complexity of future compliance.

Such privacy and data security laws and regulations, as well as the interpretation and enforcement of such laws and regulations, are continuously developing and evolving and there is significant uncertainty with respect to how compliance with these laws and regulations may evolve and the costs and complexity of future compliance.

Our compliance with applicable government laws and regulations is not expected to materially affect our earnings or competitive position or result in material capital expenditures.

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Corporate and Other Information

We are headquartered in Glendale, California.

We are headquartered in Mountain View, California.

We were incorporated as a California corporation in July 1999 and converted to a Delaware corporation in February 2007.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business