LegalZoom.com, an online provider of legal services in the US, filed on Friday with the SEC to raise up to $120 million in an initial public offering. The Glendale, CA-based company allows consumers and small businesses to access a variety of interactive legal documents, including wills, livings trusts and powers of attorney. For a subscription, LegalZoom also connects customers to its network of attorneys.
LegalZoom has served approximately two million customers in the past 10 years. In 2011, revenue increased 29% to $156 million and net income swung positive to $12 million. Gross margin improved from 50% to 52%. Ironically, the company lists litigation as its primary risk factor and it recorded $5.4 million in settlement costs in 2010. In the past year, four new lawsuits, all alleging that LegalZoom engages in the unauthorized practice of law, have been filed in Alabama, Ohio, Arkansas and South Carolina.
LegalZoom, which was founded in 1999, plans to list on the NYSE under the symbol LGZ. Venture capital firms Polaris Venture Partners and Institutional Venture Partners hold 35% and 15% of shares, respectively, prior to the offering. Morgan Stanley and BofA Merrill Lynch are the joint bookrunners on the deal.
