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United States securities and exchange commission logo
March 22, 2023
Noel Watson
Chief Financial Officer
Legalzoom.com, Inc.
101 N. Brand Boulevard
11th Floor
Glendale, CA 91203
Re: Legalzoom.com, Inc.
Form 10-K for the
year ended December 31, 2022
File No. 001-35618
Dear Noel Watson:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the year ended December 31, 2022
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Key Business Metrics, page 33
1. We note that you aim to
continue to grow subscription units, in part, by improving
retention rates. We
also note your risk factor disclosure on page 8, which highlights the
importance of
converting customers to subscriptions, retaining existing customers and
renewing subscriptions
to maintaining and improving your operating results. In your
response to prior
comment 9 from your May 18, 2021 letter, you indicated that
management believed
annual retention rate is the most relevant metric for investors to
assess the company's
effectiveness in retaining its subscription base. However, we note
that you have removed
the discussion of annual retention rate from your filing. Please
explain why you removed
this measure. Tell us what retention, expansion or conversion
measure(s) you
currently use to evaluate your subscription business and revise to include a
quantified discussion
of such measure(s). Refer to SEC Release No. 33-10751.
Noel Watson
Legalzoom.com, Inc.
March 22, 2023
Page 2
Results of Operations, page 38
2. We note that you provide the impact of volume (i.e. average number of
subscription units
and number of transactions) and price (i.e. ARPU and average order
value) on your
subscription and transaction revenue. You also qualitatively discuss
various factors that
impacted the volume and price metrics for each revenue stream, a
portion of which relates
to the Earth Class Mail acquisition in fiscal 2021. Please revise to
also include a
quantified discussion of the various factors, including any offsetting
factors, that
impacted your revenue and/or the supporting metrics disclosed. Refer
to Item 303(b) of
Regulation S-K.
Notes to Consolidated Financial Statements
Note 14. Commitments and Contingencies, page 82
3. Please revise to disclose that an accrual has not been recorded
related to the April 2020
legal proceeding because the likelihood of loss is not both probable
and reasonably
estimable. Additionally, given there is at least a reasonable
possibility of loss, revise to
disclose either an estimate of the reasonably possible loss or range
of loss, or include a
statement that such an estimate cannot be made. We refer you to your
responses to prior
comments 16 and 10 from your letters dated May 17, 2021 and June 4,
2021, respectively,
as well as the guidance ASC 450-20-25-2 and 450-20-50-3 and 50-4.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Brittany Ebbertt, Senior Staff Accountant, at
202-551-3572 or Kathleen
Collins, Accounting Branch Chief, at 202-551-3499 with any questions.
FirstName LastNameNoel Watson Sincerely,
Comapany NameLegalzoom.com, Inc.
Division of
Corporation Finance
March 22, 2023 Page 2 Office of
Technology
FirstName LastName