LegalZoom Sued For Unauthorized Practice Of Law In State That Still Recognizes Alina Habba
Didn't we sort out all the LegalZoom cases years ago?
“Access to justice” conversations generally veer toward indigent clients unable to get a lawyer. And while that’s obviously the site of greatest need, skyrocketing legal expenses have created a mid-tier justice gap of lower-middle to middle-class clients who eschew important legal services because they can’t lay out the money. It’s a growing problem, but it’s also a problem that companies like LegalZoom help to alleviate by providing lawyer-vetted models for document filings and then access to lawyers if the client’s problems require, all at a much lower price point.
Now a lawyer in New Jersey has brought a class action against LegalZoom alleging that it’s engaged in the unauthorized practice of law in the state. From the New Jersey Law Journal:
LegalZoom allegedly engages in the unauthorized practice of law because it does not fit the statutory definition of a professional service corporation and because its owners include nonlawyers, according to the complaint.
In addition, LegalZoom allegedly offers and provides legal services to clients, and manages the compliance-related filing of documents and performs other functions that can be defined as the practice of law, the suit claims.
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As to the latter claim, LegalZoom has litigated this question for years, reaching agreements in multiple states. At this juncture, its marketing materials are pretty tight when it comes to representing when it is and is not actually dispensing legal advice. This case would need to prove that reasonable consumers are duped into thinking they’re hiring an attorney when they select the option that literally says the user plans to do “the work myself” as opposed to the option that says “I want advice from experienced attorneys.”
Not the lightest of lifts.
The former claim about company ownership is more interesting if fundamentally stupid. LegalZoom is a publicly traded company and therefore its “owners” aren’t all lawyers, trigging the archaic and protectionist rule that law firms must be owned exclusively by lawyers. Arizona has already abandoned this and joined the rest of the world on this score.
Biglaw firms have reason to fear the Big 4 Accounting firms jumping into the legal industry in the US without this restriction, but the international experience hasn’t been so bad. Obviously no one wants to see private equity take over law and turn it into the next Red Lobster, but without welcoming structures like LegalZoom, there’s going to be an ever-expanding zone of unserved clients.
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NJ Law Journal spoke with Robert Jarvis, a professor at the Nova Southeastern University Shepard Broad Law Center, who noted:
“At this point, especially with the introduction of AI, LegalZoom is now quaint, almost horse-and-buggy stuff when AI can sit there and write a brief. It can’t do it very well yet, but it’s going to do it very well. And the legal profession is a very conservative, traditional profession that adopts new technology very, very slowly,” Jarvis said.
Artificial life is coming at you fast.
Meanwhile, Garden State… mind your own garden.
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LegalZoom Sued for Alleged Unauthorized Practice of Law [NJ Law Journal]
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
