02 Aug LegalZoom: Affordable Legal Access or Unauthorized Law Practice?

In 2001, a group led by OJ Simpson trial attorney Robert Shapiro tried something new. An online site for average folks to inexpensively access legal documents, form a business or make a will. Today LegalZoom is apparently over a $100 million a year business, according to the ABA Journal. Millions of users. But a number of US states have sued them, claiming their site constitutes the unauthorized practice of law. The states’ argument: they don’t just provide forms. They have software that helps people fill them out, and they have people who review the forms for things like spelling or to make sure they completed the whole form. LegalZoom says none of that is legal advice. Frankly I think they are right. And they have tons of disclaimers on the site reminding you to use an attorney if you’re not sure. They even now have prepaid legal services plans so you can access a lawyer affordably. In general they have fought back the attempts by the states to shut them down. A few months ago South Carolina gave the company the go-ahead. Other cases have been dismissed and a few are still pending.

The state groups that bring these cases are run by lawyers. They tend to want to protect lawyers from folks taking money away from them. But some of their concern is valid. I worry, for example, that while it is easy to form a corporation or LLC, the key advice we often assist with as lawyers is whether a business should be an LLC, corporation, sole proprietorship or the like. Then yes, a paralegal can do the rest. But if middle-class Americans or cost-conscious new entrepreneurs are worried about the cost, and want to go ahead and exercise their right to form an entity without this advice, why not make it easy for them? States should monitor the LegalZooms but allow them to work and flourish.

We are moving more towards the medical model, where routine legal matters are handled almost exclusively by non-lawyers. A lawyer friend does real estate closings for people buying houses and apartments. Ninety percent of the work is done by experienced paralegals. The lawyer reviews the title information and leaves the rest to others. We lawyers should help de-mystify these things, eliminate Latin from law stuff and allow greater access to self-help when it comes to legal matters.