LegalZoom faces court battle over business
Posted November 25, 2011
Updated November 26, 2011
LegalZoom has built a business on offering legal documents via the Internet to those who need to write a will or incorporate a business. It is marketed to those who don't want to pay attorney fees, and that is a problem for the North Carolina State Bar.
The state bar, which regulates lawyers and their activities in the state, asked LegalZoom to cease and desist, claiming the company is offering legal advice without a license.
Raleigh attorney A.P. Carlton, who represents LegalZoom, defends the company and points out the disclaimer on all LegalZoom ads. On the company website, it reads, "The information provided in this site is not legal advice, but general information on legal issues commonly encountered. LegalZoom is not a law firm and is not a substitute for an attorney or law firm."
Carlton says, "This is self help. This is like over-the-counter teeth whiteners. It provides low and moderate income consumers with an alternative."
LegalZoom filed suit accusing the North Carolina State Bar of unfairly trying to weed out competition.
"We think they've gone beyond the scope of their statutory authority to regulate, which has the effect of excluding LegalZoom from its legal business," Carlton said.
Attorney Karl Knudsen is not directly involved in the case, but he can see the conflict.
"They say they're not providing legal services when they are," he said.
"It says, 'We're not giving you advice. We're not responsible. If this goes bad, it's on your head and not ours. But, oh by the way, please give us your money.'
"You can call a pig a dog a hundred times, but it's still a pig," Knudsen said.
The state bar has until Dec. 5 to respond to the company's lawsuit.