LegalZoom Proceeds Against North Carolina State Bar

08/30/12

On Monday, LegalZoom Inc received approval from court to proceed against the North Carolina State Bar in a lawsuit claiming that the Bar exceeded its authority by refusing to register the Internet company’s subscription legal plans. The North Carolina State Bar’s motion to dismiss the lawsuit was rejected by Special Superior Court Judge James Gale in Greensboro, North Carolina. However, the bigger question in the case, whether LegalZoom is engaged in the unauthorized practice of law, remains unresolved and reserved for a later ruling.

The dispute between the North Carolina Bar and LegalZoom began in 2008, when the bar for the first time sent a cease-and-desist letter to the company claiming conduct that was “illegal in North Carolina and must end immediately.” However, the letter was not followed up with any other action. In 2010, LegalZoom wanted to register if we paid legal service plan, which the State bar declined. In response to the refusal by the North Carolina State Bar to register its legal service plan
LegalZoom sued.

All in the last week in the last month in the last 3 months in the last 6 months in the last year

Search Career Advice

LegalZoom, which had $156 million in revenue last year, has faced at least five class actions in recent years for engaging in unauthorized practice of law.

In a statement issued by the company, Chas Rampenthal, the general counsel of LegalZoom, said the decision would allow the company to proceed with its case. Rampenthal said, “We look forward to the day when the interests of one small group of people -- attorneys in North Carolina -- are not put above the interests of the many citizens of North Carolina who are allowed by law to create their own legal documents or purchase prepaid legal service plans.”

• Search Legal Jobs
• Search Articles
• Employer Listing

United States

Search jobs

All in the last week in the last month in the last 3 months in the last 6 months in the last year

Search Career Advice

Select In-House Law Firms Government Recruiters Public Interest

Search Employer

LegalZoom’s business stand, however, has been succinctly pointed out in a previous ruling in a similar matter against the company in Missouri. In that case, the court observed

“That Defendant’s legal document service is delivered though the intemet is not the problem. The intemet is merely a medium, and LegalZoom’s sale of blank forms over the intemet does not constitute the unauthorized practice of law. Nor would LegalZoom be engaging in the unauthorized practice of law if it sold general instructions to accompany those blank forms over the Internet (as may already be the case).

LegalZoom’s legal document preparation service goes beyond self-help because of the role played by its human employees, not because of the internet medium LegalZoom employees intervene at numerous stages of the so-called “self-help services.””

The NC case is LegalZoom.com, Inc v. The North Carolina State Bar, Wake County Superior Court, North Carolina, No. 11 CVS 15111.