South Carolina Supreme Court – LegalZoom Not Engaged In Unauthorized Practice of Law

April 28th, 2014

ABA Journal has the report:

LegalZoom, the purveyor of online interactive self-help legal documents, announced in a press release this week that the South Carolina Supreme Court has approved the company’s business practices, which have been challenged in a number of state courts as unauthorized practice of law.

According to a report (PDF) by the state supreme court’s referee handling the case, LegalZoom was offering interactive self-help documents that were like ones already offered by various state and local agencies. Though the company basically was found to be operating properly under South Carolina law, it agreed to pay the plaintiff’s lawyers $500,000 in settling the matter. …

Interestingly, the Court stressed that LegalZoom provides no “judgment or discretion” and blindly fills in the forms:

The underlying report and recommendations for the agreement and order noted that, according to an affidavit by one South Carolina attorney, of 20 practice areas encompassed by LegalZoom’s document service, for 19 of them the same basic services “are available online to South Carolina citizens (and the public at large) via other self-help portals at websites maintained by various South Carolina governmental agencies.”

Only the document service’s Pet Protection Agreement is not.

The report determined that LegalZoom’s self-help documents do not provide legal advice, and the company does not provide legal assistance to its customers in creating the document, and thus do not engage in the unauthorized practice of law.

“LegalZoom’s software acts at the specific instruction of the customer and records the customer’s original information verbatim, exactly as it is provided by the customer,” Newman wrote in the report, adding that its “does not exercise any judgment or discretion, but operates automatically in the same fashion as a ‘mail merge’ program.”

Here is the South Carolina Supreme Court’s report:

3 Geeks and a Law has more:

This morning, LegalZoom launched a press release that announced that the South Carolina Supreme Court approved of their business model and that its services of providing legal forms for individual citizens to use is not the unorthorized practice of law. The original lawsuit of T. Travis Medlock v. LegalZoom, Inc. brought the action requesting declaratory relief, injunctive relief and disgorgement of revenues, among other measures. This isn’t the only UPL action that LegalZoom is facing, according to their SEC Filing, they are fighting UPL claims in Alabama, Ohio, Arkansas, Missouri, and North Carolina.