LegalZoom Reaches Settlement In Class Action Lawsuit

The online company LegalZoom has reached a settlement with plaintiffs regarding a class action lawsuit filed in Missouri.  LegalZoom.com is one of the largest online legal document preparation services and frequently provides estate planning, business formation, and intellectual property documents to customers across the United States.  The plaintiffs, all Missouri residents, argued that the company violated Missouri’s unauthorized practice of law statute when it sold them legal documents generated on its website.  They also claim that the company violated Missouri’s Merchandising Practices Act by enticing customers to buy its services with false representations about their legality and validity.

Although LegalZoom attempted to argue that its products were merely of the “do-it-yourself” variety, a Missouri federal court opined that LegalZoom’s service goes beyond self-help because of the role played by its employees, who check each questionnaire for completeness and consistency of information, are not authorized to practice law, and may be “incompetent or unreliable persons.”  The court also noted that a reasonable juror could find that LegalZoom’s computerized “decision tree” software, which drafts legal documents based on the responses that a customer types into an online questionnaire, is a legal document preparation service and therefore that the company is engaged in the unauthorized practice of law.

Although the details of the settlement are still being worked out, they may ultimately be similar to an earlier settlement LegalZoom reached with the Washington Attorney General’s office wherein the company agreed not to compare its costs to attorneys’ fees unless the company clearly discloses that its service are not a substitute for retaining a law firm and further agreed not to provide individualized legal advice about self-help forms.  The settlement may also include compensation to Missouri LegalZoom customers.

LegalZoom publicly acknowledges that it is not a law firm and is not a substitute for an attorney or law firm, while at the same time providing generic “client” testimonials and celebrity endorsements that lull their customers into a false sense of security regarding the validity of do-it-yourself estate planning.  Attorneys do more than simply draft estate planning documents.  They advise their clients on the best way to protect their family, plan for their future, and preserve and distribute their assets according to their wishes.  Perhaps even more importantly, attorneys spot problems in proposed estate plans and assist in finding workable solutions that will accomplish the individual’s goals without affecting the documents legal validity or leading to harsh unintended consequences.  This is why it is important to consult with a knowledgeable estate planning attorney, rather than resorting to self-help online companies that cannot offer this level of attention to detail.

If you are looking to establish a cost-efficient professionally drafted Florida estate plan, contact an Attorney in Jacksonville to see how we can assist you today.