LegalZoom Ordered to Cease Comparing its Fees to Attorneys’ Fees
Washington State’s Attorney General has entered into a settlement agreement with LegalZoom, requiring that LegalZoom cease comparing its fees to attorneys’ fees unless the company clearly discloses that its service isn’t a substitute for a law firm. The agreement also prohibits LegalZoom from engaging in the unauthorized practice of law, selling personal information obtained from Washington customers or misrepresenting the benefits of any estate distribution agreement. LegalZoom is also the subject of a class action suit in Missouri for the unauthorized practice of law.
This action has been a long time coming, but much of the damage to solos and small law firms has already been done, as LegalZoom, with its substantial venture capital backing, has already imprinted itself on the minds of America’s middle class consumers that it offers a better alternative that seeking the advice of an attorney.
Even Polaris Investors – the VC firm that backs LegalZoom – claims on its web site that:
“Legalzoom is the nation’s largest online legal service center. The company helps its consumer and small business customers quickly and affordably create estate planning documents, form businesses, and protect valuable intellectual property such as trademarks and provisional patents through their easy-to-use website thus avoiding costly attorney fees.” (Our emphasis).
There is a value in having non-lawyer, trained paralegals assist consumers in completing legal forms, but LegalZoom‘s consumer practices have set this reform movement back. If an attorney claimed that his practice, “put the law on your side,” as Robert Shapiro of OJ fame has done on every Cable-TV channel, that lawyer would probably be subject to disciplinary action for an advertising claim that is a material misrepresentation.
It is time to level the playing field by requiring LegalZoom to disclose clearly the limitations of the services it provides.
Other State Attorney General’s with responsibility for enforcing consumer protection legislation should take notice.
[thanks to richard granat via cc]
Top 5 Ways to Deal With Police Officers Safely & Effectively
I have had more opportunities to deal with police officers than most people, both as a collaborator on certain justice initiatives, as an adversary defending clients, and as a motorist with a penchant for fast cars. I also have several friends “on the job” (I’ve been watching Law & Order) with whom I’ve had many interesting conversations about policing, justice, and civil rights. They might call me a sleazebag who works to keep criminals on the street, and I might call them unwitting tools of an oppressive state, but at the end of the day we have a mutual respect and understand the role that each other has to play in our system.
As of today, there’s one more police officer in my Blackberry contacts list – a long time friend of mine graduated from RCMP training yesterday and is now packing heat and flashing tin (that’s more great TV cop show lingo). I’m sure he’s going to make an excellent officer and serve the community well, and I offer him my sincerest congratulations.
In honor of this occasion, I offer my readers my top five tips for dealing with police officers. Whether at a routine traffic stop, as a witness to a crime, or even as a suspect, there’s a good chance that at some point you’ll have to interact with law enforcement – here’s how to make sure that interaction is safe and uneventful for everyone involved.
- Be polite. The overwhelming majority of police officers are good, honest people just doing their job. Be polite and respectful, and know that yes sir, no sir, please and thank you will go a long way. Don’t talk back, don’t get confrontational, and don’t be rude. If an officer is considering giving you a ticket (or worse), arguing and yelling isn’t going to change his mind. Police spend an inordinate amount of time dealing with scumbags who treat them with utter disdain- don’t be one of those people.
- Don’t give him reason to be nervous. Every police officer has a gun and knows how to use it. Every police officer has also been trained to react quickly and decisively to threatening situations, and to be constantly on the lookout for potential threats. I once got called home after the alarm went off at my house, and the alarm company had automatically called the police as well. The officer must have showed up just after I did, because as I was going towards my patio door to check it from the inside, he was approaching from the outside. I’m not sure who frightened who more; I jumped and shrieked like a girl, he reached for his weapon. A few seconds later we laughed about it as I excused myself to change my underwear. The moral? Don’t be jumpy, don’t make unexpected movements, and keep your hands in plain view. A relaxed and comfortable police officer is much less likely to taser your twitchy ass.
- Don’t think you’re smarter than the police officer. You might be smarter, you might not, but keep in mind that it is the officer’s job to pick up on lies and I can assure you that an officer can sniff out bullshit better than you can lie. Don’t try to be cute or a smartass- it’s not going to get you anywhere, or at least not anywhere that you actually want to go.
- Know when to shut up. So if you can’t outsmart a cop, what can you do? Shut up, that’s what. No matter what a police officer tells you, no matter what promises are made or how much pressure gets puts on you, no matter how innocent you are, you are under absolutely no obligation whatsoever to talk to an officer, to make any sort of statement, or to answer any question. Police are very skilled at extracting the information they want, and even an innocuous line of questioning could be much more serious than you realize. If you think you might be in trouble, shut your mouth, call your lawyer, and don’t say a single word until he or she arrives. Don’t even accept an offer of a coffee while you wait – police coffee is the absolute worst. And possibly poisoned.
- Know your rights. While it’s important to be reasonably polite when dealing with the police, it’s equally important to know your rights. That includes the right to keep quiet, the right to refuse a request to search your belongings, your car or your house, and the right to walk away if you’re not being detained. When I offer this type of advice, I often get the folksy response “If you didn’t do anything wrong, you’ve got nothing to worry about.” That’s just not true- you’ve got plenty to worry about, as miscarriages of justice do happen. You’ve also got the right to take a principled stand against unwarranted state intrusions on the lives of its citizens. Understand your rights and be willing to exercise them.
Keep your noses clean, folks!
[thanks to kashklick and money grubbing lawyer via cc]
LegalZoom Sued for Unlawful Practice of Law in Missouri
LegalZoom is being sued in Missouri on the grounds of unauthorized practice of law and the plaintiff’s are requesting class certification. To give an example of how popular LegalZoom‘s services have become, LegalZoom in its petition for removal to Federal court claims that it has served over 14,000 Missouri residents in a five year period, generating over $5,000.000 in sales. Missouri is a relatively small state, so you can get some idea of what kind of business LegalZoom is doing nationwide. No wonder the legal profession is getting nervous and starting to pay attention to this disruptive player in the legal industry.
A good discussion of the case can be found on the IPWatchdog Blog in an article by the Blog’s Founder Gene Quinn and at 95years.
Click here for a copy of the Missouri Complaint, LegalZoom‘s petition for removal to Federal court, and a copy of a letter from the North Carolina Bar requesting that LegalZoom Cease and Desist from operating within North Carolina because it is violating North Carolina’s UPL statute when it prepares incorporation papers.
In its defense, LegalZoom in its removal petition, claims that it is:
“a company whose principal business consists of providing an online platform for customers to prepare their own legal documents. Customers choose a product or service suitable to their needs and input data into a questionnaire. Where applicable, the LegalZoom platform then generates a document using the product and data provided by the customer.”
It this were the case, LegalZoom would be functioning only as a “scrivener” transcribing the client’s information into a form. It is well established in some states, including California, where LegalZoom is based, and also Florida for example, that non-lawyers, often called “legal technicians” can help consumers prepare legal documents, as long as they don’t give legal advice.
The question of whether LegalZoom‘s staff do more than they say, and actually provide legal advice, even if it is limited legal advice, is a question of fact to be determined. It would be interesting to see what the discovery process turns up and what the LegalZoom, “platform” actually does and how it works.
For comparison, We the People, a retail chain of 35 “Legal Document Preparation stores operating in six states, operates under the same principles. Customers complete paper questionnaires which are faxed to a central processing center where a technician simply inserts the client’s data into a desktop document assembly program which generates a form. (This is the same process that many lawyer’s use, except lawyers provide legal advice and analysis). This document preparation process is essentially the same as LegalZoom‘s except that it takes place off the Internet through a network of retail stores. We the People has been attacked by the Bar in several states for UPL, but the company has worked hard to assure bar authorities that its staff and franchisees don’t provide legal advice.
In theory, We the People, stores are able to reach a market of customers that do not have Internet access and prefer to deal with a human being directly. This market base is likely to have even lower incomes, and ignored by both attorneys as a target market, and have too much income to qualify for legal aid. Ironically, however, the We the People pricing is even higher than the LegalZoom pricing, probably because of the cost of maintaining a retail location. Yet the remaining We the People stores, ( down from a high of 140 stores), seem to be sustainable, if not thriving.
Both companies provide a needed service in the sense that they provide an alternative to consumers who are willing to invest their own time and resources to make sure that the forms offered are the correct forms for their particular situation. Neither company can advise a consumer about what form they should use for their situation, as that would be a form of legal advice. Consumers may be taking a risk when they buy from a self-help document preparation forms company, but it seems this is a risk that consumers are willing to take to avoid what are perceived by many as high legal fees for the same transaction. For these consumers, what they get is a “good enough” result at a price they can afford.
The other reality is that it is deceptive for LegalZoom and We the People , to claim that using their services will save hundreds or thousands of dollars in legal fees, when two very different category of services are being compared:
- one a legal information service;
- and the other a true legal service from a licensed attorney.
The content of the services are fundamentally different and to compare the services to each other is like comparing “apples’ and ” oranges”.
Sometimes you get the same legal result when you use a document preparation service, but often you don’t. Apart from UPL issues, it seems to me that this is a misrepresentation in advertising and these claims should receive closer scrutiny from state consumer protection agencies. (Although I am sure that many of LegalZoom‘s satisfied customers would say that they don’t need any protection).
Both companies demonstrate the principle that you can solve certain legal problems by having access to “legal information.” Legal information by itself is a problem solver for many consumers, and the access to legal information and legal forms on the Internet, has simply accelerated this trend at a much faster rate in the last five years than the self-help law book industry has been able to accomplish in 30-35 years of its existence. This means that lawyers will have to do more to demonstrate their value to the consumer, particularly solos and smaller law firms that serve the broad middle class.
A better solution for consumers, as we have advocated in these pages, is for attorneys to offer legal forms bundled with legal advice at an affordable price, perhaps slightly higher than LegalZoom, but offering much greater value, over the Internet. This is often called “unbundled legal services,” enabling a consumer to purchase just the legal services they need, and no more.
Using virtual law firm technology, like DirectLaw’s virtual law firm platform, lawyers can be even more efficient that the LegalZoom or We the People models, because the entire document assembly process is software driven creating a legal document instantly from the user’s input, ready for the lawyers further review, drafting, and advice-giving. The increased productivity that results from a web-enabled document automation process enables the lawyer to offer a very price competitive service that in fact offers more value. The value of each sale is lower, from the attorney’s point of view, but volume can be much higher if effectively marketed. (Neither LegalZoom nor We the People have such a technology in place. No wonder their prices are so high for what you get!).
As long as the legal document preparers don’t give legal advice, they should be able to coexist with the legal profession, for certain kinds of common legal transactions, but not all.
But lawyers will have to work harder to provide their value and start offering true legal services online over the Internet. Driving non-lawyer legal document preparers out of business on UPL grounds is not an answer. At the end of the day prosecution efforts, will seem to the consuming public as just another attempt by the legal profession to maintain high legal fees for common transactions, while avoiding the cost of innovation.
[thanks to neubie and richard granat via cc]
