Business of Law

LegalZoom Sues North Carolina State Bar, Seeks to Register Legal Services Plan


The online legal document company LegalZoom has sued the North Carolina State Bar in an effort to gain registration for its legal services plan.

The suit also seeks a ruling that its business model doesn’t constitute the unauthorized practice of law, according to a press release and the Raleigh News & Observer.

The bar had issued a cease-and-desist letter to Legal Zoom in 2008, and later cited the letter when it refused to register the company’s legal services plan.

The News & Observer quotes LegalZoom’s Raleigh lawyer A.P. Carlton Jr., a former ABA president. “This is the first time in their history they have filed a lawsuit,” Carlton said of his client. “They did not want to do this, but after being rebuffed at every turn, they had to take a look at their options from a business perspective. What this lawsuit is about is the principle of being able to engage in business in North Carolina free of unlawful government restraint.”

LegalZoom has also encountered legal problems in other states. In August, the company said it agreed to make certain business modifications in a proposed settlement of a Missouri class action, but it did not disclose the specifics.

Last year, the company reached a settlement with the attorney general’s office in Washington state that bars the company from providing individualized advice about the preparation of self-help forms. The deal also barred the company from comparing its document costs to attorney fees unless it discloses that its service isn’t a substitute for a law firm.

An Alabama bar group has filed a suit that seeks to prevent LegalZoom from doing business in that state.

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