Posted Oct 24, 2013 05:03 pm CDT
Customers who claim LegalZoom’s document-preparation services amount to the unauthorized practice of law won’t be able to take their case before a judge.
The Arkansas Supreme Court ruled earlier this month that a mandatory arbitration clause in LegalZoom’s customer agreement must be enforced, the ABA/BNA Lawyers’ Manual on Professional Conduct reports. The ruling (PDF) reverses a judge’s decision that arbitration would encroach on “the exclusive jurisdiction of the state courts to determine whether or not something constitutes unauthorized practice of law.”
LegalZoom’s troubles may not be over, however. Although the court ruled for LegalZoom on its bid to compel arbitration, “the arbitration clause does not usurp the regulatory authority of our Committee on the Unauthorized Practice of Law,” the court said.
“Given that the circumstances of this case involve allegations of the unauthorized practice of law, we hereby direct the clerk to forward a copy of this opinion to the Arkansas Supreme Court Committee on the Unauthorized Practice of Law.”
The class action suit was filed in January 2012 by Jonathan McIllwain, who paid $98.95 for a last will and testament. He claimed the company’s unauthorized practice of law amounted to a violation of the state’s deceptive trade practices law, and the company was unjustly enriched by charging for conduct that is “per se illegal.”
LegalZoom has faced similar class actions in other states; some are still pending, the ABA/BNA story says.