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Wash. AG’s Settlement with LegalZoom Bars Fee Comparisons Absent Disclosure

Posted Sep 21, 2010 8:06 AM CDT
By Debra Cassens Weiss

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The attorney general’s office in Washington state is requiring the do-it-yourself document service LegalZoom to be a little more cautious when making cost comparisons.

A settlement bars the company from comparing its document costs to attorney fees unless it discloses that its service isn’t a substitute for a law firm, a press release says.

In an “assurance of discontinuance,” LegalZoom also promises to refrain from:

• Failing to offer estate-planning forms that conform to Washington law.

• Engaging in the unauthorized practice of law by providing individualized legal advice about a self-help form.

• Selling consumer information to third parties, unless they are given a chance to opt in.

LegalZoom did not admit that it engaged in any of the described acts. However, the press release says the attorney general’s office was concerned about LegalZoom’s estate-planning documents, which didn’t include a community property agreement form. The document is often combined with a simple will to avoid probate when there is a surviving spouse, the press release says.

Writing at his eLawyering blog, ABA Journal legal rebel Richard Granat says other state attorneys general should take notice. He sees value in having trained paralegals help consumers complete legal forms, but he doesn’t like LegalZoom’s promise that it will “put the law on your side.”

“It is time to level the playing field by requiring LegalZoom to disclose clearly the limitations of the services it provides,” he writes.

Related coverage:

ABAJournal.com: “We the Pauper”

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