Business of Law

Online interactive legal documents would be legal in North Carolina under bill passed by legislature

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North Carolina lawmakers have passed a bill that amends the state’s definition of law practice to permit websites that offer interactive legal documents.

House Bill 436 (PDF) won unanimous approval last week, ending a long-running dispute with LegalZoom, WRAL reports. The bill was forwarded to Gov. Pat McCrory on Tuesday, according to the legislature’s website.

The bill says the practice of law does not include websites offering interactive software that generates a legal document based on the consumer’s answers to legal questions. The bill adds several restrictions, including these:

• The website provider may not disclaim any warranties or liability, and may not limit the recovery of damages or other remedies by the consumer.

• A licensed North Carolina lawyer must review the blank document.

• The provider must communicate that the documents are not a substitute for the services of a licensed lawyer.

• The consumer must be given a chance to review the document before finalizing the purchase.

The North Carolina State Bar had agreed to support the legislation in October when it settled an antitrust suit filed by LegalZoom.

The U.S. Justice Department and the Federal Trade Commission had submitted a joint statement (PDF) on the bill that urged North Carolina lawmakers to consider the benefits of interactive legal forms, Law360 (sub. req.) reported last week. The statement said such forms can benefit consumers by increasing access to legal services and exerting downward pressure on legal fees.

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