Lawsuits target LegalZoom over business model
Monday, June 14, 2010
This is will be interesting to watch. The Los Angeles Business Journal this morning looks at a spate of class-action lawsuits accusing LegalZoom, the online form-supplier to do-it-yourselfers, of offering legal services without a license.
Legal Zoom began in Hollywood in 2001 as a condo-based business and has expanded to become a national presence, offering customized legal forms for everything from wills to real estate transactions. Of course, the whole point is to feed people who seek to access the courts without using a lawyer, which as well know can be a bit of a gamble. One of the suits was filed in Los Angeles, the LABJ reports:
Consumers who go to LegalZoom’s website can fill out customizable legal forms online that are checked for errors by customer service employees who make follow-up phone calls as needed. The package for incorporating a business, for example, can cost as little as $139. In comparison, “a lawyer would charge you approximately $1,480 for the standard incorporation package,” the website states.
The Los Angeles Superior Court lawsuit, filed May 27, alleges that LegalZoom misleads consumers by advertising its services as “attorney-quality” and seeks “an order prohibiting defendants from engaging in the unauthorized practice of law.” The case was filed on behalf of a San Francisco woman named Katherine Webster, who claims she bought a living trust on behalf of her uncle that turned out to be so problematic she had to hire an attorney to fix it.
Among the co-founders, and the face of the business in its early television ads: Robert Shapiro, who became something of a household legal name when he was part of the team that won a criminal acquittal for O.J. Simpson.