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The State Bar’s Been “Zoomed”

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Legal document provider, LegalZoom.com, Inc., filed suit against the N.C. State Bar in state court on September 30.  In the suit, LegalZoom challenges the State Bar’s interpretation that its online “self-help” legal document production constitutes the unauthorized practice of law (UPL).  LegalZoom also asserts that the State Bar violated its constitutional rights by previously issuing it a cease and desist letter and by failing to register prepaid legal plans sponsored by it.  The suit filed by LegalZoom may allow NC courts to set important precedent in this rapidly evolving area where the practice of law intersects with technology.

In addressing complaints against LegalZoom and others, the State Bar’s Authorized Practice Committee has opined that legal document production software programs, including those online, constitute UPL.   The UPL statutes define as the practice of law preparing or aiding in the preparation of various legal documents.  The State Bar has interpreted this statute to prohibit preparing legal documents even when they are produced by a customer’s direct input of information into an automated document creation software program and no person is involved in preparing or providing documents to the consumer.

Not much case law exists on this issue.  As a result, this suit is likely to draw interest around the country.  Google recently announced the launch of an online legal document production service, which will compete with LegalZoom and others in this market.  Part of the competing interests on this issue are the State Bar’s obligation to assure competent legal representation to NC consumers versus the public’s right to access affordable legal assistance.  One thing seems certain – many interested legal observers and lawyers will be watching this suit and the decision could have a significant impact on the public.