LegalZoom: A Double-edged Sword For North Carolinians

fickeymartinez • November 13, 2015

Foundation

As a company, LegalZoom was founded in 2001. It is also a company that most Americans can identify. Yet, people should be cautious of its use. It is true that LegalZoom can be an amazing tool. It can create simple contracts, wills, and business start-ups. However, its products cannot and do not solve everyone’s legal needs.

Generally, legal documents, whether made by LegalZoom or by an Attorney, can be generic, using a cookie-cutter approach, where the format and wording are time-proven to be valid.

LegalZoom has capitalized on efficient and reasonably-priced documents; however, they are unable to say if a document prepared for a customer is “correct in North Carolina,” because that is a practice of law. When a document is not correct, the document could cost someone undue burden and stress from a complication down the road. For instance, if a husband makes a will for his wife, where a paragraph in the will disinherits a spouse, at the husband’s death, the will would be brought into question, the intentions of the deceased will be scrutinized, and the will may even be voided. In this scenario, the will was for the benefit of the widowed-spouse, but it is the widow who experiences undue burden and stress from an incorrect will.

An attorney, on the other hand, knows North Carolina law and what is correct in North Carolina, after all, that is their job. For example, if an attorney makes a will or aids in forming a business, he will be in direct contact with you. He will spend time to learn your situation and what your needs truly are. He will explain all the legalese in the document and give the client what they need for North Carolina.

Financially, it is true that attorneys cost more than some services offered by LegalZoom, but (as the saying goes) “you get what you pay for.” Now, clients does not need to pay for the most expensive lawyer or shy away from the cheapest lawyer. Clients have the right to “shop” attorneys in their area to find the perfect attorney for their needs. In comparison, the fees for LegalZoom are not negotiable and usually are stated in saying such as: “$69 and up.”

Post’s Issue

North Carolina can be described as the last “state” fighting against LegalZoom’s products. However, October 23, 2015 marks the day when the North Carolina State Bar, the government agency that regulates North Carolina Attorneys and the practice of law, publicized that they will no longer object to LegalZoom doing business in North Carolina, legally termed a “settlement.”

In the most recent lawsuit, LegalZoom sought $10.5 million dollars in antitrust damages against North Carolina lawyers. It was an “antitrust” suit because it alleged that North Carolina lawyers monopolized the practice of law and denied LegalZoom from offering its pre-paid service plans.

The recent settlement will allow LegalZoom to operate in North Carolinians, under the following restrictions (condensed below):

  1. The definition of the “practice of law” will not encompass LegalZoom’s operation of a website that offers to generate a legal document
  2. LegalZoom shall provide to any consumer purchasing a North Carolina product a means to see the blank template or the final, completed document before finalizing a purchase of that document
  3. An attorney licensed to practice law in the State of North Carolina has reviewed each blank template and the name and address of each reviewing attorney must be kept on file by LegalZoom and provided upon written request
  4. LegalZoom must communicate that the forms or templates are not a substitute for the advice or services of an attorney
  5. LegalZoom cannot disclaim any warranties or liability and does not limit the recovery of damages
  6. LegalZoom cannot place the jurisdiction or venue in any state other than North Carolina for the resolution of disputes between LegalZoom and the North Carolina Consumer

The most prominent effects of this recent settlement is that North Carolina Attorneys reviewed the templates of the documents and that every interaction with a North Carolina Resident will have a notice that the client should not consider the LegalZoom services as a replacement for an attorney.

Conclusion

In short, as the title suggests, LegalZoom is a double-edged sword. It can be a useful tool or something that can injure you. LegalZoom documents are great, and should be used only when the situation is simple and the client is knowledgeable about the particular matter. Otherwise, it is wise to seek the advice of a lawyer and even have them assist you in the needed matter.

 

 

Disclaimer: This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog/Web Site publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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