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Lawsuit Claims LegalZoom Is Practicing Law Without a License 246

Posted by samzenpus
from the how-quickly-can-a-computer-finish-law-school? dept.
Bob the Super Hamste writes "Fortune has an interesting piece about a federal class action law suit against LegalZoom claiming that its software is illegally practicing law without a license. The law suit seeks to recover money from LegalZoom for every resident in Missouri who has used LegalZoom regardless of how satisfied the users were of the service. Currently Missouri law states that an individual who paid money to a non lawyer for legal services is entitled to sue the provider for 3 times the amount paid."
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Lawsuit Claims LegalZoom Is Practicing Law Without a License

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  • Who wins.......... (Score:2, Insightful)

    by Anonymous Coward

    And who wins here????? You guessed it, the LAWYERS!!!!

    • by ackthpt (218170) on Thursday June 30, 2011 @11:50AM (#36623542) Homepage Journal

      And who wins here????? You guessed it, the LAWYERS!!!!

      More than any other profession, those who practice law have the ability and influence to assure their lack of competition from computer aplications.

      You could write a program to scour a database of every legal decision, even include some fuzzy logic to handle grey areas - at the very least to bring them to your attention, and above all put it on plain english, not that "Lawyer Speak" you see on legal documents (which I'm quite positive are there to baffle and bamboozle the general public) and you would be driven into the dirt for having the audacity to do it.

      Lawyers have in the past decried software legal aids as providing customers with less than the best service possible (thus preserving their positions), but as we see computer chess games surpass even the best human opponents you can well assume a computer could do far more research and connect far more dots than the finest legal mind ever could, in mere seconds.

      The day will come when they won't have a leg to stand on, but as Science Fiction has often charged humanity will discriminate against cyber-persons, you can see the Legal Community are at the forefront.

      • Re: (Score:3, Insightful)

        by DriedClexler (814907)

        Amen, brother! (in the secular sense)

        This case is yet another example why yet another sector of the economy can't adapt to new realities and increase its efficiency.

      • by N0Man74 (1620447) on Thursday June 30, 2011 @12:10PM (#36623758)

        Forget Jeopardy, let's get a computer to pass the bar exam. ;-) As long as we don't program in self-interest too..

        "April 19, 2015 ... at 8:11 PM ... Lawnet became self aware, starting a chain of events that led to an intense legal battle between man and machine."

        • by what2123 (1116571)
          Subsequent it ruled that all software patents were inherently invalid based on the true meaning of innovation and not common sense. It also laughed at the Disney Law creating the first true emotion ever by an AI being.
      • by Kjella (173770) on Thursday June 30, 2011 @12:32PM (#36624010) Homepage

        Lawyers have in the past decried software legal aids as providing customers with less than the best service possible (thus preserving their positions), but as we see computer chess games surpass even the best human opponents you can well assume a computer could do far more research and connect far more dots than the finest legal mind ever could, in mere seconds.

        The same day you can point a computer to wikipedia and have Lt. Cmdr. Data. And no, Watson doesn't come close. Sure you can throw together some keyword software but to actually parse and understand what a legal text really is about, apply it to your case and give you something like a legal argument would take far more strong AI than what's available.

        Chess is in many ways ridiculously simple, the positions are finite, the rules absolute. But your legal case is not exactly like any other legal case and good luck trying to map all the rules like "the right to free speech" but it actually means drawings too and it doesn't mean shouting fire in a crowded theater. Without a huge number of abstract concepts beyond what's in the text itself you'll get nowhere.

        • While I agree, the situation here with LegalZoom is almost exactly like chess. It doesn't try to give you legal advice, only it generates a legal document for you to use. What is allowed is fairly limited and there are absolutely no edge conditions. I see it more as going to McDonalds than having a personal chef. Yes, the personal chef will make me better meals, more tailored to my needs & desires. But McDonalds will be cheaper and probably faster.
        • by snowgirl (978879)

          ... and good luck trying to map all the rules like "the right to free speech" but it actually means drawings too and it doesn't mean shouting fire in a crowded theater.

          Actually, this is precisely why computers can't get this right, because most people can't get it right. Brandenburg v. Ohio (1969) ruled that shouting fire in a crowded theater was less than the bar required to make speech illegal, and moved the bar to incitement of "imminent lawless action".

      • When America declared independence from Great Britain, you didn't actually think the concept of Lordship went by the wayside did you? Lawyers are modern day Lords. Or as close as it comes to it anyways.

      • by jd2112 (1535857)

        And who wins here????? You guessed it, the LAWYERS!!!!

        A lawyer is someone you hire to protect you from others in the same profession. The only other profession I can think of like that is extortionist.

      • by dintech (998802)

        I am not a lawyer.

        Such technology already exists to a certain extent. Historically doing the research for a case would involve teams of junior lawyers reading through libraries of previous cases. Now all of that information is digitized and searching for relevant stuff is much quicker.

        It's not a stretch of the imagination to see that eventually such software will be able to reason about the data found.

        You are right however in that it wouldn't exits outside the control of the legal profession. Only those guy

  • by sethstorm (512897) on Thursday June 30, 2011 @11:41AM (#36623412) Homepage

    Their documents might hold up in court, but their company may not.

    • by poetmatt (793785) on Thursday June 30, 2011 @12:01PM (#36623690) Journal

      not quite, whether you are referring to legalzoom or the company suing them.

      in irony, suing legalzoom and referencing them on slashdot is probably providing them quite the boom in business.

      • by flitty (981864)
        I have a friend who works at the IRS cleaning up business filings, calling businesses when they have incorrect information or missing information on their filings. He was complaining just last week that probably half of his calls are made to businesses who use LegalZoom and other similar online services. He was saying that these companies should be shut down for false advertising and misleading customers to what service they are really providing.
  • by Anonymous Coward on Thursday June 30, 2011 @11:41AM (#36623414)

    What do you call a bus full of lawyers going off a cliff?

    A comedy.

    What if there's an empty seat?

    A tragedy!

  • by bryan1945 (301828) on Thursday June 30, 2011 @11:43AM (#36623450) Journal

    By Missouri law-
    "Missouri's statutes define law practice as, among other things, "the drawing or the . . . assisting in the drawing for a valuable consideration of any paper, document or instrument affecting . . . [legal] rights."
    So if I, all by myself, draws up a will, I'm breaking the law? According to TFA, every single page on the website has disclaimers that this is not true legal advice. Another interesting facet is if found guilty, would this affect EULAs?

    • by Aladrin (926209)

      What makes you think EULAs are drafted without legal counsel?

      • What makes you think EULAs are drafted without legal counsel?

        I think he means LegalZoom's ELUA that the users accepted when they used the service.

      • NOTWITHSTANDING the foregoing statement of THE PARTY, mine is drafted with oh so judicious use of copy and paste.

    • No (Score:4, Informative)

      by Kupfernigk (1190345) on Thursday June 30, 2011 @11:53AM (#36623572)
      Unless you can work out a way to pay yourself for writing a will, no.

      The statute was obviously intended to deal with fake lawyers - yes there are people who will brave the social opprobrium of claiming to be a lawyer in exchange for money. However, provided that the website doesn't itself produce wills, deeds or other legal instruments, it should be in the clear.

      This is a grey area - the law could have benefits in preventing the automatic generation of, say, RIAA-type fishing expedition claim documents. It would be interesting if a real lawyer were to comment on the EULA issue; there is probably a good reason why it is excluded.

    • by vux984 (928602)

      So if I, all by myself, draws up a will, I'm breaking the law?

      Of course not. If you did it all by yourself you didn't pay anyone.

      However if you bought a book on how to do it, paper, and a pen... you apparently can sue each of those companies for "assisting" you. Possibly the electric company for providing you light while doing it as well.

      That's clearly where the software felt it should be classed. They'll argue the end user is drawing up the will unassisted, and that their software is in the same class as a

      • by _0xd0ad (1974778)

        Of course not. If you did it all by yourself you didn't pay anyone.

        However if you bought a book on how to do it, paper, and a pen... you apparently can sue each of those companies for "assisting" you.

        Actually that's already been done and tried and failed. From TFA:

        But in 1978 the Missouri Supreme Court effectively narrowed that language when it reviewed a case in which Missouri bar authorities sought to punish the sellers of a divorce kit that consisted of nothing but blank legal forms and instruction booklets for filling them out. The court ruled that merely marketing such materials did not amount to practicing law absent "personal advice as to legal remedies or the consequences of flowing therefrom."

    • by westlake (615356)

      So if I, all by myself, draws up a will, I'm breaking the law?

      When my grandmother moved into a nursing home, I needed to clear title to her house.

      That was my introduction to the mischief and malice that can be written into a will -- and how the heirs trying to put things to right on their own --- and doing it on the cheap -- can only make things worse.

  • I wonder if they could win their case by pointing the software in question at the litigation against it Watson style?

    My guess is that's not what LegalZoom does, but...

    Still, makes me wonder what was the driver for this lawsuit. Did someone get burned because the software screwed them?

    • From my reading of the article it seems that one of the individuals is just using this as a money grab as he was pleased with their service.
      • by geekoid (135745)

        It really seems like too little money to bother with. I think there most expensive service is 300 dollars.

        Legalzoom offers a service where a "customer care" reviews your document, if they aren't lawyers, that might be the issue.

        • Well if it is similar to small claims court is here in Minnesota where the filing fee is only $35 and you can include the filing fee in you suit then it becomes a simple matter of paying for a service and then getting about 3x the money back. It does seem like someone's little scheme. Also keep in mind this is a class action law suit so there are probably tons of claimants (tens, hundreds, thousands, ... I really don't know) so now we are talking substantial sums. Also I wonder how many users received multi
        • That's the point of it being a class action suit. In so doing the lawyers are able to extract a percentage of the sum total of damages awarded. If the plaintiff was Joe Blogs the lawyer would expect the usual $200+/hr fee. Because the plaintiff is Joe Blogs [1-10000] the lawyer is certainly taking the case on contingent. It's highly likely that it was the lawyer that sought out these people and convinced them to participate using the 3x return of fees as bait rather than the other way around.
    • by YojimboJango (978350) on Thursday June 30, 2011 @12:01PM (#36623694)

      A lawyer got burned is what happened.

      Chances are there was a group of lawyers that sat around in an overly expensive office and drafted (read, photocopied) paperwork for six figure salaries. They then found a website that threatened to do everything they did for free. Now having lots of free time they decide to actually use their education and sue their competition out of existence.

      Lesson: Never automate a lawyers or a congressman job. You can automate and outsource the entire rest of the country, but if you even look wrong at those professions you will be sued out of existence.

      • Re: (Score:2, Funny)

        by Anonymous Coward

        Lesson: Never automate a lawyers or a congressman job. You can automate and outsource the entire rest of the country, but if you even look wrong at those professions you will be sued out of existence.

        Dead men don't sue.

    • by jesseck (942036)
      FTFA:

      In December 2009 LegalZoom customer Todd Janson, later joined by two others, filed a class-action against LegalZoom in Jefferson City. The plaintiffs don't claim to have suffered any injury from using the software. But Missouri law says that someone who has paid money to a non-lawyer for legal services is entitled to sue the poseur for a sum equal to three times what he paid. So the suit seeks that recovery for every Missouri resident who used LegalZoom since December 17, 2004—regardless of how satisfied they might have been with the service. The lead lawyer is Tim Van Ronzelen of Jefferson City's Cook, Vetter, Doerhoff & Landwehr.

      They weren't harmed... just greedy.

  • Legal Templates (Score:5, Insightful)

    by Sonny Yatsen (603655) * on Thursday June 30, 2011 @11:47AM (#36623500) Journal

    That's pretty dumb. As far as I know, LegalZoom isn't practicing law so much as providing people with templates for documents where they can fill in bits that they want and delete other bits they don't want. This is not the same as giving people legal advice, or engaging in an attorney-client relationship with anyone.

    Besides, if this is successful, it'll have a detrimental effect to authors and publishers who publish books with legal templates (Draft your own Will books, for instance), most of which are for really simple stuff like wills or simple contracts. It's going to deny the poorest people access to making these documents because it's going to force them to seek attorneys who are often too expensive.

    • Re:Legal Templates (Score:4, Insightful)

      by Attila Dimedici (1036002) on Thursday June 30, 2011 @11:56AM (#36623618)

      Besides, if this is successful, it'll have a detrimental effect to authors and publishers who publish books with legal templates (Draft your own Will books, for instance), most of which are for really simple stuff like wills or simple contracts. It's going to deny the poorest people access to making these documents because it's going to force them to seek attorneys who are often too expensive.

      That is the idea here. The lawyers don't like those books either. The whole point of laws like the one in this case is to protect certain groups from competition (or to force those who go into certain businesses to pay dues to an organization).

      • Re:Legal Templates (Score:4, Insightful)

        by Bob9113 (14996) on Thursday June 30, 2011 @01:13PM (#36624518) Homepage

        >> It's going to deny the poorest people access to making these documents because it's going to force them to seek attorneys who are often too expensive.

        > That is the idea here. The lawyers don't like those books either. The whole point of laws like the one in this case is to protect certain groups from competition

        Makes for an interesting lens through which to view the ethics of the software engineering culture. Many of us, particularly on this forum, are contributors to F/LOSS -- very similar to legal templates. There are, however, those such as Microsoft who have at times sought to steer the government to inhibit the flow of F/LOSS. As I reflect on the coders, engineers, and scientists in the field I have known, it strikes me that their level of support for F/LOSS correlates well with their sense of ethics. The most honorable are also those who most strongly advocate for broader publication of source code. Perhaps altruism, though I am skeptical of that term; perhaps more out of a sense of long-term rational self-interest -- advocating for the rising tide of society which raises all ships.

  • by paiute (550198) on Thursday June 30, 2011 @11:47AM (#36623502)
    Unfortunately for the plaintiffs. the State of Missouri just announced that the case will be heard by their new AutoCourt software.
    • The ironic thing is I just completed a Living Will and Durable Power of Attorney using a template downloaded off a website hosted by my state, Ohio. Missouri [mo.gov] has one too. I suppose I should sue my State for 3x damages. I'm sure some of my tax money went into that bandwidth.

      Do you hear the ROFOLing
      A ROFOLing we go...

  • Litigious bastards (Score:5, Insightful)

    by JosKarith (757063) on Thursday June 30, 2011 @11:52AM (#36623560)
    It's an obvious attempt at a chilling effect to destroy the site. I very much doubt that the idea to do this came from the plaintiff - the American legal profession will have been searching for an excuse to get a ruling against this site and now they've found a jurisdiction and willing shill.
  • by kaptink (699820) on Thursday June 30, 2011 @11:53AM (#36623570) Homepage

    Lawyers dont like competition and are very good at suing cause thats what they do. I just watched a great doco on the dodgy legal tactics going on in the states called 'hot coffee' based on the well known McDonnalds/coffee lawsuit. Very much worth a watch.

  • Okay, so apparently some people read a law that might state that LegalZoom is an illegal service. So they have filed suit to claim their triple damanges bonus reward. I wonder -- did they get their filing papers from LegalZoom to do this? I think it would be more than a little amusing if this were the case.

    • Well if they could used LegalZoom for their filing papers, I don't know the full range of services offered, it would only increase their awarded damage if successful. To me this seems like someone's get rich scheme.
  • Web MD is next for practicing medicine without a license. Or, the whole thing is insane. Cant think of a third option.
    • by geekoid (135745)

      If WebMD had a service where people reviewed someone symptoms, and those people turned out not to be Drs, then yes, suing WebMD would be the correct response for consumer protection.

      This looks like one of the stories about a lawsuit that takes the most trivial interpetation and then whines about broken tort.

  • You're entitled to claim 3x the fees you paid a non-lawyer for legal services.
    So... did they pay the software itself money? Did the software give any of the money to it's owners and creators (who might be lawyers) or did it keep it all for itself. And if so, what DID the software do with all that money?

  • IANAL, but I play one on the Internet... ;) This makes sense, playing devil's advocate. Can I start up a website, make up documents for wills, divorce, etc. and have no legal background? Without an in-state attorney to produce the documents, I have no standing to say that they will be legal in that state.

    I would hope that LegalZoom has an in-state lawyer actually verifying these documents.

    • by Lifyre (960576)

      The founders (at least Robert Shapiro) are lawyers so there is at least some basis for these to be legit. I've used Legal Zoom in the past and it appears they do have lawyers, either in house or contracted, for each state but I can't speak from a position of authority on how their company is structured.

    • by cdrguru (88047)

      You could go to your local library and dig up copies of local forms that have been used. With some cleverness on a computer you could remove people's names from the documents you find there and substitute blank spaces or (oooh!) variables that are substituted by some really spiffy software.

      Then you would have what LegalZoom has done. Oh, you might want one lawyer that has looked over the whole mess and said it was OK. You didn't really think LegalZoom is more than a web site and a call center did you?

  • by tgd (2822)

    Does LegalZoom have a template for filing class action lawsuits?

  • Every occupation wants state-backed occupational licensure. They _tell_ you it is for reasons like

    - only a licensed plumber has taken the rigorous training required to understand that you don't want to drink fecal matter
    - only a licensed electrician has taken the rigorous training required to understand that you don't want to lick 2 or more live electrical conductors at once
    - only a licensed pharmacist has taken the rigorous training required to understand that you do not take all of the pills in the bottl

    • Every occupation wants state-backed occupational licensure. They _tell_ you it is for reasons like

      - only a licensed plumber has taken the rigorous training required to understand that you don't want to drink fecal matter - only a licensed electrician has taken the rigorous training required to understand that you don't want to lick 2 or more live electrical conductors at once - only a licensed pharmacist has taken the rigorous training required to understand that you do not take all of the pills in the bottle at once -

      While I agree that licensing laws protect wages, and in many cases are ridiculous - does it really matter if your barber is licensed? - there are also valid reason for licensing some professions

      A license indicates a level of understanding of the basics of a profession - a plumber or electrician knows code and some of the reasons behind it so you get proper water seals and safe circuits installed. A pharmacists understands drug interactions and, assuming you use the same one, can catch incorrect prescription

    • To argue that occupational licensure is incumbent wage protection is to ignore the fact that any qualified person can apply for and be issued a license.

      Better yet you gave some crappy examples:

      I would hire a licensed plumber or electrician because he is recognized by the state as being familiar with local codes pertaining to plumbing / electrical wiring.
      I would use a licensed pharmacist because he is certified by the state to have the educational requirements to safely dispense medication to the public.

    • by geekoid (135745)

      You do know this was field by people who aren't lawyers, right?

      "Occupational Licensure is incumbent protection. It's a racket, it drives up wages artificially, and I don't see that it has any impact at all on quality of services delivered."
      that's just wrong. You might want to look at history a bit before looking so damn stupid. All those came about because of massive consumer ripoffs and fraud.

      If you are correct, then other states wouldn't have change there laws to allow this service, or made exception for

  • So this applies to any software used to write a legal document without license to practice law? What about the fat ass corporate lawyers who inevitably have their assistants or paralegals type up all of the documents, and then just put pen to paper and collect their fee? Any assistant who used Word, Notepad, TextEdit, whatever...would technically be guilty as well as the software they used?

    This is some frivolous shit here...I hate lawyers.

  • It is unethical for websites like WebMD to suggest that I take Benadryl for pollen allergies or Ibuprofen for a headache. How can they claim to be providing adequate medical advice? I should sue them for suggesting well-tested remedies to common conditions instead of requiring me to visit a doctor in person to receive identical recommendations.

    • by geekoid (135745)

      What if they claimed to have someone review your symptoms and that person wasn't a MD?

  • by cdrguru (88047) on Thursday June 30, 2011 @12:47PM (#36624208) Homepage

    As a forms respository, it serves some purpose. If you have a problem, say needed a simple will, you can find a form that will allow you to present your will in the proper style to be recognized by people who know what a will is supposed to look like and what it is supposed to contain. And if all you need really is a simple will, then you got what you needed at a really cheap price.

    On the other hand, there is nobody to tell you when you cross the line from needing a simple will to needing something more complex. So you have a simple will and think everything is fine. The same problem comes with every other sort of form they offer. If the form they cough up is all you really need it is a great and cheap service. But there is no judgement about what else might be needed. For that some sort of creative thought or at least more than just a passing familiarity with the local laws is needed.

    Sure, lawyers cost money and you can hope until your dying day that you never need one. But as many people have found out, when you need a lawyer the first criteria should not be cheap. If you already know enough to be able to tell when you need a lawyer vs. a form repository then LegalZoom is a great service - but there are free form repositories so you don't need to use LegalZoom to get a standard lease form. What LegalZoom really has is advertising which your local library (another form respository) doesn't have. If you listen to much radio (ugh!) you will hear endless ads for LegalZoom - but you never hear an ad for the library. In that way LegalZoom is far more effective at gathering your support than the library is.

    Maybe libraries should start advertising?

  • It may take a couple more years before Missouri gets hammered by the feds for violating the Sherman anti trust act if they let this dog and pony show get away from them. They were put on notice [ftc.gov] years ago that their state law [mo.gov]is too vague. Even if legalzoom loses and pays 15 mil in damages, they will probably make it up in free ads and new revenue.
  • by AmberBlackCat (829689) on Thursday June 30, 2011 @03:21PM (#36626352)
    I'd like the court to explain why, in any other class action suit, the victim can lose hundreds of dollars and gets maybe $3 back. But in a case that costs lawyers to lose business, the class action suit can get the "victims" three times what they actually paid.

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