Unauthorized Practice of Law
Legal Zoom, The Mortgage Law Group, & Legal Helpers
In North Carolina, we have a specific statute which defines the “practice of law,” and a statue which prohibits any person or association of persons, except for active members of the Bar of the State of North Carolina admitted and licensed to practice as attorneys-at-law, to practice law. Recently, large corporations have been providing what they consider to be legal services to residents of North Carolina. As result of these activities, there has been litigation concerning whether these corporations have been engaged in the unauthorized practice of law. These companies may include, but are not limited to: LegalZoom, The Mortgage Law Group, and Legal Helpers.
In 2011, the North Carolina legislature granted a private cause of action for people injured by the unauthorized practice of law. Thus, if it is concluded that these companies are engaged in the unauthorized practice of law, and you received what you believed to be legal advice which caused you to incur financial loss or damage, then you may have a claim. All of our attorneys are licensed in North Carolina, and we would be happy to discuss any potential claim you may have.
2015 UPDATE: Legal Zoom Sues State Bar
On June 3, 2015, LegalZoom filed suit against the North Carolina State Bar (the agency that oversees attorneys and the practice of law) alleging that the Bar has violated federal antitrust laws by refusing to give a seal of approval to LegalZoom’s pre-paid legal business plans. The suit asks for more than $10.5 million in damages. For details, click here for a Wall Street Journal article. The suit follows on the heels of a United States’ Supreme Court ruling against the North Carolina State Board of Dental Examiners, who had attempted to enforce limits on teeth whitening services not provided by licensed dentists. For more on that story, click here.
The State Bar has not yet commented on the suit, but in the past, has expressed its position that LegalZoom and other corporations attempting to offer legal services in North Carolina must meet specific guidelines to protect the public from dangerous attempts by non-licensed attorneys to provide complicated legal services.
In its denial of LegalZoom’s application, the State Bar had found that the plans offered legal services that would not be provided by licensed North Carolina attorneys, that the customer contracts were “illusory and unenforceable” and contained non-compliant forum selection clauses that require disputes to be arbitrated in LegalZoom’s home state of California.
Update, August 10, 2015. Lawyers Weekly, in an article entitled “Upping the Ante,” is reporting that controversy has arisen over the North Carolina State Bar’s decision to utilize outside counsel for the handling of its suits regarding LegalZoom, and other similar suits regarding unauthorized practice of law allegations. The State Bar is currently involved in two suits against Legal Zoom, one filed by the state in state court, and one filed by LegalZoom in federal court. The State Bar is also being sued in federal court by Capital Associated Industries, a company that wishes to provide quasi-legal services in the state. The State Bar, which is funded by mandatory dues paid by attorneys, is reportedly paying between $250-$300 an hour for attorney services and $120 an hour for paralegal services.
Earlier UPDATE: Strategic Win for Legal Zoom’s Position
Legal Zoom recently received a favorable ruling from the Judge assigned to this case but the matter is far from over. The NC State Bar wanted the court to rule that Legal Zoom’s internet based services were illegal based upon the court’s review of its website and then dismiss the suit which was filed 3 years ago by Legal Zoom against the State Bar.
The judge denied the State Bar’s motion for judgment on the pleadings and determined that he needed more information about the specifics of how Legal Zoom works. Only following a more thorough and complete examination of the facts will the court be able to determine if the services provided by Legal Zoom are exempt from the NC Statute prohibiting the unauthorized practice of law.
Legal Zoom wants a jury to ultimately decide the case.
Source: North Carolina Lawyers Weekly www.nclawyersweekly.com
History of this Battle:
As featured in the North Carolina Lawyers Weekly article of August 23, 2013, The North Carolina State Bar began its investigations of LegalZoom.com, Inc. in approximately 2003. Eventually the Bar determined that the online services provided by LegalZoom were illegal and requested LegalZoom to cease and desist providing its services to residents of North Carolina. LegalZoom disagreed and, the California based company, sued the North Carolina State Bar in 2011. It has continued to attempt to provide forms to residents of North Carolina.
Since this time, other companies have also joined the battle against the North Carolina State Bar in an attempt to provide online legal services to residents of North Carolina. The State Bar takes the position that the online services provided by these companies are illegal and constitutes the unauthorized practice of law. The businesses argue that their services are legal. Recently, a class action lawsuit was filed against LegalZoom by a North Carolina corporation which claims they erred in filling out the forms for tax exempt status. Eventually, the question as to whether they are engaged in the unauthorized practice of law will be determined by our judges and possibly the appellate courts of our state.
Contact Our “Unauthorized Practice of Law” Attorneys Today
If you believe that you have been financially injured by advice you received from LegalZoom, The Mortgage Law Group, Legal Helpers, or any other internet based company which claims to provide legal services, then we suggest you contact an attorney as you may have a claim for the unauthorized practice of law.
With office locations in Goldsboro, Raleigh, Kinston, and Jacksonville, our lawyers are able to help people across the state. If you have a legal issue, and are in need of assistance, pick up the phone and give us a call at 800-525-7111 or simply complete the form at the top of this page today. If we are not able to help you with your legal matter, we will be happy to attempt to offer you another law firm or a number to call for a referral to a licensed North Carolina attorney who may be able to help you.
We strongly encourage every person to have personal contact (by phone or in person) with a lawyer licensed to practice law in North Carolina prior to making any legal decision. Laws specific to this state may impact your situation, whether the issue involves workers’ compensation, an auto accident, serious injury or any other legal matter.
Sources: North Carolina Lawyers Weekly