Do Document Prep Companies Work? One Lawsuit Says No

Do Document Prep Companies Work?  One Lawsuit Says No

LegalZoom.com is a national online company that sells DIY legal forms. If you want a will, for example, the site will ask you some questions and then create the document and send it to you. The company is being sued by customers in Missouri who claim, according to an AP article, that Legal Zoom was illegally practicing law in Missouri.

If you’re not a licensed attorney, you can’t do certain things, like prepare legal documents. And if you are licensed, you can only practice in the states in which you are licensed. It is not illegal, however, to provide or sell legal forms. The problem is that the line between the two isn’t always clear.

Aside from the legality of it all, I am very skeptical of self-help legal products. My concern stems from the fact that the law applies to everyone differently. If you’re using an automated website to produce a document, you aren’t being asked all the questions a lawyer would ask you. You aren’t benefiting from a conversation between you and your attorney about your family, your past, your future, your goals, your finances. It’s a risk.

The Missouri lawsuit is a class action, with thousands of customers seeking compensation. The settlement is not public, so the final terms of the agreement are unknown for now. According to the AP article, Legal Zoom has agreed to make changes to its business practices in Missouri, as well as compensate its customers.

The Missouri lawsuit isn’t the first case against Legal Zoom. Last year, the company settled with the Washington state attorney general’s office, which was concerned not only about the illegal practice of law but about protecting consumers. According to a press release, the Attorney General specifically was worried about the company’s estate planning documents. In that state, a secondary document called a community property agreement is commonly prepared along with a will in order to avoid probate when there is a surviving spouse. It’s the state-specific details that can slip through the cracks. According to the press release, Legal Zoom also agreed to stop comparing its fees to attorney’s fees unless it also states that its services are not a substitute for a law firm.

Settling a case can be a strategic decision, and it’s not necessarily an admission of guilt. Regardless, I think this is a good warning. There is so much information available online. You have to be vigilant about what to believe and who to trust. When it comes to online legal forms, proceed with caution.

Personally, I don’t think it’s worth the risk. 

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