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LegalZoom settles multi-million dollar antitrust suit against the North Carolina State Bar with agreement to continue operating

Hello everyone and welcome to this Ethics Alert which will discuss the recent agreement between LegalZoom and the North Carolina State Bar which will apparently settle its multi-million dollar antitrust lawsuit which was filed in the North Carolina Middle District in June 2015.  The agreement has certain conditions and would allow LegalZoom to continue operating in that state.  My Ethics Alert blog discussing the federal antitrust lawsuit is here:

LegalZoom filed the antitrust lawsuit in June 2015 seeking $10.5 million in damages for the alleged antitrust violations and based on the recent U.S. Supreme Court opinion which struck down the enforcement of regulations by North Carolina’s dental board, which attempted to prohibit teeth whitening by non-dentists.  In that case, the U.S. Supreme Court stated that the regulation of a profession by licensees in the same profession violated antitrust regulations.  The case is North Carolina State Board of Dental Examiners v. Federal Trade Commission, No. 13–534. (USSC February 25, 2015).  That opinion is here: and my Ethics Alert blog on the case is here:

According to media reports, LegalZoom and the North Carolina State Bar have agreed to settle the pending antitrust lawsuit.  Under the terms of the settlement, LegalZoom will agree to have its documents reviewed by North Carolina lawyers and inform its customers that the blank templates are not a substitute for advice from an attorney. The North Carolina State Bar also agreed to allow LegalZoom to continue to operate in the state and to support proposed legislation designed to clarify the definition of the “unauthorized practice of law”. Both parties agreed to support pending legislation permitting interactive legal-help websites if the websites abide by the basic terms of the settlement agreement.

The North Carolina State Bar had criticized and fought LegalZoom’s activities since 2008, although the company had been approved to operate in the state in 2003.  Legal challenges to LegalZoom’s activities have either ended or are not being pursued in other states and the North Carolina effort was the only ongoing effort to change LegalZoom’s business model.  According to reports, LegalZoom states that the agreement is on the same terms that it proposed in 2011 but the Bar refused the offer.

According to an article in the ABA Journal in 2014, LegalZoom is planning to offer more services to consumers and small businesses, including routine legal advice using both lawyers and non-lawyers.  According a LegalZoom news release, the company is increasing its services to include prepaid legal service plans in various states in addition to preparation of online documents, and it also plans to launch more services in North Carolina and other states this year.

Bottom line:  If this settlement is approved, it would appear to be a victory for LegalZoom and its activities, with certain modifications, including the requirement that its documents be reviewed by lawyers and that it informs its customers that the blank templates are not a substitute for obtaining advice from an attorney.  We will see how this plays out in North Carolina and in the other states and jurisdictions, including Florida.

Be careful out there.

Disclaimer:  this blog is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

2454 McMullen Booth Road, Suite 431

Clearwater, Florida 33759

Office (727) 799-1688

Fax     (727) 799-1670

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