August 23, 2011
LegalZoom To Settle Unauthorized Practice of Law Class Action Case
The big showdown in Missouri over whether LegalZoom is liable for the unauthorized practice of law via its documents service is turning into a big letdown, assuming that one wants to see some precedent in this type of case. The class action case, brought by customers of LegalZoom who allege, by the way, no harm from using the service, is on the verge of settlement. No terms are announced, but David Butsch LegalZoom's counsel was quoted in the Wall Street Journal as saying the settlement would compensate LegalZoom's customers in Missouri without changing it's business practices in that state. Sounds as if the company is buying off the plaintiffs.
I can only wonder how this settlement will stop any other enterprising attorney from attempting to shake down the company for cash with a future suit. We'll see if the settlement extinguishes future claims of unauthorized legal practice. [MG]