I Hope LegalZoom Ruins My Career

Lawyers start lying before they’re even lawyers. It all starts with the law school application.

Wanna know a secret? I lied too. When I applied to law school I had no idea why I wanted to be a lawyer.

My law school application should have said something like, “I don’t know what I want to do with my life. I’m writing to you from my desk at a record label, which I thought was my dream job, but there’s no challenge here. Law school is a challenge, and I love my Business Law class, so I want you to challenge me. Apparently I’m a masochist. But I’d rather be a masochist than spend one more day reorganizing CD cabinets.”

Wanna know what I said instead?

“I want to be a lawyer because I want to help people.”

Every lawyer has said it. But if you’re a lawyer who doesn’t support LegalZoom, then that was complete BS.

LegalZoom’s War Over UPL

LegalZoom has battled in a number of states over whether it’s engaged in unauthorized practice of law (UPL), but most of them never really had to answer the question. LegalZoom settled class action UPL cases in California, Missouri, and Washington. Arkansas sent their case to arbitration, and a case in Alabama was dismissed. The only courts to actually speak have been Ohio and South Carolina, both of which decided LegalZoom wasn’t engaged in UPL. It’s still mid-battle in its current suit against the North Carolina State Bar. But, thanks to the Supreme Court’s February 2015 opinion in North Carolina State Board of Dental Examiners v. FTC, this case might be LegalZoom’s last.

The Battle in N.C.

In 2008, the North Carolina State Bar sent LegalZoom numerous cease-and-desist letters, arguing that LegalZoom holds itself out as providing legal documents prepared by attorneys. In response, LegalZoom sued the North Carolina State Bar, claiming that its services don’t constitute UPL, and that the State Bar broke the law by declining to register LegalZoom’s service plans.

The case went to North Carolina Business Court in March of 2014. It’s still in limbo—neither LegalZoom’s nor the State Bar’s motion for judgment on the pleadings were wholly successful. Though the State Bar’s motion was granted in part, essentially all that did was throw out any issues unrelated to UPL. As to the UPL claim, while some of LegalZoom’s documents “comfortably remain within the permissible boundaries,” the court said they needed more evidence to understand LegalZoom’s doc prep process.

What does this have to do with dental examiners?

Similar to UPL, the unlicensed practice of dentistry is also a crime. But, so is the violation of federal antitrust laws, and the Supreme Court held that the North Carolina State Board of Dental Examiners did just that when they sent threatening cease-and-desist letters to competing teeth whitening services.

After determining that the Dental Board violated antitrust laws, the case turned on state-action immunity—a doctrine that gets state agencies off the antitrust hook when their anti-competitiveness is based on a state policy. The Supreme Court previously expanded the doctrine to non-state actors, but only if they’re (1) acting on state policy, and (2) doing so under active state supervision.

SCOTUS decided the Dental Board didn’t count as a state agency “because a controlling number of the Board’s decisionmakers are active market participants in the occupation the Board regulates.” Sound familiar, bar associations?

Although the Dental Board decision seems to pave the way for a LegalZoom win in North Carolina, the victory might not be inside the courtroom. North Carolina Lawyers Weekly released a statement that the North Carolina State Bar and LegalZoom reopened discussions about potential changes to the state’s UPL legislation—namely, the definition of “Unauthorized Practice of Law.” Maybe the North Carolina State Bar will wave their white teeth flag after all.

Root for the Winning Team

Even beyond LegalZoom, many are speculating that SCOTUS has set the precedent for a broader spectrum of innovative services to stand up to UPL claims. I hope they’re right.

Why, as someone who will be competing directly for LegalZoom’s business, do I still root for them? Why would I rather be out of a job – having wasted 3 years of my life and an exorbitant amount of money on law school – than have them fail?

Because even though I lied about knowing why I wanted to be a lawyer three years ago, I know why I still want to be a lawyer today: I want to be a lawyer because I want to help people. But the part I care about is people actually getting the help they need, not whether they’re getting it from me.

As Carolyn Elefant explains in her post for Above The Law, there are 5 typical reactions lawyers have to LegalZoom:

1. “LegalZoom doesn’t worry me because it’s not new. People have always been able to buy these forms, but we still have jobs.”
2. “I tell clients to use LegalZoom. But then I explain how much more valuable I am. And they buy it.”
3. “You get what you pay for.”
4. “SUE THE BASTARDS FOR UPL.”

And in the words Jordan Furlong used to articulate his similar disdain for these reactions,

5. “Ka-ching! Every time a client tries to use one of these companies, it just means more business for me when they come looking for help to straighten out the mess they made.”

Take a step back. Do any of those people sound like people who want to help you?

Now think about LegalZoom—an innovative business model to get more affordable legal services to an underserved market. How about them?