I've blogged about the perils of using ready-made legal forms, and it seems that some states think that purveyors of ready-made legal forms like LegalZoom may be partaking in the unauthorized practice of law.
The ABA Journal recently reported that "LegalZoom announced in a press release that the South Carolina Supreme Court had approved the company’s business practices, which have been challenged in a number of state courts as unauthorized practice of law."
However, "just over the border in North Carolina, a judge breathed extended life into a case claiming the company engages in the unauthorized practice of law. Judge James L. Gale, a Special Superior Court Judge for Complex Business Cases, issued an order and opinion March 24 concerning various motions in a suit involving claims and counterclaims between LegalZoom and the North Carolina State Bar, which argues that the company engages in unauthorized practice of law and also failed to meet filing requirements in seeking approval to run a prepaid legal services plan in the state."
During the litigation, "Gale looked at a variety of screenshots of LegalZoom’s website provided by both parties, and at North Carolina statutes concerning the unauthorized practice of law. LegalZoom’s digitized self-help document preparation has been compared to TurboTax for consumers doing their own tax returns, with a series of questions taking users step-by-step along logic trees. What becomes the next branch depends on the answer given at the last one."
"Gale noted, for example, the statutory right to self-representation (including with purchased documents) but asks 'does its premise require only that the unlicensed individual make choices in drafting a legal document, and that the choice or risk of an incorrect choice about which portions of a form to include must belong exclusively to the individual? Is there then a legally significant difference between how on engaging in self-representation uses a form book versus LegalZoom’s interactive branching software?'"
It seems that the judge had more questions than answers. Currently, "LegalZoom offers online, self-help legal documents in all 50 states and has faced a number of legal challenges along the way. Besides North Carolina, the company still faces challenges in Arkansas and Alabama."
It'll be interesting to see if LegalZoom will be deemed a viable alternative to seeking professional help - much like TurboTax - or if states will consider the logic tree as the unauthorized practice of law and ban its use.