LegalZoom Goes After Estate Planning Lawyer Tyler White

legalzoom more like legaldoom11 LegalZoom Goes After Estate Planning Lawyer Tyler White

http://www.flickr.com/photos/ralphhogaboom/2684158410/

LegalZoom recently took Lawyerist LAB-member Tyler White to task for his post criticizing the LegalZoom’s disclaimer. Tyler pointed out that LegalZoom provides a lot of legal forms of dubious value for very little money, but disclaims all responsibility for the harm they may do. For starters, LegalZoom points out that it is not even a law firm, and that “LegalZoom’s legal document service is not a substitute for the advice of an attorney.”

Good point.

LegalZoom must have a pretty active reputation management division, because none other than Chas Rampenthal, the “General Counsel and VP of Product Development,” responded with a comment.


He started out by defending his company’s honor, pointing out that some people who need legal help cannot afford to pay more than LegalZoom’s prices. And that is probably true. I don’t think LegalZoom is actually taking much business from lawyers, since it is going after a very different customer base. He then got all ad hominem:

While criticizing an A+ rated company by the Better Business Bureau that has been in business for 10 years, Mr. White conveniently omits the fact that he has practiced estate planning law for only 7 months. Check out his Linked In profile, available here.

Tyler capably pointed out the flaw in this reasoning:

I have been in practice for less than a year. This is true, but it is something that I cannot control. I don’t hide that fact from clients, either, and I believe that my rates reflect my level of experience. I will say, though, that I am fully qualified to provide legal advice and estate planning guidance in the State of Minnesota.

And that is more than LegalZoom can say. No matter how many BBB A+’s LegalZoom may have, its own disclaimer disqualifies it from doing what Tyler does.

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  • http://www.linkedin.com/in/jenniferfrantz Jennifer Frantz

    Welcome to Estate Planning Tyler!
    (BTW, there’s a “secondary market” in fixing the errors caused by such “services”.)
    Love the post Sam!

  • Jennifer

    Another thing that Legal Zoom doesn’t say…. or perhaps says in a round about way with their disclaimer… is that if you go to a licensed attorney who carries malpractice insurance, part of the cost is to buy yourself a little insurance. If attorney screws up, the insurance covers the fall out. If you do it yourself and you screw up, you’re out of luck. If you pay Legal Zoom to help you do it yourself and you both screw up, you’re still out of luck.

    In other news, I would feel much more comfortable having Mr. White draft my will than Legal Zoom any day.

  • Tyler White

    Thanks Jennifer, this has been quite the baptism…

  • http://jthutch.com/ Jason Hutchison

    At the risk of sounding monopolistic and anti-competitive, I would direct LegalZoom and similar outfits to Minn. Stat. 481.02, which I shall paraphrase: Thou shalt not practice law in Minnesota without a license. Most states have some variation on this theme.

    What is “practicing law?” Well, beyond the obvious (like going to court for a client), how about “by word, sign, letter, or advertisement, to hold out as competent or qualified … to prepare legal documents, … or, for or without a fee or any consideration, to prepare … any will or testamentary disposition or instrument of trust serving purposes similar to those of a will, or … any other legal document[.]” Minn. Stat. 481.02 – https://www.revisor.mn.gov/statutes/?id=481.02

    If these companies aren’t “hold[ing themselves] out as competent to prepare legal documents,” then exactly what are they billing people for?

    Jason

    PS – Did I mention it’s a misdemeanor?

  • Tyler White

    @Jason,

    I didn’t bring this up with Mr. Rampenthal because I didn’t want it to get too combative, but there are various pending lawsuits throughout the country against LZ, including the unauthorized practice of law. There is a nice summation of these here: http://tinyurl.com/2cw2uf7

    As I mentioned in my reply to him, the thing that bothers me is the shell-game that they play with consumers. They add the word “legal” to their name and have commercials narrated by one of the most famous attorneys in the country, but bury the fact that they don’t practice law in their disclaimer.

    And this whole ‘100% satisfaction guaranteed’ thing is nonsense. You generally don’t know that a will is flawed until you get to probate. A money-back guarantee won’t do you much good at that point.

  • Mike Adams

    I agree with the assertion that an attorney can perform estate planning tasks better than online services. While I generally use forms prepared by the Estate Planning section of my state bar, I have never had a case where I simply filled in the client data without modifying the document to fit the client’s specific needs. Legal services are expensive. The dramatic increase in the use of online services, in addition to the steady increase in pro se court filings, should indicate that the legal community is not adequately meeting the legal needs of a significant portion of the public.

    I don’t think that LegalZoom is going away any time soon. Nolo Press blazed the trail through the UPL minefield years ago and others were sure to follow. I think the question is how can the legal community meet the needs of this very cost-conscious population in a cost effective manner?

  • Joseph Dang

    Document preparation is tedious but easy.

    Document selection, now that’s where the money is!

  • http://myshingle.com/ Carolyn Elefant

    Actually, courts are pretty clear that filling out forms does not constitute practice of law – see Missouri case within this round-up – http://myshingle.com/2010/03/articles/trends/to-win-the-hearts-and-minds-of-consumers-lawyers-need-to-sell-not-sue/ Once providers start giving personalized assistance to form-fillers is where they are most vulnerable to UPL claims.
    I don’t know how the Minnesota statute would be interpreted – it does seem broader and more specific than those discussed in the case cited in my post. I would guess that LZ would argue that it is not preparing the documents, but rather, providing forms that the individual is filling out themselves. That makes sense – after all, if I post a sample of a will on my website and someone takes it and copies it and uses it as their own will, I wouldn’t be deemed to be representing that person. So how is it different if instead of a will, a form template is offered, with individuals filling it out via computer
    I also don’t think consumers are stupid. I have used Turbo Tax for many years – and I know that I am getting a computerized tax program, albeit one prepared with the support of a team of experts. How is LZ for wills any different?

  • http://gregoryluce.com/ Gregory Luce

    I agree with Carolyn on this one. I think lawyers are taking an understandable but overly defensive (and at times offensive) response to providers such as LegalZoom. It found a potentially lucrative niche market, at least niche for now: millions of people who find the task of finding, hiring and working with an attorney inconvenient and expensive. The response from attorneys should not be “let’s prosecute these bastards” but “what can we do to compete effectively and add value that LegalZoom cannot?” Put another way, we actually have a lot to learn from the LegalZooms of the world because, like it or not, they are here to stay and likely growing at a pretty good clip. Ultimately, it means making your practice efficient by adding value, minimizing risk, and reducing costs. It very much means automating as much as you can with your practice so that the time that you have available to think and add value is maximized. I posted recently about this on our own blog, making a crude but necessary analogy to “law on-a-stick.” You can read that here to get a better understanding of where I’m coming from.