It’s been a while since we revisited our LegalZoom series. Greg is still on Step 3. In the meantime, we learned about a new class action suit against Legal Zoom. Although it’s not breaking news, it’s an interesting ongoing issue for attorneys to follow. Here’s a roundup of  articles and summaries:

• Class Claims LegalZoom Is Unfair & Misleading (Courthouse News Service)
• LegalZoom Class Action Lawsuit (Wills, Trusts & Estates Prof Blawg)
• LegalZoom Class Action Lawsuit (Elia Ellexson) and LegalZoom Responds

At practicelaw we’re debating the likelihood they will win (and we’ve also been hotly debating the merits and demerits of the service, with a point-counterpoint post coming soon). But LegalZoom has been sued before. Is anything different this time?

• They are being sued by the executor of an estate  in California who claims there were problems with the will and trust, and is primarily claiming unfair and deceptive business practices.
• Other class action lawsuits against LegalZoom focus on the unauthorized practice of law.

On the UPL side, they are a big company that has no doubt spent lots of time and money thinking about the UPL issue.  Plus, a UPL claim sort of feels like lawyers trying to control their market.  But allegations of unfair and deceptive business practices might hold more weight, especially in an economy where we are increasingly trying to protect consumer rights.

What do you think of the merits of the suit? Or about how LegalZoom changes our businesses? We know Greg’s position that LegalZoom might be good for a market under-served by attorneys.  As the estate planning attorney in the group, I’ll admit that it’s probably good for people who truly can’t afford attorneys, but I would guess that this isn’t most of their market. (In fact, if you add up Legal Zoom’s Premium services for the standard set of estate planning documents, I know many attorneys who charge about the same, if not less.)

Rather, I see three main takeaway points from this discussion: 1) Estate planning attorneys do a bad job of marketing to people who are used to buying things online, have busy schedules, and think attorneys are all really expensive (or just can’t figure out how much we cost). We can’t compete on price, but we can compete on value. 2) LegalZoom’s “customer satisfaction” is really just a false sense of security in documents that the client don’t really understand (and have no way of testing until they die). Many may turn out fine, but they are taking a risk — and might not appreciate how big of a risk it is — just with a slight changes in circumstances. 3) Even people who might be well-served by a LegalZoom document might not pick the appropriate documents or the best options within them (e.g., making a will but no power of attorney or health care directive; making a will but no trust or other provisions for minor children besides naming a guardian).

We’ve had many interesting discussions in the office on this topic, and Greg and I will post a Point/Counterpoint discussion as part of this series.

I doubt we can truly solve this debate without surveying the people who purchase on LegalZoom, finding out why they did or didn’t hire an attorney, and seeing how many more DIY wills and trusts end up in litigation.

If you’re also grappling with this issue, consider this food for thought:

• To Win the Hearts and Minds of Consumers, Lawyers Need to Sell, Not Sue (MyShingle) (discussing the unauthorized practice of law class action lawsuit)
• LegalZoom Sued, Is Legal Zoom My Competitor? and 3 Things Attorneys Can Learn from LegalZoom (Oregon Estate Planning Blog)
• Suit Claims LegalZoom’s Document Prep Is Unauthorized Practice of Law (ABA Journal).  This article is about the UPL suit, but if you’re interested in this topic I highly encourage you to skim through the comments.  The discussion we’ve been having at practicelaw hits many of the same issues.
• The Dangers of Do It Yourself: A Cautionary Tale (Massachusetts Estate Planning and Elder Law blog)
• In a U.S. News and World Report Article, Kimberly Palmer Writes about Dangers of DIY Estate Planning (Future of the Federal Estate Tax blog)
• LegalZoom and the Dangers of DIY Estate Planning (Future of the Federal Estate Tax blog)