LegalZoom agrees to limits on its marketing to avoid confusing consumers
Under an agreement reached with the attorney general's office, LegalZoom can continue to sell these forms online, but it can't compare its costs to those charged by attorneys unless it discloses that its services are not the same as going to an attorney.
The agreement, which finds no wrongdoing on the part of LegalZoom, also prohibits the company from practicing law, selling consumers' personal information or misrepresenting the pros and cons of any estate distribution document.
Washington's Consumer Protection Chief Doug Walsh, who worked on the case, told Consumer Ally that some consumers seek out online services because they're reluctant to visit an attorney.
"I think the problem is that consumers generally don't have legal training, so they're looking for legal help or advice and maybe they're a little intimidated of going to an attorney," Walsh said. "Maybe they've had a bad experience with an attorney ... so there's a temptation to find a way to get their legal services needs met."
But the danger is that the documents consumers end up paying for may not be tailored to them, Walsh said.
"Their service is simply based on what you tell them to fill in the blanks," he said.
[Update 9/28] Chas Rampenthal, vice president and general counsel for LegalZoom, said in an e-mail that the company has always disclosed on its web site that its services are not a substitute for the advice of an attorney. He added that the company has always refrained from the activities mentioned in the agreement and that the company has never been prohibited from offering its services in any of the 50 states, including Washington.
"LegalZoom provides a service for people to protect their families and launch their dreams," Rampenthal wrote. "Many cannot afford traditional hourly legal services. We believe that LegalZoom is filling a need that until now has gone largely unmet and that legal documents should not be a privilege only for the wealthy."
On its website, LegalZoom describes itself as an "easy-to-use, online service" that helps people create their own legal documents. Consumers fill out an online questionnaire, which is then checked for spelling, grammar and consistency before a document is printed. But for certain documents, such as a pre-nuptial, the web site explains that an experienced attorney will carefully review the answers and provide legal advice and counsel.
Some of the company's supporters, according to its website, include well-known names such as Sean Hannity, Laura Ingraham and Dennis Miller.