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Sunday, May 22, 2022

LegalZoom Alleges Federal Antitrust Violations

LegalZoom.com Inc. has sued the North Carolina State Bar Association, accusing the professional organization of violating federal antitrust laws by trying to prevent the company from selling its legal service plans in the state.

The Glendale online legal services company is seeking $10 million in damages in the lawsuit filed Wednesday in U.S. District Court in North Carolina. It also wants a court order forcing the bar association to certify LegalZoom’s prepaid plans.

According to LegalZoom, the company has tried to get its plans registered with the bar association, a legal requirement, but the group has refused, maintaining the plans constitute the unauthorized practice of law.

The company, founded in 2001, sells online legal documents for individuals and small businesses, and has a history of courtroom jockeying with state bar trade groups. That fighting has heated up as the company has offered prepaid legal service plans that allows customers to talk to attorneys on the phone.

Bar associations in at least eight states have sued the company, claiming its services violate regulations that specify only law firms can offer legal advice. But the company has managed to make them available in 42 states, and customers have scheduled more than 200,000 attorney consultations, according to the company.

Ken Friedman, vice president of legal and government affairs at LegalZoom, believes the North Carolina bar is seeking to limit competition and enrich its membership of private attorneys illegally.

“We are forced to ask a court to stop the North Carolina State Bar from trying to prevent the sale of services that would benefit North Carolinians and would expand their access to affordable legal help,” he said in a statement. “The plans would provide customers with efficient and affordable access to legal advice from licensed North Carolina lawyers.”

LegalZoom previously sued the North Carolina bar in 2011 but that case was thrown out of state court pending a full decision by the bar, which Legal Zoon said was finally handed down this spring.

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