NCPA - National Center for Policy Analysis

Lawyers vs. LegalZoom

October 16, 2014

LegalZoom is a national company that provides services to individuals and businesses that need help preparing legal documents. The company's services compete with those offered by attorneys, which is what led the North Carolina State Bar to declare the company illegal in 2008. As George Leef explains at Forbes, the state bar charged that LegalZoom was engaged in the "unauthorized practice of law."

Leef reports that the South Carolina State Bar took similar anti-competitive measures when it forbade its members from answering questions on the website JustAnswer. The site provides a forum in which professionals can give advice to individuals seeking answers, but the group forbade its members from participating in 2012.

These allegations have emerged in a case out of North Carolina, in which the state's Board of Dental Examiners, concerned about competition, issued cease and desist orders to businesses offering teeth whitening services from non-dentists. The case has found its way to the Supreme Court, and Legal Zoom and JustAnswer -- in addition to other self-help groups -- have filed an amicus brief supporting the rights of the businesses to offer their whitening services.

Leef notes that these decisions from state boards are made without public scrutiny, and their orders serve to suppress competition from those threatening to provide similar services. As the amici curiae summarize in their brief, "Increasing numbers of low- and middle-income Americans simply cannot afford to hire lawyers to address legal issues they routinely face. This access crisis is caused, in large part, by over-regulation of the legal market and unnecessarily high and complex barriers to entry. Bar associations, similar to the dental board Petitioner here, are often run by active participants in the very market they are empowered to regulate and control, without meaningful state policy direction or active oversight."

Source: George Leef, "Why The Legal Profession Says LegalZoom Is Illegal,", October 14, 2014. 


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