LegalZoom or IllegalZoom?

by Womble Bond Dickinson

LegalZoom, the online legal documents preparation service, is seeking a toehold in North Carolina by amending the statutory definition of the practice of law in G.S. 84-2.1 over the objections of the North Carolina Bar. The fight has spilled over from the Business Court in the Legislature making two of our three branches of government the battleground.

As we've already reported, the Senate Judiciary Committee produced a PCS for HB 663 that eliminated all language about farm commodity food safety and replaced it with a change to the scope of the practice of law that would allow LegalZoom and others to operate legally in NC. The word in the halls of the legislature was the NC Bar was given a heads up but not ample time to rally the troops to the cause. The bill passed committee and was added to the Senate Calendar for July 1st, and then for July 9th, and then it was sent to the Senate "Parking Lot", or the Rules Committee. But this bill didn't die in Rules; it's still got a pulse.

Senate Leadership has been pushing the NC Bar to work with LegalZoom to reach a compromise which it appears has happened, and today we got a look at the language that we think will be the new bill.

New language for HB 663: 

(2)   The production, distribution or sale of materials, provided that:
(a)     The production of the materials must have occurred entirely before any contact between the provider and the consumer;
(b)    During and after initial contact between the provider and the consumer, the provider’s participation in creating or completing any materials must be limited to typing, writing, or reproducing exactly the information provided by the consumer as dictated by the consumer or deleting content that is visible to the consumer at the instruction of the consumer;
(c)    The provider does not select or assist in the selection of the product for the consumer; provided, however, (i) operating a website that requires the consumer to select the product to be purchased, (ii) publishing descriptions of the products offered, when not done to address the consumer’s particular legal situation and when the products offered and the descriptions published to every consumer are identical, and (iii) publishing general information about the law, when not done  to address the consumer’s particular legal situation and when the general information published to every consumer is identical, does not constitute assistance in selection of the product;
(d)   The provider does not provide any individualized legal advice to or exercise any legal judgment for the consumer; provided, however, that publishing general information about the law and describing the products offered, when not done  to address the consumer’s particular legal situation and when the general information published to every consumer is identical, does not constitute legal advice or the exercise of legal judgment;
(e)    During and after initial contact between the provider and the consumer, the provider may not participate in any way in selecting the content of the finished materials;
(f)     In the case of the sale of materials including information supplied by the consumer through an internet web site or otherwise, the consumer is provided a means to see the blank template or the final, completed product before finalizing a purchase of that product;  
(g)    The provider does not review the consumer’s final product for errors other than notifying the consumer (i) of spelling errors, (ii) that a required field has not been completed, and (iii) that information entered into a form or template by the consumer is factually inconsistent with other information entered into the form or template by the consumer;
(h)    The provider must clearly and conspicuously communicate to the consumer that the materials are not a substitute for the advice or services of an attorney;
(i)      The provider discloses its legal name and physical location and address to the consumer;
(j)      The provider does not disclaim any warranties or liability and does not limit the recovery of damages or other remedies by the consumer; and
(k)    the provider does not require the consumer to agree to jurisdiction or venue in any state other than North Carolina for the resolution of disputes between the provider and the consumer.
For purposes of this subsection, “production” shall mean design, creation, publication or display, including by means of an internet web site; “materials” shall mean legal written materials, books, documents, templates, forms, or computer software; and “provider” shall mean designer, creator, publisher, distributor, displayer or seller.

House Judiciary Chairman Leo Daughtry tells us the House is still pretty cool to the idea. And we're nearing the twilight of the session.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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