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WSJ — No-Frill Legal Services Grow; LegalZoom versus Rocket Lawyer lawsuit requires retaining actual lawyers–forms won’t cut it

In August, I wrote about the Consumer Reports evaluation of online do-it-yourself legal sites (Legal DIY sites no match for a pro). This week, Wall Street Journal reporter Jennifer Smith writes on “No-Frill Legal Services Grow,” addressing many of the same DIY websites.

The impetus for the article is the lawsuit filed last month by LegalZoom.com against up-and-coming rival Rocket Lawyer. It is ironic that these entities are now fighting over what is and is not “free” in terms of form filing and other stuff where you apparently either don’t need a lawyer, or perhaps just need one that works for them at really cheap rates. Interesting side note: Both LegalZoom and Rocket Lawyer have real lawyers doing the fighting–I don’t think they are using their own self service offerings.

The debate often revolves around the potential “unauthorized practice of law.” Regardless of the semantics involved, the consumer is thinking this is a cost-effective way to resolve a legal issue. It is not like this business is new. Strip malls stores (Divorce! Bankruptcy! Wills!) have provided similar services for decades. Storefronts such as “We the People” have largely evaporated (thanks in part to the Internet and in part to State Bar issues with unauthorized practice). In recent years, the online offerings have changed the language in describing offerings to something akin to providing documents and/or providing a lawyer somewhere that can answer questions.

I’ve rarely seen any (non-anecdotal) data that shows the bottom line impact on the lawyers that practice in many of these consumer and small business spaces. My guess is that many of these companies will (accurately) tell you the amount of revenue opportunities they are generating for solo and small law firm attorneys that might be hurting for business should not be discounted. “We are hiring lawyers and getting them clients!”

If you can’t beat them, join them

Many lawyers and law firms are getting into the business of online delivery of legal services. My ABA colleague Stephanie Kimbro (quoted in the WSJ article) provides web-based services to clients. The article mentions Jacoby & Meyers as entering the online legal forms business. For practitioners, there is a realization that automation and use of online delivery services will be one way to combat lost business (and generate more by charging less). However, the dollars will need to be competitive. As an attorney, it is hard for me not to suggest that these “online legal document” businesses–which most customers see as an adequate law firm substitute–are not damaging to both the lawyer and the client. I’m not only a lawyer, but I’m a client. I’ve gone to colleagues over the years for assistance in real estate matters, estate planning, intellectual property, employment law issues, and for friends (not me, friends), criminal and family law issues–all what I would call consumer-based matters. In every instance, I can think of a component that simply would not have been identified or resolved properly without a sharp lawyer’s eye. Documents don’t issue spot. They try, but they don’t.

This leaves us with the dilemma of where these online services belong in the legal spectrum, whether it is proper or realistic for the ABA or a State Bar to play much of a role in their existence, and many lawyers that are walking a fine line–providing many of the exact same services online, but arguing that they are positioned to do so as licensed attorneys and not simply a “not a law firm” business. One thing that can’t be debated, in looking at LegalZoom and Rocket Lawyer–they would not be fighting over these issues if there were not huge bucks on the table. And based on previous governmental and political responses to Joe Consumer being provided with affordable legal services, there will be continued growth. And much of it will be attorneys recognizing that they need to operate in this space as well.