LegalZoom and Sam’s Club to Offer Law-Related Products and Services

sams-club-vector-logo-400x400LegalZoom, a web-based company offering a wide range of law-related services, has announced that it will partner with the retail giant Sam’s Club to offer its services to Sam’s members at discounted rates. According to the ABA Journal, the new partnership will allow Sam’s Club members to purchase LegalZoom products at up to a 25%  discount.

legalzoom_logo_2012_rgb_smallThis partnership raises disciplinary questions. First, as noted in an earlier post here, LegalZoom may be engaged in the unauthorized practice of law (see Rule 5.5) by selling personalized legal documents tailored to its customers’ circumstances. The company has been sued for the unauthorized practice of law in several states, including California, Missouri, Washington, Alabama, Ohio, and Arkansas. Some suits have settled, and others have been dismissed or sent to arbitration. Whether LegalZoom is engaged in the unauthorized practice of law has yet to be considered by a Louisiana court.

Second, if LegalZoom is engaged in the practice of law—whether authorized or not—the sharing of profits with Sam’s Club may constitute impermissible fee sharing with a nonlawyer in violation of Rule 5.4. That rule strictly forbids a lawyer from forming a partnership with a nonlawyer “if any of the activities of the partnership consist of the practice of law.”

We will explore both of these potential problems in future posts.