Perhaps. LegalZoom.com promises “personalized, affordable legal protection” to would be clients all over the country. Among other services, it offers bankruptcy solutions “tailored to your situation,” “personalized” wills “specific to your state,” DWI defense, personal injury representation and customized prenuptial agreements. LegalZoom is not alone. Other web-based providers/advertisers such as AttorneyFee.com offer similar services.
Are such sites facilitating the unauthorized practice of law in Louisiana? LegalZoom expressly offers legal services in Louisiana, and designates the “participating bankruptcy attorney” in this state as “Daniel Ruggiero.” But no “Daniel Ruggiero” is listed in the Louisiana State Bar Associations Membership Directory. His law firm, the Law Offices of Prince & Associates, LLC, purports to be a “national law firm with licensed attorneys in all 50 states.” But the firm is not registered with Louisiana Secretary of State, and no lawyer associated with it appears to be listed in the LSBA member directory.
LegalZoom has been accused of engaging in UPL in other states. Most recently, an Arkansas consumer sued the Delaware company and alleged that “LegalZoom.com’s document preparation was engaged in the unauthorized practice of law in Arkansas” in violation of the Arkansas Deceptive Trade Practices Act. In early October 2013, the Supreme Court of Arkansas granted the company’s motion to compel arbitration, but referred the matter to the court’s Committee on the Unauthorized Practice of Law. See LegalZoom.com, Inc. v. McIllwain, No. CV-12-1043 (Oct. 3, 2013). Legal Zoom has seen its fair share of litigation, and has met with varied results. See Lowry v. LegalZoom.Com, Inc., No. 4:11CV02259, 2012 WL 2953109 (N.D. Ohio July 19, 2012) (plaintiff’s case dismissed because Supreme Court of Ohio had not previously found company engaged in UPL); LegalZoom, Inc. v. North Carolina State Bar, 2012 WL 3678650 (N.C. Super Aug. 27, 2012) (settled during litigation); Janson v. LegalZoom, Inc., 802 F. Supp. 2d 1053 (W.D. Mo. 2011) (settled after adverse interlocutory ruling finding LegalZoom to be engaged in UPL for document preparation system through which “[t]he customer merely provides information and ‘LegalZoom takes over.'”).
Unauthorized Practice of Law Standards in Louisiana
Defining the “practice of law” is notoriously difficult. See LSBA v. Carr & Assoc., Inc., 15 So. 3d 158 (La. Ct. App. 1st Cir. 2009) (“unauthorized practice is a concept that is difficult to define and is fact-specific”). In 2002, the ABA established a “Task Force on the Model Definition of the Practice of Law,” in an effort “[t]o determine the best approach for the Association to address whether to create a model definition of the practice of law that would support the goal to provide the public with better access to legal services, be in concert with governmental concerns about anticompetitive restraints, and provide a basis for effective enforcement of unauthorized practice of law statutes.” See ABA President’s Challenge Statement (2002). After significant work, however, the best that the task force could come up with was that each state should come up with it’s own definition, which should include the basic premise that “the practice of law is the application of legal principles and judgment to the circumstances or objectives of another person or entity.” See Recommendation as Adopted by ABA House of Delegates (Aug. 11, 2003).
The Louisiana Supreme Court has used a functional analysis to evaluate whether the conduct of a nonlawyer constitutes the “practice of law.” In Louisiana State Bar Ass’n v. Edwins, the court held as follows:
Functionally, the practice of law relates to the rendition of services for others that call for the professional judgment of a lawyer. The essence of professional judgment of the lawyer is his educated ability to relate the general body and philosophy of law to a specific legal problem of a client; and, thus, the public interest will be better served if only lawyers are permitted to act in matters involving profession judgment.
La. State Bar Ass’n v. Edwins, 540 So. 2d 294 (La. 1989). The Edwins court noted that the practice of law includes, “conveyancing, the preparation of legal instruments of all kinds, and in general, all advice to clients and all action taken for them connected with the law.” Id. at 300 (quoting Meunier v. Bernich, 170 So. 571 (La. Ct. App. 1936)). Upon considering the extent to which a lawyer may work with a paralegal in delivering legal services, the court opined: “that he or she must supervise closely any such person to whom he or she delegates other tasks, including the preparation of a draft of a legal document or the conduct of legal research; and that the lawyer must not under any circumstance delegate to such person the exercise of the lawyer’s professional judgment in behalf of the client or even allow it to be influenced by the non-lawyer’s assistance.” Id. Applying these principles, the court found that the paralegal in question improperly provided legal advice to the client, prepared and filed motions and exercised professional judgment without the supervision of the lawyer.
The Louisiana Legislature has defined the practice of law in Louisiana Revised Statutes section 37:212 to include the following activities:
(1) In a representative capacity, the appearance as an advocate, or the drawing of papers, pleadings or documents, or the performance of any act in connection with pending or prospective proceedings before any court of record in this state; or
(2) For a consideration, reward, or pecuniary benefit, present or anticipated, direct or indirect;
(a) The advising or counseling of another as to secular law;
(b) In behalf of another, the drawing or procuring, or the assisting in the drawing or procuring of a paper, document, or instrument affecting or relating to secular rights;
(c) The doing of any act, in behalf of another, tending to obtain or secure for the other the prevention or the redress of a wrong or the enforcement or establishment of a right; or
(d) Certifying or giving opinions, or rendering a title opinion as a basis of any title insurance report or title insurance policy as provided in R.S. 22:512(17), as it relates to title to immovable property or any interest therein or as to the rank or priority or validity of a lien, privilege or mortgage as well as the preparation of acts of sale, mortgages, credit sales or any acts or other documents passing titles to or encumbering immovable property.
LA. Rev. Stat. § 37:212. In addition to the statutes governing the practice of law, the Louisiana Rules of Professional Conduct provide further guidance as to what constitutes the “practice of law.” Rule 5.5 (e)(3) provides that the practice of law includes the following:
(i) holding oneself out as an attorney or lawyer authorized to practice law;
(ii) rendering legal consultation or advice to a client;
(iii) appearing on behalf of a client in any hearing or proceeding, or before any judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body operating in an adjudicative capacity, including submission of pleadings, except as may otherwise be permitted by law;
(iv) appearing as a representative of the client at a deposition or other discovery matter;
(v) negotiating or transacting any matter for or on behalf of a client with third parties;
(vi) otherwise engaging in activities defined by law or Supreme Court decision as constituting the practice of law.
La. Rules of Professional Conduct Rule 5.5(e). Other factors that Louisiana courts have considered in finding nonlawyers to be engaged in the practice of law include: (1) being remunerated on a contingent or percentage-based basis; (2) giving advice regarding insurance coverage, see LSBA v. Carr, 15 So. 3d at 170; (3) negotiating the settlement of personal injury claims, see La. Claims Adj. Bureau, Inc. v. State Farm Ins. Co., 877 So. 2d 294, 299 (La. Ct. App. 2d Cir. 2004) (citing Duncan v. Gordon, 476 So. 2d 896 (La. Ct. App. 2d Cir. 1985)); and, (4) charging a fee for law-related advice, see State v. Kaltenbach, 587 So. 2d 779, 786 (La. Ct. App. 3rd Cir. 1991)).
LegalZoom’s Law-Related Information and Services
LegalZoom provides a wide range of law-related services. On one side of the spectrum, LegalZoom just provides legal information and blank forms. This conduct cannot fairly be maligned as UPL, particularly when the advice and forms are not specifically tailored to any individual “customer,” and when no lawyer-client relationship is formed.
On the other side of the spectrum, LegalZoom seems to offer to provide lawyers to represent clients in court. However, LegalZoom makes it clear that this portion of its site is merely an advertisement:
ATTORNEY ADVERTISEMENT: This portion of the LegalZoom website is an advertisement. This portion of the LegalZoom website is not a lawyer referral service. LegalZoom does not endorse or recommend any lawyer or law firm who advertises on our site. We do not make any representation and have not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. The information contained on this site is not legal advice. Any information you submit through this site may not be protected by attorney-client privilege and may be provided to attorneys for the purpose of determining your need for legal services. All case evaluations are performed by a participating attorney.
Assuming that there is nothing “false or misleading” about these advertisements, that they otherwise comply with the advertising rules and that they do not lead to impermissible fee sharing between lawyers and LegalZoom, there is nothing objectionable about directing prospective clients to licensed Louisiana lawyers.
The difficulty, however, lies in between providing legal information and providing a licensed lawyer. LegalZoom offers “personalized” legal documents that are “tailored to your situation,” and “specific to your state.” If the decision trees and algorithms that drive LegalZoom’s form-filling software implement the considered “professional judgment of the lawyer” using an “educated ability to relate the . . . law to a specific legal problem of a client,” its document-preparation service could be tantamount to the practice of law under the Louisiana Supreme Court’s Edwins case. More readily apparent is that its software facilitates the “drawing . . . or the assisting in the drawing . . . of a paper, document, or instrument affecting or relating to secular rights”—something that is expressly prohibited by Louisiana’s UPL statute.
The larger question, perhaps, is a normative one. Should the state forbid such “tailored” and “personalized” solutions—solutions that could help the general public and lower transaction costs? A question for a future post…..