LegalZoom Reaches Class Action Lawsuit Settlement

A preliminary settlement has been reach in a Missouri class action lawsuit against LegalZoom that accuses the legal document preparation service of engaging in the unauthorized practice of law.

LegalZoom.com is one of the largest legal document preparation services on the Web, providing consumers a variety of legal documents for things such as estate planning, trademarks, corporations and more. At the beginning of August, a federal court ruled that LegalZoom’s service goes beyond self-help because of the role played by its human employees who are not authorized to practice law, and who may be “incompetent or unreliable persons.”

The details of the Missouri LegalZoom class action settlement are still being worked out, but it’s reported that the settlement will include compensation for LegalZoom customers. The LegalZoom settlement also reportedly provides that LegalZoom will make certain business modifications in order to keep operating in Missouri.

Details on the business modifications that LegalZoom will make under the class action settlement have not been announced, but they may be similar to a settlement agreement the company made with the Washington Attorney General’s office last year. Under that settlement, LegalZoom agreed to not compare its costs to attorneys’ fees unless the company clearly discloses that its service isn’t a substitute for a law firm. LegalZoom also agreed not to provide individualized legal advice about self-help forms.

Plaintiffs are supposed to file a motion for preliminary approval of the LegalZoom Class Action Lawsuit Settlement by September 23.

The case is Janson v. LegalZoom.com, Inc., Case No. 2:10-cv-04018-NKL, United States District Court, W.D. Missouri, Central Division.