Legalzoom Complaint, Again

In its nine years or so of business, Los Angeles-based Legalzoom.com has earned praise, awards, quite a bit of money, and most recently…a 5-million dollar class-action petition.

In 2008, a Missouri man, Todd Janson, used Legalzoom to prepare a Last Will and Testament. Perhaps dissatisfied with the service, Janson filed a petition against Legalzoom in the District court of Cole County, Missouri titled Todd Janson on Behalf of Himself and all other Missourians similarly Situated v. Legalzoom, Inc. In January 2009, a class-action petition was filed, which included Todd Janson and C&J Remodeling (and any other Missourians who had used Legalzoom since 2004). C& J had used Legalzoom to create Articles of Organization for their business. Todd Janson, et al. are seeking $5 million in damages from Legalzoom.

The plaintiffs argue that Legalzoom is not authorized to practice law in the state of Missouri. Legalzoom has responded with a pleading to take the case to the federal level, on the grounds that: (1) there are more than 100 people involved, (2) defendants and plaintiffs are from different states, and (3) according to Legalzoom’s calculations, the amount of money sought by the plaintiffs would be well over $5 million, when all Missouri Legalzoom users since 2004 are accounted for.

The outcome of this dispute may not be realized for some time, but the case has interesting implications for service-based online businesses. Poor service may be the real complaint Janson and his associates have, not the unauthorized practice of law. Certain statutes may need to be re-examined as technology continues to change the way business operates.

Legalzoom.com has an A+ rating with the BBB.