US ABS sector gets heavy as LegalZoom give North Carolina Bar a drubbing
Over in the UK there is a polite spat taking place between Coop Legal Services and Quality Solicitors over the impact of ABS legal services providers on the market however over in the US, the ongoing dispute between LegalZoon and the North Carolina State Bar has become a gloves-off affair. In the latest development, LegalZoom has issued the following statement…
After years of attempting to ban LegalZoom’s self-help legal documents and prepaid legal services plans in the State of North Carolina, the North Carolina State Bar conceded last week that the North Carolina state courts are the proper venue to determine the legality of LegalZoom’s document services – not the North Carolina State Bar itself.
“After years of telling us that they are the sole judge and jury for all issues relating to self-help legal document services and prepaid legal services plans in the State of North Carolina, it’s refreshing to see that the North Carolina State Bar has finally adopted our view that this is a matter for the state courts to decide,” said Chas Rampenthal, General Counsel of LegalZoom. “The law in the State of North Carolina is clear: the State Bar does not have the power to make arbitrary decisions regarding self-help legal documents or the power to approve or disapprove any prepaid legal services plan. As we have stated for years, if the North Carolina State Bar truly wanted to resolve these issues rather than protect lawyers, they should have gone to the courts to seek a judgment, which we were finally forced to do after they improperly denied our application for prepaid legal services plans. By following our lead and filing a counter-claim in our lawsuit requesting a ruling on the very issues we requested, we believe the North Carolina State Bar has conceded it has been operating outside the scope of its authority.”
This lawsuit follows ongoing attempts by the North Carolina State Bar to prohibit LegalZoom’s operations in the State of North Carolina and to deny citizens of North Carolina access to the protections of the law through self-help legal document services and prepaid legal services plans in the state. In 2011, the North Carolina State Bar refused to certify LegalZoom’s prepaid legal services plans despite state law explicitly denying them this power. On September 30, 2011, LegalZoom filed a lawsuit against the North Carolina State Bar, seeking declaratory judgment and alleging violations of the State’s Monopoly Clause, violations of LegalZoom’s due process rights, and commercial disparagement.