Businesses (sort of) cut attorneys out of doc preparation

June 28, 2011
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Consider Bankruptcy DIY and DIY Legal Prep “brick and mortar” versions of LegalZoom and other online legal document preparation businesses. These two franchises, launched nationally by Indiana-based parent company Lee’s Cash, are a response to the pro se movement happening in the U.S. right now, according a company representative.

Looking for something for their tax affiliates to do year round, Lee’s Cash launched these two businesses as a way for people to get legal documents, such as wills or bankruptcy petitions, prepared for a fraction of the cost of hiring an attorney. Chip Moss, vice president of sales, said using either of the DIY services will save someone 75 percent compared to hiring a lawyer.

For example, someone would go to the store and a non-lawyer would gather the information needed to create a will. The form the employees use was created by an attorney. That newly created will is then made available to an attorney who takes a look at it and signs off on it. The customer would also be able to speak with the attorney through videoconferencing technology like Skype with any questions about the will.

Moss said they make it clear there is no attorney-client privilege, but there will be confidentiality. The attorneys are contracted out and work for the DIY businesses, not for the client. They are paid a small retainer and per activity, he said.

Moss doesn’t believe the Rules of Professional Conduct would bind the attorneys if an issue would arise with the preparation of a document. If an issue would come up, the client could file a civil suit against the DIY company.

The companies are relatively new and there is just one franchise in Indiana. Moss said less than 10 franchises have been sold nationwide. Right now there is just a small group of lawyers affiliated with the businesses – only about 5 – which Moss said is because they haven’t aggressively marketed it to attorneys yet.

Attorneys, are you worried that a business like this will affect your practice volume? When LegalZoom and other online legal doc preparation sites went up, did you find your business affected?

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  • Say What
    I love it when I see quotes like "That newly created will is then made available to an attorney who takes a look at it and signs off on it." Give me a break. Yes, I want an attorney being paid $20 to "look at" my will and "sign off on it." People who don't have $250 to $1000 to have a will created probably have no assets to begin with...(No to be mean, but I don't see this being a viable business model.)
  • UPL
    As described, it seems like it's the unauthorized practice of law. See the United Financial case. In addition, if DIY is offering itself as the target of a malpractice case, how can it argue that it is not providing legal advice. On a related note, an attorney offering time and advice and reviewing documents will likely be found to have formed an attorney-client relationship. So, the attorney may be liable as well. However, the attorney may be subject to discipline for aiding and abetting the unauthorized practice of law. The annotated model rules provide examples where attorneys are warned not to participate in these types of ventures. (I cannot determine that the specific facts of this case are violative of Indiana's rules and laws, but there's at least enough there to make a reasonable attorney seriously question whether it's worthwhile to participate.)
    • UPL
      Definitely sounds like UPL to me, PJ, and I think you're right about the A/C relationship. As I understand it, an attorney can't prevent an A/C relationship from forming just by saying so - isn't it the reasonable belief/expectation of the client that determines whether an A/C relationship was established?

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