Medlock v Inc, (S.C. 2013)

LegalZoom sales interactive self-help legal document. The consumer uses a LegalZoom’s web-hosted software that automatically creates legal documents without attorney assistance. The sale is carried out through Internet in all 50 States.

LegalZoom business model has been challenged in a number of States for unauthorized practice of law. However, recently South Carolina Supreme Court approved the company’s business practices.

In 2012 Petitioner – a former state senator and attorney general – commenced an action against LegalZoom claiming that by selling self-help documents to South Carolina residents without attorney assistance, the company was guilty of unauthorized practice of law. Respondent opposed the petition noticing that “the legal documents are available online in South Carolina from a variety of sources, including the websites of state and governmental agencies and courts.”

The parties commenced mediation and settled the dispute. The company basically was found to be operating properly under South Carolina law by not providing legal assistance to its customers in creating the document (and thus do not engaging in the unauthorized practice of law). However, it agreed to pay the plaintiff’s lawyers $500,000 in settling the matter.

Relevant Law: South Carolina Appellate Court Rule 261(b)

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Related documents: Legalzoom.Com, Inc. V. N. Carolina State Bar