The smaller firm in the cross-hairs...

By David J. Bilinsky

When the walls come crumblin’ crumblin’ – When the walls come tumblin’ tumblin’ down – Lyrics and Music by: George Green, J. Cougar Mellencamp

As of yesterday – March 4, 2010 (the day of writing this column) the Canadian legal competitive battlefield changed. Dynamic LawyersTM, led by Michael Carabash, B.A., LL.B., J.D., M.B.A., Founder/President, formally launched their website: www.dynamiclawyers.com.

Have a look – Carabash, a Toronto business lawyer, is one of a growing list of new entrants into the area of online legal services. What makes his web services a bit different is the use of online video guides that aid purchasers to complete the legal forms that he has made available. He also has a blog: http://dynamiclawyers.com/DL_blog/ and an “online legal health checkup”: http://dynamiclawyers.com/cois_interview.php.

Dynamic LawyersTM joins other online legal service providers such as LegalZoom: www.legalzoom.com

that are seeking to tap the “do it yourself” legal consumer market.

Should lawyers take these new competitive entrants seriously? LegalZoom claims to have more than one million satisfied customers. Even if their profit is just $10/customer, that is still a cool $10 million dollars. Not bad for wills, incorporations and trademarks. But their profit appears to be more, much more.

IP Watchdog blog (http://tinyurl.com/ylejlmr), in talking about a suit between an LA lawyer named Seton who specialized in non-profit corporations and LegalZoom, stated that:

“The complaint alleges that Seton and LegalZoom entered into a joint venture in which customers of LegalZoom would fill out forms on the LegalZoom website and those forms would be sent to Seton to finalize the formation of a nonprofit entity. LegalZoom was paying Seton a fixed fee of $350 per completed application. In total, Seton received $1.6 million from LegalZoom since the venture.”

The same blog stated in a blog post on Feb 19, 2010 (http://tinyurl.com/ygpnohj):

“AUSTIN – Gov. Rick Perry today announced the state will invest $1 million through the Texas Enterprise Fund (TEF) in LegalZoom.com for the relocation of certain office functions from Los Angeles to Austin. This investment will create up to 600 jobs and more than $11.7 million in capital investment.”

Should people be taking entrants such as LegalZoom seriously? Missouri, North Carolina and Connecticut have launched actions against LegalZoom or similar services, reports Law.com (http://tinyurl.com/ycpokbx) for the unauthorized practice of law. In talking about the Connecticut investigation, it is stated:

“Mark Dubois, chief disciplinary counsel for the state, said he has received no complaints from people who use online businesses to obtain legal documents for services such as incorporations, wills, real estate deeds and divorce agreements. These are known as ‘commodity’ services in the legal profession.

“From what I see and hear, much of the commodity work (from online providers) is pretty good,” said Dubois, who was a member of the CBA’s task force. “A lot of lawyering is not rocket science. It is using an existing form or format. This commodity work is the easiest to ship electronically to the cheapest provider and will be the first part of traditional legal services to be lost forever by the small practitioners.”

All it will take is a precedent-setting court decision that these online providers are not engaging in the unauthorized practice of law for the walls to come crumblin’, tumblin’ down.

The views expressed herein are strictly those of the author and may not be shared by the Law Society of B.C. David J. Bilinsky is the Practice Management Advisor for the LSBC. Email: daveb@lsbc.org; Blog: www.thoughtfullaw.com.

This article originally appeared in the April 2010 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.