Here’s the text of the September 16, 2010, press release from the Washington Secretary of State:

Washington Attorney General zooms in on LegalZoom’s claims

DIY legal forms aren’t a substitute for an attorney

SEATTLE – If you’ve watched cable TV, you’ve likely seen celebrity attorney Robert Shapiro tout his company, LegalZoom, as a way to start businesses, patent inventions and create wills. “We put the law on your side,” he says.

But the Washington Attorney General’s Office wants to be sure consumers aren’t misled by LegalZoom’s cost-saving claims.

“LegalZoom offers do-it-yourself legal documents online but can’t provide you with legal advice or tell you which forms to fill out,” Attorney General Rob McKenna said.

Under a settlement with the Attorney General’s Office, LegalZoom can’t compare its costs to attorneys’ fees unless the company clearly discloses that its service isn’t a substitute for a law firm.

Simply selling legal forms doesn’t constitute the practice of law. LegalZoom can only provide an online form service that allows consumers to choose and complete their own legal documents, explained Consumer Protection Division Chief Doug Walsh.

The agreement filed today in Thurston County Superior Court also prohibits LegalZoom from engaging in the unauthorized practice of law, selling personal information obtained from Washington customers or misrepresenting the benefits of any estate distribution document.

Additionally, the agreement requires LegalZoom to ensure any forms sold to Washington consumers comply with local laws. Walsh said the Attorney General’s Office was concerned LegalZoom’s estate planning documents weren’t sufficient for all Washington state residents. For example, the company doesn’t offer a Community Property agreement form, a document commonly combined with a simple will in order to avoid probate when there is a surviving spouse. If consumers need individualized advice about estate planning legal documents, they are well advised to consult an attorney.

The Assurance of Discontinuance

Legalzoom and the Washington State Attorney General entered into a settlement agreement called “Assurance of Discontinuance” submitted to the court  that states “the Attorney General deems the following to constitute unfair or deceptive acts or practices and unfair methods of competition in violation of RCW 19.86.020:

1.  Comparing, directly or by implication, the costs of Respondent’s self-help products . . . and clerical services with those provided by an attorney, without, in close proximity to each such comparison, clearly and conspicuously disclosing to Washington consumers that Respondent is not a law firm and is not a substitute for an attorney or law firm.

2.  Misrepresenting, directly or by implication, the costs, complexity and time required to probate an estate in Washington.

3.  Misrepresenting, directly or by implication, the benefits or disadvantages of any estate distribution document as compared to any other estate distribution document in Washington.

4.  Engaging in the unauthorized practice of law . . . by providing individualized legal advice about a self-help legal form to Washington consumers.

5.  Failing to offer estate planning legal forms in Washington that conform to Washington law.

[Author’s comment for do-it-yourselfers:  Do you really want to buy legal forms from an outfit that doesn’t sell forms that company with applicable state law?]

6.  Failing to have an attorney, licensed to practice law in Washington, review all self-help estate planning forms offered for sale to Washington consumers.

7.  Selling, transferring, or disclosing Washington consumer information to third parties obtained in the course of consumers acquiring estate planning legal forms [Author’s comment:  Wow!]

8.  Failure to clearly and conspicuously disclose that communications between Respondent and Washington consumers are not protected by the attorney-client or work product privilege.

Legalzoom did not admit it did anything wrong, but it did enter into the Assurance of Discontinuance.

For more on this topic see “LegalZoom and Washington State Reach Agreement Over Unauthorized Practice of Law,” which states “the most egregious charge leveled against LegalZoom is that they sold, transferred or otherwise disclosed consumer information to third parties.”