Online legal services: dispute over ‘free’ services
America’s two big online legal document brands, both of which are about to launch in the UK, are set to clash in court after LegalZoom launched proceedings against Rocket Lawyer over claims in its marketing that various services are free.
LegalZoom said it has filed a 14-page suit alleging false and misleading advertising, trademark infringement and unfair competition against Rocket Lawyer in the US District Court for the Central District of California.
Rocket Lawyer told Legal Futures that the litigation will have no impact on its UK offering, which formally launches next week.
LegalZoom, which in September announced an exclusive deal with QualitySolicitors, said it is seeking millions of dollars in damages and has pledged to donate any recovery in excess of its costs to legal charities.
LegalZoom claims that RocketLawyer has engaged in “false and misleading advertising”. In a statement, the company said: “LegalZoom believes the facts in this case are clear and compelling and that a jury will understand that RocketLawyer has violated FTC [Federal Trade Commission] guidelines and crossed well over the line in its marketing.
“The lawsuit follows numerous unsuccessful attempts by LegalZoom over the past year to convince Rocket Lawyer to cease the practices which led to the filing of the complaint. Those attempts included providing Rocket Lawyer with a copy of Federal Trade Commission guidelines that impose clear limitations on use of the word ‘free’ in advertising and marketing materials.
“RocketLawyer’s advertising includes the false claims that RocketLawyer provides ‘free incorporation’, ‘free legal review’, and ‘free help from local attorneys’, despite the fact that access to these ‘free’ services can require paying filing fees or buying a paid membership plan.
“This lawsuit is simply about stopping what LegalZoom believes is a deceptive advertising practice. When customers are tricked into believing that services are ‘free’, but then discover numerous fees down the line, they will lose faith in both the law and the industry. Competition is always a healthy dynamic, but fair play requires that all competitors follow the law.”
A Rocket Lawyer spokesman said the company learned about the lawsuit from LegalZoom’s press release and so was unable to comment in detail until it has had an opportunity to review any actual litigation documents.
He said: “We are confident that Rocket Lawyer is fully compliant with all laws pertinent to our business in the US. Along with the licensed attorneys in our On Call network, we look forward to continuing to bring affordable legal services to the consumers and small businesses that depend on us in the US. We do not see this impacting our UK launch or business.”
