The Dangerous Commoditization of Legal Services

**Originally published Dec 22, 2015; Updated June 8, 2018**

In October of 2014, LegalZoom and Sam’s Club entered into a partnership. In a press release, it was revealed that Sam’s Club customers would soon get discounts on a variety of LegalZoom products.

Specifically, Sam’s Club discount shoppers can get, “a $299 Suite of Estate Planning Products that includes a Last Will or Living Trust, Power of Attorney, and a Living Will, plus a year of unlimited revisions and independent attorney consultations for personalized advice.” Furthermore, Sam’s Club members, “could save up to 25% off all other LegalZoom products, including LLCs, Corporations, Trademarks, and more.” They also get, “LegalZoom’s 100% satisfaction guarantee with lifetime customer support.”

But there are problems that people need to understand.

The Over-simplification of Legal Transactions

In the press release, LegalZoom CEO John Suh stated, “Teaming up with Sam’s Club is a chance for LegalZoom to help more people get peace of mind, protecting what matters most to them at an affordable price.” I don’t have a problem with LegalZoom making legal forms more readily available to the mass market, but I do have a problem with their gross over-simplification of legal transactions related to trademark matters.

As an intellectual property attorney, I believe this over-commoditization of legal “help” ultimately diminishes the importance and value of getting legal guidance and direction in business affairs. This is where the real damage is done when legal transactions are over-simplified.

As attorneys, we are responsible for the information we provide to our clients, and we’re held accountable to look after their best interests. With LegalZoom, the elements of responsibility and accountability are entirely removed from the process. When things go south—and I’ve seen it happen many times—LegalZoom (or any other document filing service or DIY tool) isn’t there to help pick up the pieces. Private attorneys are, and they fix the “legal” damage. There is a lot of fallout from poorly prosecuted transactions in the legal “help” business, and everyone but LegalZoom, or the filing service, is paying the bill.

Cheap Legal “Help” is Misleading and Misguiding

The reality is that we live in a very complex world with very complex laws, rules, and regulations that are changing far too frequently. In my opinion, selling an entry card into that world to individuals and small businesses through cheap legal forms and DIY services is misleading and quite frankly, misguiding.  I think it borders on dangerous.

In intellectual property law, intent is not necessary to commit trademark, copyright, or patent infringement. An unwitting and inexperienced inventor could file a patent application through a document filing service and think he has clearance to market his invention, when the truth is that he is infringing on another’s invention without realizing it. Not only will his patent application be rejected by the U.S. Patent and Trademark Office (responding to that rejection isn’t part of LegalZoom’s discounted fee schedule), but he very well could end up slapped with a nasty infringement law suit and stand to lose a lot more than the attractive fee he paid to LegalZoom. It’s just a travesty.

Educating People about Their Legal Choices

There is clearly a market for legal “help” products, and the legal profession does not always do a good job of meeting that demand. However, there are reasons for that. Attorneys are held to extremely strict and rigid ethical rules and promoting “one size fits all” products would usually cause us to violate at least one of those rules with virtually every client matter. In other words, if we offered this kind of unbundled legal “help” without more counsel and context, we could find ourselves in big trouble.

As a commenter on the American Bar Association’s ABA Journal said about the LegalZoom and Sam’s Club partnership, “I eagerly anticipate a new legal specialty in the burgeoning field of ‘do-over’ law, for people who were too cheap to do it right the first time.”

The truth of the matter is that this type of “do-over” law is already happening. I’ve helped many clients wade through the problems that a cheap LegalZoom trademark application caused because the client wasn’t effectively counseled on how to pick a strong mark, how to properly describe the goods or services, or because LegalZoom’s trademark search for potentially conflicting marks was difficult to understand or interpret. The list of problems that I’ve had to resolve for clients who filed trademark applications through LegalZoom, and other document filing services, goes on and on.

Yes, legal services can be too expensive and access to the courts is far too difficult, but cheap legal “help” products aren’t the answer. Education is the answer.

The adage is true. You get what you pay for, but unless people educate themselves and understand what they’re actually getting for their money, they’ll continue to make choices that might not match their goals. In other words, they might save money on filing a trademark application today by choosing a discount legal “help” option, but they might end up spending a lot more money later to fix the problems that the discount legal “help” caused.