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Login | March 28, 2024

Legal Zoom can employ lawyers in Arizona. What’s next?

RICHARD WEINER
Technology for Lawyers

Published: November 26, 2021

A recent ruling by the Arizona Supreme Court allows virtual law helper Legal Zoom to employ lawyers in Arizona—an ability previously reserved to licensed attorneys.
The permission from Arizona’s high court is a part of the expansion of Alternative Business Structures (ABS) that are starting to creep into the law business. A legal ABS is a hybrid “lawyer-plus” business, where lawyers are allowed to go into business with non-lawyers.
To this point, only Arizona and Utah are allowing lawyers to get into ABS structures. Many European countries have allowed them for some time.
The Legal Zoom (officially, LZ Legal Services) permit is only the eighth or so allowed in Arizona since the state allowed the existence of ABS’s. The previous ones, though, were the sort of lawyer—accountant business structures that one would expect an attorney’s office to want to get into.
The Legal Zoom deal, however, is something else—a huge expansion into uncharted ABS territory with a company that has just had a successful IPO that gave the company a market cap of almost $5 billion at the end of October 2021. That gives the company, certainly, enough cash to throw their weight around anywhere that they want to do business. Like, I don’t know, Ohio—home of some huge multinational firms up Cleveland way.
The largest law firms are probably not shaking in their boots over this, but smaller firms may definitely feel a pinch if LZ decides to invade the Midwest. Legal Zoom provides online services that are the bread-and-butter of small and solo practices, including contracts, domestic relations documents, incorporations and other business formations, wills, and other uncomplicated, generalized services.
Legal Zoom released a statement concurrent with the Arizona Supreme Court ruling, framing it as and opportunity “to bring innovative new solutions to market.” The “competition is good for the law business” trope is how the European ABS companies frame their legal positions.
The LZ statement went on to say (or warn, depending on how you take it), the “we encourage other states to pursue similar reforms.” Ready or not, they are looking at you, Ohio.


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