LegalZoom sues Rocket Lawyer for false advertising, unfair competition

LegalZoom claims that its rival’s “free” services actually require customers to pay membership and filing fees

Online legal document service LegalZoom.com Inc. is suing its competitor, Rocket Lawyer Inc., for allegedly violating Federal Trade Commission (FTC) guidelines with false and misleading advertising, trademark infringement and unfair competition.

According to LegalZoom, Rocket Lawyer claims to provide “free incorporation,” “free legal review” and “free help from local attorneys,” even though some customers must purchase membership plans or pay filing fees to take advantage of those services. LegalZoom also alleges that its rival engaged in unfair competition by registering online domain names including www.legalzoomgadget.com.

Founded in 2001, LegalZoom allows users to create their own low-cost legal documents, including wills, patent applications, pre-nuptial agreements and real estate leases. It filed for a $120 million initial public offering in May. Rocket Lawyer got its start in 2008, and provides free legal forms, along with extra pre-paid legal plans that cost between $9.99 and $39.95 per month. Last August, it received $18.5 million from a group of venture capitalists that included Google Ventures.

LegalZoom announced it is seeking “millions of dollars” in damages, which it will donate to non-profit organizations. Rocket Laywer, meanwhile, has pledged to “vigorously defend itself against LegalZoom’s false accusations,” according to Tech Crunch.

Read more at the Wall Street Journal Law Blog.

For more InsideCounsel coverage of the two companies, see:

LegalZoom and Missouri reach a statement

Technology: Our profession is forever changed

LegalZoom.com faces class action

Contributing Author

Alanna Byrne

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