North Carolina Lawyers Weekly
The list of businesses fighting the N.C. State Bar over its ongoing efforts to push Internet-based legal services providers out of the state keeps growing.
World Law South last week became the latest to sue the bar, following LegalZoom.com. Another company, Lienguard, is being sued by the bar and has filed a counterclaim against the agency.
The suits center on the bar using public cease-and-desist letters to accuse online businesses of the unauthorized practice of law. The businesses contend that their services are legal, that the bar’s behavior is monopolistic and that its written demands to cease operations in the state are unenforceable without court orders.
But World Law South’s complaint also involves allegations of mistaken identity. The business claims in a suit filed Aug. 19 in Wake County Superior Court that the bar and the state Attorney General’s Office have wrongly identified its affiliate, the World Law Group, as being tied to a Texas debt settlement company called Swift Rock Financial.
The bar and AG are suing Swift Rock for unfair and deceptive trade practices and unauthorized practice of law. The suit names the World Law Group, among others, as entities of Swift Rock and Attorney General Roy Cooper has referred to the Swift Rock defendants collectively as the World Law Group in news releases and while speaking with reporters.
But World Law South and the World Law Group have no ties to Swift Rock, according to their attorney, Alfred P. Carlton Jr. of Raleigh. He said the state’s “astounding misstep” has caused lawyers and consumers to believe that his client is barred from doing business here.
While the Wake County Superior Court has issued an injunction against Swift Rock, Carlton said the order has no effect on the World Law entities he represents because they are not actually parties to the Swift Rock litigation.
The bar issued a cease-and-desist letter to the World Law Group in May 2012, but it has not asked the court to determine whether the business is, in fact, engaged in the unauthorized practice of law. Until the court steps in and enforces the bar’s letter, World Law will continue operating in North Carolina, according to Carlton.
In its suit, World Law South says the bar overstepped its bounds by waging a “national campaign of intentionally publishing and uttering wrongful and incorrect statements about the status of [World Law’s] bona fide and legally compliant business plan, model and operations in North Carolina.”
A relatively new and privately held company, World Law South sells online legal documents and also offers consumer debt settlement services under the Federal Arbitration Act, neither of which constitutes the practice of law, according to its complaint.
The business describes itself in its suit as an “affiliated entity” of the World Law Group, which is a consortium of 50 international law firms with an online legal services division called World Law Direct. The services offered by World Law Direct are identical to those offered by World Law South, which also has a presence in Florida, South Carolina and Virginia.
The bar had not answered World Law South’s complaint and the agency’s executive director, L. Thomas Lunsford II, declined an interview request through bar counsel Katherine E. Jean, who wrote in an email that the rules of professional conduct prevented him from discussing active litigation.
Meanwhile, World Law South has asked that its case be designated to the state’s Business Court, where the LegalZoom and Lienguard suits are unfolding. Carlton, who appears to have carved out a niche, also represents LegalZoom and Lienguard.
In the LegalZoom matter, both sides are awaiting a much-anticipated ruling from Judge James L. Gale on a year and a half’s worth of motions seeking determinations on the scope of the bar’s authority, whether LegalZoom is engaged in the unauthorized practice of law and whether the business is entitled to a jury trial on that issue.
Follow Phillip Bantz on Twitter @NCLWBantz
