California Bar, LegalMatch Settle Lawsuit Over Legal Advice (1)

LegalMatch.com and the California Bar reached an agreement to end their years-long battle over who can provide legal advice in the state, according to a Monday filing in San Francisco Superior Court.

Judge Ethan Schulman in a one-page order vacated a hearing scheduled for Tuesday in the lawsuit the state bar filed against the legal referral service in 2020.

The settlement comes as the California Legislature cleared the annual fee bill (AB 2958) that would restrict the bar from advancing any initiative to increase scope of practice for paralegals or explore corporate ownership of law firms.

“The Office of General Counsel is still working out the settlement agreement with the affected parties,” the bar said in an emailed statement. “Ultimately, the successful resolution of this matter speaks to the scope of the State Bar’s multifaceted work to protect the public. In this case, that we can and will actively regulate lawyer referral services and seek civil penalties against unlicensed LRS wherever we find them.”

Representatives for LegalMatch.com didn’t immediately respond to an email seeking comment. The parties in a May case management statement said they continued to meet in mediated sessions.

LegalMatch was certified as a lawyer referral service effective Sept. 11, 2020, which effectively mooted the State Bar’s claim for injunctive relief, court documents said. The only remaining issues in this case are imposition of an appropriate civil penalty and reimbursement of the State Bar’s reasonable expenses.

The heavily litigated case with amended complaints and LegalMatch’s three cross complaints follows the California Court of Appeal holding that LegalMatch operates as an unlicensed lawyer referral service in violation of the California Business & Professions Code Section 6155(a). The appellate ruling arose in a lawsuit LegalMatch filed against an individual for allegedly failing to pay service subscription fees.

Bars around the country are struggling to increase access to lawyers and regulate legal practice while embracing technological innovation.

The case is State Bar of Calif. v. LegalMatch.com, Cal. Super. Ct., No. GCG-20-584278, hearing vacated 8/22/22.

https://news.bloomberglaw.com/legal-ethics/california-state-bar-legalmatch-settle-case-over-legal-advice