You Are Being Sold

How online document preparation companies make money off your privileged information

Online Will preparation, LLC/Corporation formation, and other online legal services are tempting but should be avoided. Have you ever considered online legal services? What are the benefits and drawbacks? I often hear people say it is more cost effective; however, most people don't realize that these online services are gathering your information and selling it for profit to marketers and advertising companies. Also, these "services" are providing customers a product which has a long term cost that far outweighs the short term savings.

First, online legal services typically use employees who are not licensed to practice law, let alone licensed to practice law in Texas. Instead, they employ software (often not even a real person) to quickly generate cookie cutter legal forms, or some will use employees from other countries to assist in processing the form or taking a phone call. Often, these online companies will advertise that their forms are "attorney prepared." But, in reality, some attorney in California provided an underlying form, and the blanks were filled in by you. Most documents are either computer generated or filled-in by a clerical employee. They successfully avoid the unlicensed practice of law with disclaimers like: "You should consult an attorney in your state for serious legal matters." Or, "We are not a substitute for the advice of an attorney".

Second, communication with online document preparation services is not legally privileged or confidential. The document service provider may sell your information for marketing or other purposes. By way of example, there is one website which states it "is not a law firm and is not a substitute for an attorney or law firm. Communications ... are not protected by the attorney-client privilege or work product doctrine".

A different form website pretends to protect your privacy with this tricky policy: "We may collect and/or track ... information knowingly provided by you through on-line forms... We may also use your personal, demographic and profile data ... for marketing and promotional purposes.... We reserve the right to share, rent, sell, or otherwise disclose data we collect to third parties".

Do you know what this means in a nutshell? YOU are the product. They entice you with a perceived lower price for a legal document, then gather your private information and sell it for profit. YOU are their product, not the legal document they are selling.

In stark contrast, a licensed Texas attorney must comply with Texas State Bar's rules of professional conduct. These strict rules require an attorney to maintain confidentiality and any and all communications are protected by the attorney-client privilege. Do you want a marketing company knowing the identity of your heirs and beneficiaries? Do you want a large sales and advertising company to know who the managers are in your LLC? Use online services and that is exactly what will happen.

Third, online Will legal services provide a false sense of security. It may appear that they provided good legal documents, but they may be using forms that have never been tested before a court. One form website is registered as a "legal document assistant" in Los Angeles, California but provides preparation of legal documents which they claim to be valid under Texas law.

Another company omits legal provisions which are critically important under Texas law.

The form websites often provide cookie-cutter mass produced forms that meet only the bare statutory requirements when the statutory forms themselves often fall short of providing effective legal solutions. You are effectively throwing your money away if you rely on an online Will preparation service.

You'd be surprised how small the price difference is between a real Texas attorney and a foreign online document preparation company. Call us if you need help. If we can't help, we will find someone who will.

Payne & Truitt — The Name You Trust