UpCounsel, an online marketplace that connects freelance lawyers or full-time legal staff with small businesses, has announced that it is shutting down permanently on March 4. The company did not provide a reason for the decision in its announcement that was sent to its users and posted on the website on February 3.
The company was co-founded by Matt Faustman(CEO), an attorney who represented Silicon Valley startups and Mason Blake(CTO), an engineer. Mason Blake said that the decision was approved by the company’s board and shareholders, and that all user data will be deleted as part of the shutdown.
A legal dispute between UpCounsel and a dissatisfied shareholder is unveiling the reasons behind their decision. A lawsuit accused UpCounsel of neglecting ethics and competition laws due to its false and misleading advertising and unfair competition.
The news of the shutdown comes after a litigation opponent obtained the right to buy “a significant number of shares in UpCounsel” in an apparent settlement of a lawsuit’’. According to an ABA Journal, the founder of the plaintiff company in that lawsuit, LegalForce RAPC, became a “significant shareholder” in UpCounsel as part of the settlement.
Court papers further revealed that UpCounsel announced its shutdown after reaching a deal with LinkedIn. A license agreement with LinkedIn Corp required the company’s shutdown. The LinkedIn deal states that UpCounsel would “be migrating certain assets, clients, lawyers and demand over to LinkedIn.” Also, it is possible that certain employees of UpCounsel, including the founders — Faustman and Mason, will move to work at LinkedIn.
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