Challenges Beset Low-Cost Paralegal Aid

You can't miss the red, white and blue at the We the People office in Glen Burnie -- the flags, the star wallpaper, even a large Liberty Bell rug. "It's nothing you'll find on Madison Avenue," said Deborah Ramsey, owner of the Glen Burnie franchise.

That's precisely the point. The decor is part of the paralegal company's strategy to distinguish itself from high-priced law firms. As its Web site states: "You pay for the forms and documents, not the expensive law school and wood-paneled offices." Wills here cost $99; bankruptcies, $199; uncontested divorces, $349.

The company's do-it-yourself approach to the law attracted 123,000 customers last year to its 123 franchised offices. This year, with nearly 200 offices expected to be up and running, 200,000 customers are expected to pay nearly $50 million to get help with their legal documents.

For people who can't afford lawyers or simply distrust them, the 11-year-old We the People may be an attractive alternative, one that stems from the self-help legal movement started some 30 years ago.

However, as We the People has grown to become one of the nation's largest paralegal firms, its bare-bones way of dealing with living trusts, uncontested divorces and bankruptcy is drawing a number of legal challenges from law enforcement agencies.

In recent years, the Justice Department's U.S. Trustees office, which oversees the nation's bankruptcy system, has brought approximately 10 enforcement actions against We the People, saying that in some cases it engaged in unfair and deceptive practices that often put customers' assets at risk.

The U.S. Trustee's office in Brooklyn has filed three cases against We the People in the past four months, including one on Thursday, alleging the Forest Hills franchise gave a debtor inaccurate information and prepared incomplete forms that put his Queens co-op apartment at risk. The U.S. Trustee for Brooklyn, Deirdre A. Martini, is seeking a $500 fine and a refund for the customer. In an April enforcement action, Martini said an employee signed a customer's signature several times on her bankruptcy documents. Two months before that, Martini sought an injunction to block many of the company's business practices, including using the word "legal" in its advertisements. Citing four debtors who allegedly received erroneous information that put their property at risk -- three almost lost their homes, another her car -- the complaint said the company gave advice "often detrimental to the debtor." That case is still pending.

We the People's general counsel, Jason Searns, said the company fired the employee who signed the customer's signature, "a stupid, if kind-hearted decision" to speed up the process. That same employee was named in Thursday's action. Searns said the company denies all allegations about providing erroneous and inaccurate information, calling the charges a concerted campaign by lawyers who see their business threatened by the low-cost legal document preparation service. The company is not infallible, Searns said, but the mistakes it makes are small, no more numerous than those made by lawyers.

We the People is pressing for state and/or federal regulation that would allow its industry to operate without constant challenges, along the lines of rules recently passed in Arizona. "Because we have a new industry with all kinds of concerns, we want to know what the ground rules are," Searns said.