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We the Pauper-Legal-forms franchiser bankrupt—will online services follow?

Wednesday, April 28, 2010

As competitors vie to be contenders in low-cost legal services, the business-model pioneer, We the People Inc., is on the ropes. A national franchiser that once had 1,000 offices in 30 states, the company has gone into bankruptcy.

In a Feb. 18 filing before the Delaware bankruptcy court it was revealed that We the People suffered a 2009 loss of nearly $2.5 million on revenue of about $1.4 million. By the end of the year, the firm was down to about $13,000 in monthly operating expenses. Yann Geron, a partner at Fox Rothschild in New York City who represents the unsecured creditors committee, says the remaining We the People stores are open. The franchise’s website lists eight offices operating in four states.

The Chapter 11 fate of We the People is ironic. The company was born in the wake of the 1989 bankruptcy of Ira and Linda Distenfield, who found ed We the People as a way to help consumers with common legal problems by offering them legal documents. From the mid-1990s, the Distenfields were the darlings of the do-it-yourself movement, but in 2005 We the People was sold to Pennsylvania-based Dollar Financial Group Inc. and never recovered its star.

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