'We The People' Agrees to Mediation
Over Unauthorized Practice of Law

By Tom Perrotta
New York Lawyer
New York Law Journal
May 18, 2005

We The People, a document preparation company, yesterday agreed to region-wide mediation with the Office of the U.S. Bankruptcy Trustee over accusations that it provides legal advice without a license.

Assistant U.S. Trustee Diana G. Adams told Eastern District Bankruptcy Judge Elizabeth S. Stong that the company also had agreed to a stipulation identical to the one it signed last week in the Southern District. Under the stipulation, the company promises not to engage in the unauthorized practice of law when helping clients prepare court documents, including bankruptcy filings and divorce papers.

The mediation will cover the proceedings in the Eastern and Southern districts, as well as actions in Connecticut, according to Ms. Adams and Charles F. Vihon, who represented the company via telephone.

The U.S. Trustee sought a restraining order against the document preparer after encountering errors in its work and bankruptcy applicants who claimed the company advised them on bankruptcy laws.

We The People, which moved to New York last year, has faced similar allegations in other states. It claims its services are legal and are being attacked by lawyers who are undercut by its low fees, which start at $199.

The parties have agreed to have Francis G. Conrad, a former Eastern District Bankruptcy judge, mediate the dispute. The first meeting is scheduled for June 10.

We the People Pledges to Avoid
'Unauthorized Practice of Law'

New York Lawyer
New York Law Journal
May 12, 2005

We the People, a nationwide legal document preparation service, promised yesterday in U.S. Bankruptcy Court for the Southern District of New York not to engage in the "unauthorized practice of law."

The promise was part of a stipulation sought by the U.S. Bankruptcy Trustees' Office. It could result in dramatic changes in the way the document firm does business.

We The People offers help to customers in filling out legal documents in various fields, including bankruptcy, divorce and wills. The company states on its Web site that it "serves customers who cannot afford the high cost of attorney fees" from its 170 offices in 32 states, including 34 offices in New York.

Both in New York and nationally, We The People has been accused of providing legal advice without a license. The company, which has franchises offering walk-in services, has denied it provides legal advice.

But Greg Zipes, a Department of Justice attorney who advises the bankruptcy trustees' office, said after yesterday's hearing that We The People has been "stepping over the line."

Earlier, before Bankruptcy Judge Robert Drain, Mr. Zipes said that members of the trustees' office "define legal advice very broadly."

Under the terms of the stipulation, We The People cannot advise customers on when to file for bankruptcy, explain secured versus unsecured debt, or categorize the different types of bankruptcy filings available to a debtor, among other things. Additionally, the center cannot distribute how-to books or guides on filing for bankruptcy to customers.

"They are allowed to be a typing service," Mr. Zipes said, in characterizing the stipulation's terms.

Richard Lubetzky of Los Angeles, We The People's lawyer, did not object to the characterization during the hearing, which he attended by phone.

Since its arrival in the New York area last year, We The People has opened dozens of offices and handles a large percentage of personal bankruptcy filings in the region, Mr. Zipes said.

The trustees' office took an interest when it saw mistakes in the company's work.

The case before Judge Drain involved Debbie Dallas, a customer of We The People.

Deirdre Martini, the trustee handling the matter, explained that Ms. Dallas may lose her house because of faulty advice she received from We The People. The Dallas case provided an opportunity for the trustees' office to curb We The People's practices, Ms. Martini explained.

Similar moves to place restrictions on We The People are pending in Brooklyn and Connecticut, said Ms. Martini. The trustees' office plans to enter into similar stipulations with the company in those jurisdictions and, during mediation sessions authorized by Judge Drain, reach a regional-wide resolution with the service provider.

We The People has come under fire in other jurisdictions, including, Florida and Texas, where local bar associations led the attacks.

Ms. Martini said that most attorneys in the area charge about $700 for basic bankruptcy advice compared with We The People, which charges about $200. But she added that court clerks will also help.

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