Maybe you have a legal background. Naturally, you are interested in a business you can start that revolves around something legal. There are not a lot of legal services franchises, sad to say. Let’s talk about one now, We the People.

From a Ryan Knoll blog posting that I read recently (although it was written in 2005):

We the People is a paralegal document preparation service.  People typically use their service for simple legal documents and court filings (name change, non-contested divorce, wills, incorporation).  The company provides customers with forms to fill out with a pen, and the franchisee then sends the form off to a processing center located in the state.  One to seven days later (14 days max), the forms are sent back to the franchisee to give to the customer.  The franchisee may also offer to file the forms with the appropriate court for an additional fee.  The processing center takes a 25% cut of the document charge.  

The author of that blog post actually visited a We the People store:

There was one man on the phone trying to explain three different types of divorces.   I was promptly greeted by the other employee asking me which form I wanted to fill out.  I said incorporation and will, and she lept into her sales pitch with a brochure, eager to hand me a paper form to fill out.

If you are a franchisee of We the People, you are entering into the legal services franchise market. There are not many legal services franchises around. If you have legal experience, if you are a lawyer or paralegal, you might be tempted to become a We the People franchisee. But I don’t think the author would be tempted!

There are numerous issues with a franchise like this. To me, the biggest issue is that the concept is not proven. Not only not proven, but to me, not sound.

If I need legal help, am I going to go to some storefront, or am I going to consult a lawyer? Duhhh. Why would you go to a place that can’t practice law, if you need legal work done? A better concept would be a low priced legal service that is staffed by lawyers. But this isn’t it.

As the author of this article wrote:

Let’s make this simple.  If the business is open 300 days per year, and sales total $1,600 per day (that’s about 8 $200 sales each day, which to me seems very high), that will generate $320,000 in sales, minus 43% is fees is $137,600 to pay all rent, salaries, other operating expenses, and still earn a return on your $150,000 investment.  No thanks!

The point is that you are moving into what is not a proven concept. Fees and costs may seem rather high. We the People has had a history of litigation. Do a Google search and you will learn of a mountain of litigation. Not a pretty picture.

In 2004, there were  ftc charges. Let me quote here from the FTC website:

A company that sells legal document preparation franchises has agreed to pay a $286,000 civil penalty to settle Federal Trade Commission charges that it violated federal law by failing to disclose lawsuits against it to prospective franchisees. The FTC alleges that We The People Forms and Service Centers USA, Inc., (We The People), which assists consumers in preparing legal documents, including bankruptcy petitions, violated the FTC’s Franchise Rule. In addition to paying a civil penalty, the defendant agrees to receive training to assist it in complying with the Franchise Rule.

Hey, this isn’t rocket science. We the People didn’t disclose lawsuits against it – and that is a big no-no.

All of this raises a lot of red flags for me. I am very interested in helping people with a good legal services franchise, such as my client may offer sometime soon. To me, that is a franchise opportunity that requires fairly low capital, no costly build-outs, and that can be run from home.

I would suggest that if you are interested in a legal services franchise, you get on our special announcement email list to learn more.