Step 4: Sew the outside of the legs
Fold the leg pieces right sides together. Pin along the inside of the leg pieces from ankle to crotch and sew using a 3/8 inch seam allowance. Because I have boys who like to play in their lounge pants rather than lounge in them, I always reinforce the crotch seam by sewing a second seam just outside the first one. There are fancier ways to reinforce the seams but these are lounge pants, not tuxedo pants. I trim off any excess seam allowance and that seems to work just fine. I've made probably twenty pairs of these for my kids and they never complain about the seam allowance bugging them.
If your fabric is really prone to fraying, zigzag the raw edges of the legs from ankle to crotch before you pin them together. Then fold the leg piece right sides together and sew a seam up the side from ankle to crotch. Do the same for the other leg. Press the seams open.