How to Start a Law Firm

Rene FloresDecember 23, 2020

Reviewed By: Amplify

If you’re a lawyer, you’ve probably toyed with the idea of starting your own practice over the years. But do you have any idea how to start a law firm? 

Law schools often lack courses to develop the entrepreneurial business skills needed for starting a law firm on your own. Read on to learn more about how to make your legal skills work for you as a small business owner.

Determine Your Business Structure

When you start a firm, you must decide how you want to structure your business. In this section, we’ll run down some of the options available to you and your new business venture.

Sole proprietorship

In a sole proprietorship, the business is owned and controlled by one person. That owner is liable for any debts incurred, and the business income is reported on the sole proprietor’s personal income tax return. With this structure, you need to obtain licenses and permits, but you don’t have to file any forms with the states.

With a sole proprietorship, you benefit from lower costs and have more control over your financial future. However, the disadvantages are that you have increased liability, and you’ll be responsible if the business is sued for any reason.


In a partnership, two or more people own and run the business. It is typically governed by an agreement that details the obligations and responsibilities of the partners. Depending on your state, you may also be able to form a limited liability partnership (LLP). 

With an LLP, partners have protection from personal liability for certain acts from the other partners. A partnership tends to have low formation costs; employees are incentivized to perform well with the hope of becoming a partner themselves.

Obviously, with a partnership, there is the risk of disputes between partners over business decisions. 

Limited liability corporation (LLC)

In an LLC, members are protected from personal liability for the acts and debts of the company. With this structure, members must file organization papers with the state. There must be an operating agreement that dictates the LLC members’ rights and responsibilities and determines how the business will be run.

LLCs come with less liability, but there is also the risk of dissolution if a member leaves or dies.


A corporation is a unique entity with limited liability. It has a perpetual existence and is owned by shareholders. As with an LLC, you must file paperwork with the state, and you must prepare bylaws to dictate the corporation’s operations. 

Corporations are taxed when the corporation brings in profits. The dividends that are distributed to the shareholders are also taxed.


Once you decide the type of entity you want to create, you can get down to the business of, well, business. Here are a few things to keep in mind as you move from concept to concrete.

Develop a business plan

You should develop a business plan that details your law firm’s focus, goals, and objectives. The plan should also include a mission statement, financials, and marketing strategy.

Choose a practice area

Choosing an area of law to practice is probably one of the most important decisions you’ll make in starting your own law firm. When selecting your legal specialization area, consider both your skillset and the market you will be entering. 

Important factors can include your professional experience, educational background, and the demand for your category of legal advice.

Register your own entity

As a reminder, if you’re starting a law firm as a solopreneur, you can form sole practitioner, professional corporation, and single-member LLC entities. If you’re starting a multi-member firm, you can choose between a professional corporation, a partnership, an LLC, and an LLP.

Establish systems and procedures

To optimize your work, you must develop documented systems and procedures. This allows you to create a better client experience, easily delegate work, reduce errors, and manage your team effectively.

Documented procedures should include both administrative and client service workflows that are regularly reviewed and improved upon.


As you plan, be sure to consider the various costs associated with opening your firm.

Start-up costs

First, you should have enough money saved to cover your personal expenses for the first 3-6 months as you build up clients and revenue.

You should also be prepared for the typical array of start-up costs, ranging from $5,000 to $15,000. These costs depend on variables such as practice area, location, marketing, and more.

Office spaces and office supplies

Shop around and find an office space that feels right to you. The location you choose will play a big role in your firm’s success. Be sure to choose a location where there is a demand for your legal practice and potential for growth. 

It can be hard to put money towards a lease as you’re getting started. It’s becoming common for lawyers to begin their practice virtually. This keeps overhead low and gives you time to decipher how much space you’ll really need before you’re locked into a lease.

If you do choose to move into a physical space, be sure it is equipped with all the supplies needed for your staff. The most crucial supplies include computers, back-up drives, document scanners, printers, and phones. 

Professional expenses

Set aside a budget for professional expenses, including licensing, continued education, memberships, conferences and events, and insurance. 

Marketing costs

You must invest some money in marketing your law firm. Your marketing plan can be just as important to your success as the services you offer. Be sure to build your online presence as early as possible. This includes a website that lists your services as well as contact information to make it super easy for potential clients to reach out. 

Consider purchasing advertisements, following SEO best practices to rank high in search results, and utilizing email marketing. You should also purchase business cards that you can take with you when you attend events.


Knowing the law makes you a successful lawyer. But running a successful business is about more than just the skills you offer your clients. To succeed in a competitive market, you will need to expand your skillset and think like an entrepreneur. Hopefully, this article pointed you in the right direction.

Thinking About Starting a Small Business?

Let our Commercial Lending team help you build your business plan.

Rene Flores

When it comes to commercial lending, nothing beats first-hand knowledge of the local market. It is important to craft a business plan that allows business owners to succeed and scale, and that kind of long-term thinking only comes with years of market knowledge. With almost a decade of work in the Central Texas market, I am able to provide my clients with direct insights into the markets they hope to capture.

As a member of the Round Rock City Council, I am afforded a unique viewpoint on how local businesses impact our communities. I work closely with each client to ensure the successful launch of their business – including helping them navigate the underwriting process – but my real values lies in future-focused strategic planning. Thanks to the community of Round Rock, I am able to see the demands a community places upon businesses as they scale. As a result, I work to put my clients in the best possible situation to succeed both now and in the future.

In my free time, my family and I donate our time to assist local non-profits such as the Round Rock Rotary Club and the El Amistad Club. My role as both an elected official and a commercial loan officer has shown me the importance of building sustainable communities, and I’m grateful for the opportunities to impact the long-term health of Round Rock, Texas.