How to Start a Law Firm in 8 Steps

Are you considering starting a law firm instead of working at one? It takes a big leap of faith to start your own business, but it can also be very rewarding. Establishing a law firm and growing it over time presents several advantages, but it can take some time to get started and build momentum. This guide will walk you through how to start a law firm and get it to a point where you earn more with your firm than you would make working for a law firm.

Should You Start a Law Firm?

Starting a law firm is a serious decision. It will take a while to get your law firm off the ground. You will have to start from scratch to attract clients, while you can get work easily if you work at a law firm. If you start your law firm, it may take a while to match the income that you earned from working at a law firm, but once the income matches, it is easier to scale.

Business owners have to do everything and may have a rough start when they are wearing all the hats. However, the ability to delegate tasks allows you to take on more clients and increase your earning potential. Starting your own law firm also gives flexibility in your schedule and allows you to decide which cases you want to take up. Starting a law firm gives you more control than working at one.

8 Steps to Starting a Law Firm

Starting a business can feel complicated. It’s easier to receive work from an employer, but embarking on the solo business path can be more rewarding in the long run. Listed below are eight steps that will help you start a law firm and make it a success.

Create a Law Firm Business Plan

A business plan acts as your compass. It establishes your financial objectives, money management, and how you plan to stand out among other law firms. You can write your business plan on sheets of paper, in an online document, or somewhere else. These are some of the components to include:

  • Branding: Your brand is your company’s image. It affects how people see your services. Deciding the type of client you want to serve can help with your branding. If you want to serve high-end clients, you can use luxurious branding and colors, such as gold. 
  • Money: How will you spend your startup costs? Business owners should anticipate their monthly expenses.
  • Marketing: Which marketing strategies will you use to reach more people? Many law firms use advertising, PR marketing agencies, and other strategies. You should also decide which niche you want to enter.
  • Pricing: Pricing your services lower will attract more clients. This strategy can help you get initial clients, but you won’t make as much money from each client. As law firms get overwhelmed with clients, it makes sense to raise prices to reduce clients while making more money.

Choose Your Business Entity 


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The type of business entity you choose impacts your legal liabilities and advantages. Law firm owners can choose from several entities:

  • Sole Proprietorship: You are the sole owner of your business and do not have to register it with your state. You can access more tax write-offs with any business structure, but a sole proprietorship does not separate your business assets from your personal assets.
  • Partnership: You don’t have to register a general partnership with the state and get to split the work with a partner. However, you both share the profits. You can be legally liable for your partner’s mistakes through joint liability. You get help with paying for expenses, but you should also pick a good partner so your law firm doesn’t fall apart from internal conflicts.
  • Corporation: Corporations separate business assets from personal assets, which protects you personally from the corporation’s legal issues. Corporations also enjoy more tax breaks and have access to more financial products, such as business loans and business lines of credit. However, the filing fees are expensive, and you can no longer use business expenses to reduce your personal taxes.
  • S Corporation: S Corps are similar to corporations, but they are not subject to double taxation. There is more paperwork and complexities with an S Corp, and it’s more difficult to offer stocks with an S Corporation than a regular corporation. 
  • Limited Liability Company (LLC): LLCs offer legal protection of your personal assets if your business gets involved in a dispute. They are less complicated to set up than corporations but more complex than a sole proprietorship or a general partnership. LLCs are the most popular choice for small businesses because of the legal protection they provide without the complexities of corporations.

Get the Necessary Permits and Licenses

After you create a business plan and decide on your business structure, the next step is to obtain the necessary permits and licenses to run a law firm. This list covers what you will need to get started:

  • State and local business approvals
  • Certificate of Occupancy
  • Trade Name Registration
  • Federal license

Set Up Your Financial Accounts

Personal bank accounts may work for a sole proprietor, but it is better to set up business accounts for your company. Reach out to your bank and other financial institutions to learn about their business checking and savings accounts. Opening a business credit card can improve your company’s business credit score, which will help you get better business loans in the future. 

Get the Necessary Business Insurance

Business insurance policies offer financial protection in case something goes wrong. The amount of business insurance you need depends on your company. As companies get larger and employ more people, they typically need more insurance. These are some of the policies you should look into for your law firm:

  • General liability insurance
  • Commercial property insurance
  • Business income insurance
  • Cyber liability insurance
  • Tenant’s legal liability insurance

Lease Your Office Space

Most law firms buy or rent commercial office buildings to meet with clients. Renting makes more sense for law firms that are just getting started. Renting also makes it easier to walk away from commercial real estate if you want to relocate or dissolve your firm. Law firm owners should look for commercial properties in areas that align with their demographic. A law firm seeking wealthy clients should find commercial office space in an affluent area.

Buy Quality Equipment and Supplies

Law firms don’t have as many equipment and supply needs as other businesses. Buying legal pads, sticky notes, binders, file folders, and other resources will put your company in a better position to serve clients.

Launch and Market Your Law Firm

It’s finally time to get the word out about your law firm. You can attract new clients with several marketing strategies, such as:

  • Create a website
  • Create a Google Business Profile
  • Optimize your website for SEO
  • Create online content for your law firm
  • Establish social media profiles
  • Get featured in the media
  • Enter marketing collaborations with other law firms

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Get Your Law Firm Up and Running

Starting a law firm can increase your earning potential while providing flexibility and control over your schedule. The initial stages can be challenging, but once you establish your firm and let business scaling take its course, it will be worth it. Becoming a law firm owner instead of working at one can feel more exciting and help you achieve your financial goals sooner.


What qualifications and skills are required to start a law firm? 

You need experience with a branch of law to set up a law firm. You do not need any business degrees to start a law firm. Experience is the best teacher!

How much money do I need to start a law firm?

You should have at least $3,000 saved up to start a law firm. Costs vary for each law firm owner.

Should you specialize in a specific area of law when starting your firm?

Niching in a specific area of law can help you become the go-to firm for that industry. You will encourage less competition by niching down and can gradually expand your services.

Should I hire staff right away or begin solo?

You should assess your finances and your ability to manage clients. It may be a good idea to start solo and hire other lawyers as you get more clients.

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