How to Start a Law Firm Step by Step
Starting a solo law firm is not one big decision. It is about a dozen small ones that have to happen in a specific order, because each one unlocks the next: your bar registration and entity have to exist before a bank will open your IOLTA trust account, and the trust account has to exist before you can legally hold a client’s retainer. Do the steps out of order and you sit idle for two weeks waiting on paper you could have filed on day one. Here is the launch sequence a solo can actually run in 90 days.
Step 1: Lock the practice area before anything else
Every downstream step gets easier once you can finish the sentence “I am a ___ lawyer.” Your malpractice quote depends on it, your website copy depends on it, and your intake filter depends on it. “General practice” is where new solos go to starve, because you cannot market to everyone and you cannot get fast at work you rarely do. Pick one lane you can already run competently: family law, estate planning and probate, immigration, personal injury, small-business formation, or criminal defense.
The practice area also sets your billing model, which changes your cash flow more than anything else on this list. Family and estate work is usually flat fee or hourly against a retainer. Personal injury is contingency, which means no cash for months and a real need for a war chest. Decide this before you build the fee schedule, and read the full breakdown in setting prices and billing for a law firm.
Step 2: Form the entity and pull the EIN (week 1)
Most states let attorneys practice as a PLLC (professional limited liability company) or a PC (professional corporation); a bare LLC is often not permitted for law practice, so check your bar’s rule first. File the formation with your secretary of state ($50 to $500 depending on the state), then get an EIN from irs.gov the same day — it is free, takes ten minutes online, and every bank and carrier will ask for it.
Understand what the entity does and does not do. A PLLC shields you from the firm’s ordinary business debts and from a partner’s malpractice, but it does not shield you from your own malpractice. That is what the insurance is for. The full registration walkthrough, including name-approval rules that trip up new firms, is in how to set up and register a law firm.
Step 3: Open the operating account and the IOLTA (week 2)
You need two bank accounts, not one. The operating account is your firm’s money. The IOLTA (Interest on Lawyers’ Trust Accounts) holds client money — unearned retainers, settlement funds — and the interest goes to your state bar foundation, not to you. Commingling the two is the single fastest way to lose your license.
| Account | What goes in it | What it is for |
|---|---|---|
| Operating | Earned fees, your capital | Rent, payroll, software, your pay |
| IOLTA (trust) | Unearned retainers, settlement funds | Client money you have not yet earned |
Bring your entity docs, EIN, and bar number to a bank that understands trust accounting (many regional banks and Bank of America, Chase, and Wells Fargo have IOLTA products). Move money from trust to operating only as you earn it, invoice by invoice.
Step 4: Bind malpractice and set up practice-management software (week 3)
Now that you have an entity and a practice area, get malpractice quotes. Legal malpractice (lawyers professional liability) for a new solo runs roughly $1,200 to $3,000 a year for a $1M/$1M limit, higher for high-risk areas like plaintiff PI or securities. Carriers to know: ALPS, CNA, and your state bar’s endorsed program, which is often the cheapest for a first-year solo.
At the same time, set up your practice-management stack. Clio is the category standard at about $39 to $99 per user per month and does trust accounting, time tracking, billing, and a client portal in one place; MyCase and PracticePanther are lighter, cheaper alternatives. Wire in QuickBooks or Clio’s accounting, and pick a scheduling tool with a book-a-consult link. The gear list is in buying equipment and supplies for a law firm.
Step 5: Turn on intake and sign your first clients (week 4 to 6)
You are now legal to practice, so the job flips from paperwork to phone calls. Stand up a one-page website with your practice area, your city, a phone number, and a book-a-consult button — that is enough to start. Claim your Google Business Profile, ask three former colleagues to send you referrals, and put a fee agreement template in Clio so you can send an engagement letter the day someone says yes.
Speed of response is the whole game in intake. The lawyer who calls back a new lead in five minutes signs them; the one who calls back tomorrow loses them to the firm that answered. Build the funnel in how to get clients for a law firm and the launch-economics view in the best way to start a law firm.
Solo office vs shared/virtual office at launch
- A dedicated office signals permanence and gives you a private room for sensitive family or criminal consults.
- You control the space, the signage, and the client experience end to end.
- No scheduling conflicts over a shared conference room when a client walks in.
Solo office vs shared/virtual office at launch
- A dedicated lease is $1,500 to $4,000 a month before you have a single client paying it.
- A virtual office or Regus-style day suite runs $100 to $500 a month and still gives you a real address and on-demand conference rooms.
- Most solo work in year one happens over Zoom and email, so an empty office is dead overhead.
Rent the day suite until your caseload demands a permanent room. Signing a lease is the most common way a new solo burns cash before revenue arrives.
Getting found is the part that decides everything
You can execute all six steps flawlessly and still stall if nobody knows you opened. Two things are free and worth doing this week: fully build out your Google Business Profile with real photos and your practice area, and text or email every former colleague and past client a two-line note that you are taking cases. Referrals are the cheapest clients a new firm will ever get.
Then there is the part that quietly decides whether the phone rings: the website. For a law firm it is not a brochure, it is an intake machine — it has to load in under three seconds on a phone, rank for “[practice area] lawyer near me,” show your reviews and a click-to-call button above the fold, and turn a stressed searcher into a booked consult. The gap between a site that converts at 6% and a pretty one that converts at 2% is invisible until you compare the lead count, and it is the difference between a full calendar and an empty one. That is the work we do. To have the site handled instead of guessed at, get a free video walkthrough. For ads, SEO, and paid search, see our services. If you have the firm idea but not the plan and projections yet, start at expntl.com.
Frequently asked questions
How long does it really take to start a law firm?
If you run the steps in parallel, you can be legally open and signing clients in four to six weeks. The two things that stretch it are your state’s entity-name approval and how fast you name a practice area for the malpractice quote. Doing the steps one at a time, waiting for each to finish before starting the next, is what turns six weeks into three months.
Do I need malpractice insurance to start?
Only Oregon mandates it, but going bare is a bad idea and often a practical impossibility. Most bank IOLTA products, many referral sources, and nearly every landlord and client expect proof of coverage, and one uninsured claim can end your firm and your personal finances. Budget $1,200 to $3,000 a year and treat it as non-negotiable.
Can I run my law firm from home?
Yes, and most solos do at first. You need a private space for confidential calls and a real business address (a virtual office solves the address if your home is not suitable), plus a locked place to store client files. Confirm your local zoning and any bar rules on advertising a residential address before you print it on a card.
What is an IOLTA and do I have to have one?
An IOLTA is a pooled trust account that holds client money you have not yet earned, with the interest going to your state bar foundation. Yes — the moment you accept an unearned retainer or hold settlement funds, that money legally cannot sit in your operating account. Open it before you take your first dollar from a client.
How much money do I need before I open?
Plan on roughly $5,000 to $12,000 of setup cash before your first retainer clears, with malpractice, Clio, and bar and entity fees as the big three. Contingency practices like personal injury need much more, because cases can run a year with no revenue. The line-by-line is in how much you need to start a law firm.
