How to Start a PLLC or Law Firm: The 10 Steps That Actually Matter

Starting a law practice is 20% legal filing and 80% business setup. This is the order that works, with the things new attorneys forget.

Step 1: Licensing and registration

• Confirm your bar admission is active and in good standing (required before you hold yourself out as a firm)
• Check whether your state requires a law firm registration or annual report (most states do)
• Decide on a firm name and verify it’s available with the state AND not conflicting with an existing law firm name

Step 2: Choose your entity

For most solo attorneys: a PLLC (professional LLC) or S-Corp. The choice is mostly about taxes:

• PLLC taxed as sole proprietorship: simplest, full self-employment tax
• PLLC taxed as S-Corp: salary + distributions, saves self-employment tax above ~$60–80k net (see our solo attorney tax guide)

File the articles of organization with your state (often $50–$200), get an EIN from the IRS (free, same day online), and check for a registered agent requirement.

Step 3: Open the right bank accounts: before you earn a dollar

• Operating account for the practice
• IOLTA/trust account (separate, required by bar rules): many banks offer IOLTA accounts at no charge
• Business credit card (separate from personal)

Never run client funds through your operating account. This is the rule that ends careers when broken.

Step 4: Malpractice insurance

Most states require proof of coverage or disclosure. Beyond the requirement: one malpractice claim without coverage can end your practice. Typical solo attorney coverage:

• $100k/$300k policy: often $2,000–$4,000/year depending on practice area
• Higher-risk areas (real estate, family, criminal): higher premiums
• Some carriers offer prior acts coverage: important if you’re leaving a firm

Step 5: Trust accounting setup

Set up your IOLTA ledger before your first client retainer. You need:

• A per-client ledger system
• A reconciliation process (bank statement ↔ ledger ↔ client balances)
• Either practice management software with trust accounting (see practice management comparison) or a dedicated tool

Step 6: The business infrastructure

• Practice management software (matters, billing, calendar): see the comparison guide
• Accounting software for operating books: see legal accounting software
• Email and domain: use your firm name, set up a professional signature
• File storage: encrypted, organized by matter
• Conflict checking process before you accept any new matter

Step 7: Marketing basics (before clients ask)

• Google Business Profile (local searches: “attorney near me”)
• A website with your practice areas, contact, and a clear intake path
• A professional referral network: other attorneys, CPAs, financial planners
• Decide your intake process: phone, form, or consultation scheduling

Step 8: Get your first client intake right

The intake process sets the tone for the whole matter:

• Run the conflict check first (always)
• Written engagement agreement before substantive work
• Collect a retainer into trust if you’re billing hourly
• Document scope, fees, and expectations in writing

Step 9: Set up payroll and taxes

• If you elected S-Corp: set up payroll for your salary (or use a payroll service)
• Register for quarterly estimated taxes (April, June, September, January)
• Sign up for a Solo 401(k) or SEP IRA before year-end: it’s the biggest deduction available

Step 10: The 90-day review

After 90 days, review:

• Are you billing enough hours? (If not, is it marketing, intake, or admin?)
• Is your trust accounting reconciling cleanly every month?
• Are your expenses where you expected?
• Do you need to raise rates? (Most new solos underprice by 20–30%)

The bottom line

The order matters: licensing → entity → bank accounts → insurance → trust accounting → software → marketing → intake. Every new attorney who skips a step (usually trust accounting or payroll) pays for it later. Set the infrastructure up before you take the first client.

Last checked: August 21, 2026. Requirements vary by state: verify with your state bar.