LLC vs PLLC for Solo Attorney Practices: Which Is Right?
Compare LLC vs PLLC for solo attorneys: liability, ownership, costs, and state rules. Practical guidance to choose the right structure.
Choosing between an LLC and a PLLC is one of the first major business decisions you’ll make as a solo attorney. The short answer: if your state offers a PLLC, you’ll likely need it to practice law, but an LLC may work if your state allows it. This guide breaks down the differences, costs, and steps to decide.
What Is an LLC and a PLLC?
An LLC (Limited Liability Company) is a flexible business structure that shields personal assets from business debts and lawsuits. A PLLC (Professional Limited Liability Company) is a specialized LLC for licensed professionals, such as attorneys, doctors, and accountants. The key difference: PLLC owners must all be licensed in the same profession, and the entity itself is subject to state professional regulations.
For solo attorneys, the choice often comes down to state law. Some states require attorneys to use a PLLC (or PC, Professional Corporation), while others allow a standard LLC. A few states, like California, do not recognize PLLCs for attorneys; you must use a PC. Check your state bar’s rules before deciding.
Key Differences: Liability, Ownership, and Taxes
Liability Protection
Both LLCs and PLLCs provide limited liability, meaning your personal assets (home, savings) are generally protected from business debts and malpractice claims beyond your insurance coverage. However, malpractice protection is not absolute: you remain personally liable for your own negligence, so professional liability insurance is essential.
Ownership Restrictions
- LLC: Owners (members) can be individuals, other LLCs, corporations, or foreign entities. No licensing requirement.
- PLLC: All members must be licensed professionals in the same field. For attorneys, this means every owner must be a licensed lawyer in the state. This prevents non-lawyers from owning shares or influencing legal decisions.
Taxation
Both LLCs and PLLCs are pass-through entities by default. Profits and losses flow to your personal tax return, avoiding double taxation. You can elect S-corp status for either, which may save on self-employment taxes if you take a reasonable salary and distributions. Consult a CPA to model your specific situation.
State-by-State Variations
State laws vary significantly. Here’s a snapshot:
| State | Allowed for Attorneys? | Notes |
|---|---|---|
| California | No PLLC | Must use PC (Professional Corporation) |
| New York | Yes, PLLC | Required for law practices |
| Texas | Yes, PLLC | Allowed, but LLC also permitted |
| Florida | Yes, PLLC | Required for law practices |
| Illinois | Yes, PLLC | Allowed, but LLC also permitted |
| Delaware | Yes, PLLC | Allowed, but LLC also permitted |
Check your state bar’s website or consult a business attorney to confirm requirements. Some states allow LLCs but impose additional rules, such as naming requirements or mandatory malpractice insurance.
Cost Comparison: Formation and Ongoing Fees
Costs vary by state and service. Here are typical ranges for 2026:
| Cost Item | LLC | PLLC |
|---|---|---|
| State filing fee | $50-$200 | $50-$300 (some states higher) |
| Registered agent fee (annual) | $50-$150 | $50-$150 |
| Annual report fee | $0-$100 | $0-$200 |
| Formation service (optional) | $50-$200 | $50-$250 |
| Total first-year cost | $100-$450 | $100-$500 |
Ongoing annual costs are similar, but PLLCs may have additional compliance requirements, such as renewing professional licenses or filing extra documents.
Pros and Cons for Solo Attorneys
LLC Pros
- More flexible ownership (if allowed by state)
- Simpler formation and compliance in some states
- Familiar structure for banks and clients
LLC Cons
- May not be permitted for law practices in your state
- If allowed, some clients may question your professional status
- Potential conflict with state bar rules if not structured correctly
PLLC Pros
- Clearly signals professional status to clients and courts
- Meets state bar requirements in most states
- Limits liability while complying with professional regulations
PLLC Cons
- Ownership restricted to licensed attorneys (fine for solo, but limits future partners)
- May have stricter naming and compliance rules
- Some states have higher filing fees
Steps to Choose and Form Your Structure
- Check state bar rules: Visit your state bar’s website or call their ethics hotline. Confirm whether PLLC is required, allowed, or prohibited for attorneys.
- Consult a business attorney or CPA: Get advice on liability, taxes, and compliance. This is a one-time cost of $200-$500, but it can save you from costly mistakes.
- Decide on LLC vs PLLC: Based on state law and your long-term plans. If you might add non-lawyer partners later, an LLC (if allowed) offers flexibility, but PLLC is safer for compliance.
- File formation documents: Prepare Articles of Organization (for LLC) or Articles of Organization for Professional Limited Liability Company (for PLLC). You can file directly with the Secretary of State or use a service.
- Obtain an EIN: Register with the IRS for an Employer Identification Number. This is free and takes about 10 minutes online.
- Open a business bank account: Use your EIN and formation documents to open a separate account. This is critical for liability protection.
- Get malpractice insurance: Even with a PLLC, you need professional liability coverage. Typical premiums for solo attorneys range from $1,500 to $5,000 per year, depending on practice area and location.
- Maintain compliance: File annual reports, pay fees, and keep business records separate from personal finances.
FAQ
Can I convert an LLC to a PLLC later? Yes, in most states you can convert by filing a conversion document and meeting professional requirements. Costs range from $100 to $300. However, if your state requires PLLC, you should start with one to avoid rework.
Do I need a PLLC if I’m a solo attorney? It depends on your state. Many states require PLLC for law practices, but some allow LLC. Check your state bar’s rules. If PLLC is required, you must use it to practice legally.
Does a PLLC protect me from malpractice claims? No. A PLLC limits liability for business debts and some lawsuits, but you remain personally liable for your own negligence. Malpractice insurance is essential.
What’s the difference between a PLLC and a PC? A PC (Professional Corporation) is a corporation for professionals, offering similar liability protection but with more formalities (board meetings, stock). PLLC is a limited liability company, which is more flexible. Some states only allow PCs for attorneys.
The Bottom Line
For solo attorneys, the decision between LLC and PLLC is driven by state law. If your state requires PLLC, that’s your answer. If both are allowed, weigh the flexibility of an LLC against the professional clarity of a PLLC. In most cases, the PLLC is the safer choice for legal compliance. Take action this week: check your state bar’s rules, consult a business attorney, and file the appropriate formation documents. The cost is modest, and the protection is worth it.