You can’t just launch a new business and start offering your services if you want to have your own law firm. Aside from the fun parts, like coming up with a name for your firm and designing a logo, you will also have to do some administrative work to make your law firm official.
This is a big step toward being able to say that you run your own legal firm. Follow the guidelines on this helpful cheat sheet to get off to a good start. While the example is a divorce lawyer starting a family law firm, this applies to most law practices.
Start with the Name
- Do not use “and Associates” if you’re a solo attorney.
- If you own your business solely, do not use “Partners” or “Group.”
- Avoid using the names of famous lawyers who are not working with your firm.
- If you do not operate a public legal assistance agency, do not use state or county names.
- Do not use generic names that will be a turn-off.
Design a Logo
Your logo would be a big part of your business promotion and how you choose to graphically communicate the essence of your legal practice. It is the primary symbol and most noticeable graphic element on your webpage, business cards, official communication, and other promotional materials.
Despite the absence of strict federal rules regarding the design of logos for legal firms, there are some basic elements to think about.
- Will you be trademarking your logo?
- What color schemes would you like your law firm to be known for?
When designing the logo, keep in mind that the typeface you pick will be used on all web and mobile applications for your business. You might want to hire a professional to make a corporate identity from scratch, or you may wish to buy a blueprint from a stock photo site.
FF: The Four Frameworks
Divorce lawyers who want to start their own law firms can choose from four main relevant legislations. These frameworks establish the way you will be required to pay taxes and what your share of responsibilities will be.
- Sole Proprietorship: If you are a solo entrepreneur, this is the easiest option, but you will be responsible for all of your business’s commitments, debts, and obligations.
- Corporate Entity: Both sole proprietors and partners who want to start a law firm can use this framework to incorporate their law firm. A corporate entity is a distinct legal entity with liability protection and stockholders who own stocks or shares in the business.
- Partnership: The most common way for multiple solicitors to initiate a legal firm together is as a partnership. The costs incurred in starting a collaboration are comparatively low and easier to bear. Both sides get the same amount of money and are equally responsible for what the other does.
- Liability Limited Company (LLC): This framework is comparable to a corporate entity in that members are not personally responsible for the company’s actions or debts. But when it pertains to taxes, representatives are treated differently. Members also have the option of being taxed as a partnership.
Get Your Bank Accounts
Most new family law businesses will need at least three unique business bank balances: a checking account, a joint or singular savings account, and an “Interest on Lawyer Trust Accounts” (IOLTA). It is best to keep all of these accounts at the same bank so you can keep a record of your financial resources easily.
An IOLTA is a kind of deposit account where any interest income on the cash balance is accumulated and sent to the state bar. Lawyers often cannot earn interest on their customers’ money that is held in a trust for them.
No one insurance plan works for all law firms. Each company has different needs based on its clientele, staff, areas of profession, and other factors.
- Liability Coverage Insurance and Income Protection: This type of coverage will safeguard you from many of the different kinds of lawsuits that exist. It covers damage to property or individual and marketing losses caused at your facility through ongoing business activities.
- Professional Liability Insurance: This represents the most vital form of coverage for any law firm. It is also called “legal malpractice insurance”. This covers lawsuits that can happen if the law is misunderstood, if bad advice is given, if deadlines (statutes) are missed, if there is a conflict of interests, or if a client is unhappy and wants to sue the practice.
- Cyber Liability Insurance: Because lawyers deal with confidential material about their clients, they are often a target of cybercrimes. This type of coverage covers cybercrimes, like when a scammer attempts to trick a prosecutor into sending money to a fake account, or when a hacker takes over an attorney’s email and tells clients to send money somewhere illegitimate.
Some Final Housekeeping
The last step to make it official is to get the licenses and other paperwork you need to start your business legally. A business license lets people know what your business is, assists you in keeping records of your financial affairs for tax reasons, and lets you run your business legitimately.
In some places, you may also need a state taxpayer identification number, a business name certification, and land use plan approval. These can vary from state to state, city to city, and district to district, so make sure you check the rules in your own area.
Ready to Start Your Practice?
This might sound like a lot. Take a deep breath and start giving yourself a few weeks to figure out your plan. Rather than trying to rush through every section, break it up into smaller tasks that are easier to handle. Knowledge is key here. If you use this cheat sheet as a starting place, it will help you get the documentation and licenses you need to start your law firm in no time.
Maxwell Hills is the founder of Hills Law Group, a premier Orange County divorce lawyer law firm with a concentration on high net worth divorces. Max’s entrepreneurial career stretches back to his teenage days when he had his music used in Grey’s Anatomy and ESPN. Today, Max has used that experience to build Hills Law Group with 0 customers and $0 in revenue to a respected firm in the industry.