To start a solo practitioner law firm, you need an active law license in good standing, a professional business entity registered with your state, a federal tax ID, a separate client trust account, and malpractice insurance, followed by registering the firm itself with your state bar. Budget roughly $1,500 to $5,000 for formation fees, insurance, and initial filings, with the exact figure depending on your state and practice area. The steps below are the ones that actually matter, in the order a solo should take them.
Confirm Your License Is in Order
Before you file anything with the state, make sure your bar status will survive scrutiny. You need to be admitted and in good standing with the highest court in the jurisdiction where the firm will operate. If you’re licensed in a different state, check whether you can waive in on reciprocity or motion rather than sitting for another bar exam.
Good standing is not just about dues. Falling behind on Continuing Legal Education, ignoring a disciplinary order, or letting bar dues lapse can push you to inactive or suspended status. Most states require between 12 and 24 hours of CLE per year, including an ethics component. When you form your entity and apply for malpractice insurance, you’ll be asked to produce a Certificate of Good Standing from your state’s bar or court clerk, so order one early.
One licensing detail that trips up new solos: nearly every jurisdiction requires a passing score on the Multistate Professional Responsibility Examination for admission. Only Wisconsin and Puerto Rico skip it.1National Conference of Bar Examiners. Which Jurisdictions Require the MPRE
Pick an Entity Structure
You can practice as a sole proprietor with no formal entity, but doing so leaves your personal assets exposed to every business debt and contract claim the firm takes on. Most solo attorneys form either a Professional Limited Liability Company (PLLC) or a Professional Corporation (PC). Both are built for licensed professionals, and both require every owner to hold the relevant license.
The practical difference is tax treatment. A PLLC gets pass-through taxation by default: income flows onto your personal return without entity-level tax. A Professional Corporation is taxed as a C corporation unless you elect S corporation status with the IRS, which restores pass-through treatment. Skip that election and you face double taxation, with the corporation taxed on its income and you taxed again on distributions. Either structure can elect S corp treatment to manage self-employment tax, but the PLLC gets you there with less paperwork.
Understand what the entity actually protects. Neither structure shields you from liability for your own malpractice or negligence. What they shield is your personal bank account from the firm’s ordinary business debts, like a defaulted office lease or a vendor dispute. State rules on professional entities vary, and some states only permit one of the two structures for attorneys, so read your state’s professional corporation or LLC act before you file.
Choose a Firm Name That Won’t Get You in Trouble
ABA Model Rule 7.5 bars firm names that are misleading. For a solo, the main trap is implying partners who don’t exist. “Smith & Associates” with no associates violates the rule. You can use your own surname, a trade name, or a descriptive name tied to your practice area, as long as it doesn’t suggest ties to a government agency or legal aid organization.2American Bar Association. Rule 7.5 Firm Names and Letterheads
Search your Secretary of State’s business database to confirm the name isn’t taken. If the trade name differs from your legal entity name, most states require a “doing business as” filing in addition to the entity registration. Getting this right at the start saves you from reordering cards, updating bar records, and refiling paperwork later.
File the Entity and Get an EIN
With a structure and a name picked, file Articles of Organization (for a PLLC) or Articles of Incorporation (for a PC) with your Secretary of State.3U.S. Small Business Administration. Register Your Business You’ll list the firm name, address, a registered agent, and the organizers or incorporators. Filing fees in most states run under $300, though a handful charge more.
Once the state approves the entity, apply for an Employer Identification Number from the IRS. The EIN is the tax ID you’ll use to open bank accounts, file returns, and pay any staff. The application is free and online, and the IRS issues the number immediately. Sequence matters: form the entity with the state first, or the EIN application may be delayed.4Internal Revenue Service. Get an Employer Identification Number
Depending on where you work, you may also need a local business license or a home occupation permit if the firm operates out of your residence. These typically run $50 to $300 and come from your city or county rather than the state.
Open a Client Trust Account
Client money is where solos get in the most trouble and where disciplinary authorities have the least patience. ABA Model Rule 1.15 requires every attorney to keep client funds completely separate from the firm’s operating money.5American Bar Association. Rule 1.15 Safekeeping Property Settlement proceeds, unearned retainers, and advance cost deposits go into the trust account. Earned fees go into operating. Mixing the two, even briefly, is commingling, and it is one of the most common grounds for discipline.
For funds too small or held too briefly to earn meaningful interest for an individual client, you’ll open an Interest on Lawyers’ Trust Account (IOLTA). Those pooled funds earn interest that the bank forwards to your state’s IOLTA program, which funds civil legal aid.6American Bar Association. Overview of Interest on Lawyers Trust Accounts The bank will want your EIN and entity formation documents. Most states also require you to register the account with the bar.
Set up a bookkeeping system before the first deposit lands. Rule 1.15 requires you to preserve complete trust account records for five years after each representation ends.5American Bar Association. Rule 1.15 Safekeeping Property Monthly three-way reconciliations between your trust ledger, individual client ledgers, and the bank statement are standard and expected during any audit.
Buy Malpractice Insurance
Malpractice coverage protects you when a client alleges negligent representation. Only a couple of states require every attorney to carry a policy, but a growing number require you to disclose your coverage status to the bar each year. Going bare means a single bad outcome can wipe out everything you’ve built.
Premiums depend on practice area, coverage limits, and claims history. A first-year attorney doing lower-risk work like criminal defense or family law might pay around $600 annually. Real estate, estate planning, or personal injury practice with higher limits runs $1,500 to $3,000 or more. Insurers will ask about your practice areas, projected gross revenue, and any prior claims or discipline. Rates vary enough that shopping multiple carriers is worth the time.
Consider adding cyber liability coverage. A solo practice stores sensitive client data, including financial records, Social Security numbers, and privileged communications. A breach triggers notification obligations in every state where affected clients live, and forensic investigation plus credit monitoring costs add up fast. Basic cyber coverage is inexpensive and fills a gap that malpractice insurance doesn’t touch.
Register the Firm with Your State Bar
Once the entity is formed, the trust account is open, and insurance is in place, you register the professional entity itself with your state bar. The process varies: some bars use an online member portal, others require a paper packet. Plan to submit proof of entity formation, trust account details, a Certificate of Good Standing, evidence of malpractice coverage (or a disclosure form in states that don’t mandate it), and any required compliance affidavits.
Registration fees generally run $200 to $600. Processing takes anywhere from two to six weeks depending on the bar’s workload. Once approved, you receive official authorization to practice under the firm name. Keep that authorization where you can produce it quickly, because clients, courts, and opposing counsel occasionally ask for proof.
Plan for Succession Before You Need To
Most solos skip this, and it causes the most damage when something goes wrong. If you become incapacitated or die without a plan, your clients’ cases don’t pause. Deadlines keep running, and no one has authority to touch your files, return client property, or move matters forward.
The Comment to ABA Model Rule 1.3 addresses this directly. Under the duty of diligence, a solo should designate another competent lawyer who can step in to review files, notify clients, and take protective action. Without a plan, a court may appoint someone to inventory your files under the Model Rules for Lawyer Disciplinary Enforcement, and that person won’t know your clients or your systems.7American Bar Association. Rule 1.3 Diligence – Comment
A functional plan includes a written agreement with a trusted colleague, instructions for accessing your case management software and trust accounts, a current list of active matters with upcoming deadlines, and authorization documents that let your designee act quickly. Store the plan where your successor and a family member can both find it, and update it annually. Some state bars now require solos to file a succession plan to maintain active status.
What You’ll Pay Every Year
Launching costs are the visible part. The annual carrying costs are what catch people off guard:
- State bar dues, roughly $75 to $600 depending on jurisdiction, separate from voluntary ABA membership.
- CLE: 12 to 24 hours per year in most states, with ethics credit required. Courses run from free to several hundred dollars each, plus the time you spend not billing.
- Annual or biennial reports with the Secretary of State. Fees range from $0 to several hundred dollars, with a few states layering a franchise tax on top.
- Malpractice premium renewals, which typically rise modestly each year even without claims.
- Trust account compliance: bank fees, bookkeeping software, and the time spent on monthly reconciliations.
Missing an annual report deadline can result in administrative dissolution of the entity, exposing you to personal liability and potential bar discipline. Missing CLE deadlines can suspend your license. These don’t come with gentle reminders. Calendar them like court dates.
A Note on FinCEN Reporting
If you’ve seen warnings that new LLCs and corporations must file Beneficial Ownership Information reports with the Financial Crimes Enforcement Network under the Corporate Transparency Act, those obligations no longer apply to domestic entities. As of March 2025, FinCEN revised its rules to exempt all entities formed in the United States from BOI reporting.8Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting A solo forming a domestic PLLC or Professional Corporation has no FinCEN filing to make. The requirement now applies only to foreign-formed entities registered to do business in a U.S. state.