How to Start a Lawyer Business
Setting up a solo practice in order, from the rules to check with your state's bar to the first matter you invoice.
Opening your own practice means checking your state bar's rules, choosing a business structure, getting a tax ID and a bank account, arranging insurance and deciding how you'll record time, all before the first client signs. Billing a matter in detail is covered by the lawyer invoicing guide linked below. Here the focus is opening the practice.
On becoming a lawyer, the BLS profile of lawyers (In the US, BLS, last modified August 27, 2026) says "Lawyers typically need a law degree and a state license, which usually requires passing a bar examination." Check the admission and practice rules that apply in your state before you open.
On client funds, ABA Model Rule 1.15 (ABA Model Rules of Professional Conduct, checked October 31, 2026) says "A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property." The Model Rules are the ABA's model, so check the trust-account rules that apply in your state before you accept money in advance.
Sample figures for an opening invoice: an initial consultation at 1 × $200.00 and 2.5 hours of drafting at 2.5 × $260.00 = $650.00 come to $200.00 + $650.00 = $850.00. Use your own figures; these are only an illustration.
Step-by-step startup guide
Follow these steps to launch your lawyer business on solid footing.
- 1
Read your state bar's rules first
Look up the admission, practice and advertising rules for your state before you pick a firm name, take a client or accept a payment in advance.
- 2
Choose a structure for the practice
The SBA (In the US, SBA, checked October 31, 2026) says "Your business structure affects how much you pay in taxes, your ability to raise money, the paperwork you need to file, and your personal liability." Ask your state bar which entity types a law practice may use.
- 3
Get an EIN, then open the operating account
The SBA (In the US, SBA, checked October 31, 2026) says "You can open a business bank account once you’ve gotten your federal EIN." The IRS (In the US, IRS, last reviewed or updated October 16, 2026) says "You never have to pay a fee for an EIN."
- 4
Read the trust account rule before taking money in advance
ABA Model Rule 1.15 (ABA Model Rules of Professional Conduct, checked October 31, 2026) says "A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred." Then look up how the rule reads where you practice.
- 5
Arrange professional liability cover
For professional liability insurance, the SBA (In the US, SBA, checked October 31, 2026) says the coverage "protects against financial loss as a result of malpractice, errors, and negligence." Compare policies with a licensed agent who insures law practices.
- 6
Record time from the first matter
Log the hours and tasks for each matter as you work, so the first invoice is a copy of your time records rather than a reconstruction.
Tips for starting your lawyer business
- Keep records that tie each payment to a matter. The IRS (In the US, IRS, last reviewed or updated May 1, 2026) says "You may choose any recordkeeping system suited to your business that clearly shows your income and expenses."
- Plan for self-employment tax on the practice's profit. The IRS (In the US, IRS, last reviewed or updated October 30, 2026) says "The self-employment tax rate is 15.3%."
- Put the scope of each engagement and how you'll bill it in writing before work starts, and check your state bar's rules on fees.
- Keep each client's matters, contacts and documents together, so you can answer a billing question without searching.
How Billed helps you get started
Features to look at as you set up your business.
Hourly Rate Projects
Billed's features page lists "Hourly Rate Projects": "Manage hourly rate projects and track time for your projects. Easily bill for time tracked."
Track Time For Projects
Billed's features page lists "Track Time For Projects": "See how much time you are spending on a project with Project time tracking."
Invoice History
Billed's features page lists "Invoice History": "Billed App keeps complete history about the Invoice and its payments from the moment it is created."
Payment Reminders
Billed's features page lists "Payment Reminders": "Send payment reminders to your customers to get paid faster on your invoices. Customize payment reminders."
Frequently asked questions
More Startup Guides
Invoice Your First Matter
Create invoices, track payments and keep your clients' details in one place with Billed.
At a glance
| Stage | What to check | Source |
|---|---|---|
| Admission and practice rules | Your state bar's rules | Your state's rules |
| Client funds | "A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property." | ABA Model Rule 1.15 (ABA Model Rules of Professional Conduct, checked October 31, 2026) |
| Business bank account | "You can open a business bank account once you’ve gotten your federal EIN." | SBA (In the US, SBA, checked October 31, 2026) |
| First invoice | Hours, tasks and rates for each matter | Lawyer invoicing guide |
When this isn't for you
If you're joining a firm as an associate, or working in-house or for a government office, you can skip this setup; your employer looks after the office's accounts, cover and billing.