How to Start a Law Firm: A Practical Checklist for Solos

This is general information for a lawyer setting up a solo or small practice in the United States. Each state regulates its own lawyers, so for every step below, your state bar’s rules and practice management resources are the place to confirm the details. Tax and entity questions belong with an accountant who works with law firms.

1. Decide what the practice is

Before anything is filed or bought, write down three things: the kinds of matters you will take, the clients you want, and how they will pay. A flat-fee estate planning practice, a contingent fee injury practice and an hourly business practice need different engagement letters, different trust habits and different software. You can change course later, but these choices drive the rest of the list.

2. Confirm your license and where you can practise

Check that your license is active and in good standing, that your continuing education is current, and that you are admitted in every state where you plan to advise clients. If you will appear in federal court, check the admission requirements of each district. Your state bar can also tell you whether your firm, as distinct from you, has to register with it or with the court.

3. Choose a structure and register the business

Most states offer solos a choice between practising in their own name and forming a professional entity. The right answer depends on your state’s entity options, liability and tax, and that is a conversation for an accountant and, if needed, a lawyer who advises professional firms.

One ethics rule shapes the choice everywhere it has been adopted. ABA Model Rule 5.4 says a lawyer may not practise in a for-profit professional corporation or association if a nonlawyer owns any interest in it, serves as a director or officer, or has the right to direct the lawyer’s professional judgment. It also bars sharing legal fees with nonlawyers, with narrow exceptions, and forming a partnership with a nonlawyer that practises law. If a spouse or investor is part of the plan, read your state’s version first.

Then the ordinary business steps: register the name, get a tax identification number, and set up whatever local business licenses apply. Check your state’s rules on firm names before you print anything.

4. Get malpractice coverage

Professional liability insurance is the one cost a new solo should not skip. Coverage terms vary: claims-made policies, prior acts coverage if you practised before, limits, and deductibles. Ask your state bar whether it has any coverage or disclosure requirement, and get quotes from more than one carrier. If you are leaving a firm, ask about tail coverage for your work there.

5. Open an operating account and a trust account

You need at least two bank accounts if you will hold any client money.

Operating account. The firm’s own money: earned fees, the owner’s capital, and the account that pays rent, payroll and software.
Trust account. Money that belongs to clients and third persons. ABA Model Rule 1.15 requires it to be kept separate from your own, and requires advance fees and expenses to be deposited in trust and withdrawn only as fees are earned or expenses incurred. For small or short-term client funds this is usually an IOLTA account, whose interest goes to your state’s IOLTA program.

Tell the bank which account is the trust account and ask for it by your state’s program name. The IOLTA account guide covers what you may and may not do with it, and the three-way reconciliation guide covers the monthly check.

6. Write your engagement letter and fee terms

Under ABA Model Rule 1.5(b), you must communicate the scope of the representation and the basis or rate of your fee and expenses to each new client, preferably in writing. Contingent fee agreements must be in a writing signed by the client under Rule 1.5(c). Draft one engagement letter per fee type you will use, have it reviewed against your state’s version of the rule, and decide now how advance payments will be handled. Our engagement letter guide has a sample outline, and the guide to earned vs unearned fees covers when money can leave trust.

7. Set up conflict checks before the first consultation

A new solo carries every past client and every past consultation into the new firm. Three model rules decide what that means:

Rule 1.7 bars a representation directly adverse to a current client, or one materially limited by duties to others or your own interests, unless the conditions in 1.7(b) are met, including each affected client’s informed consent, confirmed in writing.
Rule 1.9 bars representing someone in the same or a substantially related matter against a former client without that client’s informed consent, confirmed in writing.
Rule 1.18 protects prospective clients. Even if you never take the matter, you may not use or reveal what a prospective client told you, and if you learned something that could significantly harm them, you may be barred from acting against them in the same or a related matter.

The practical result: build a list of former clients and adverse parties before you open, and record every consultation, with names, from day one. Rule 1.18(d)(2) also looks at whether the lawyer took reasonable measures to avoid hearing more than was needed to decide whether to take the matter, so keep your first intake questions short until the conflict check has cleared.

8. Design intake

Intake is how a phone call or web form becomes a client. Decide what you ask at first contact, when you run the conflict check, who sends the engagement letter, and how you say no. A written decline letter, sent when you turn a matter down, makes clear that you are not representing the person and is worth having as a template.

9. Choose software with confidentiality in mind

ABA Model Rule 1.6(c) requires reasonable efforts to prevent unauthorized access to or disclosure of information relating to a client’s representation, and the comment to Rule 1.1 says that to stay competent a lawyer should keep up with the benefits and risks of relevant technology. Both bear on what you choose.

A solo practice usually needs:

matter and contact records, with conflict search across them
a calendar that tracks deadlines and sends reminders
a trust ledger by client and matter, with reconciliation
time and expense recording
invoicing and a way to accept payment
document storage tied to matters
intake and a client portal or secure messaging

Questions worth asking any vendor: How do I export all of my data, in what formats, and can I open it without your product? Who holds the data and where? What happens if a trust disbursement would overdraw a client? What does it cost after any trial or beta, and is that in writing?

10. Decide how you will bill and collect

Pick an invoicing rhythm and keep to it. Monthly is common for hourly work. Every invoice should show what was done, and every payment from trust should be recorded against the client and matter it came from before the money moves to operating. Decide your policy on late payment and on withdrawing for non-payment, and put both in the engagement letter.

11. Put the routine in writing

Write a one-page checklist for each recurring task: opening a matter, closing a matter, the monthly trust reconciliation, backups, and checking the calendar for the week ahead. A solo has no colleague to notice a missed step, so the checklist has to do that job.

How Coil handles this

Coil covers most of the software list for a solo in one hosted product, free during the beta. Available now: intake that will not convert a lead to a client without the conflict check, a fuzzy conflict search across contacts, parties, documents and messages, calendaring with deadline chains (its court-rule sets are generic starters, not real jurisdiction rules yet), a trust ledger per client that refuses an overdraw and reconciles three ways, time and expenses, e-signature for engagement letters, documents and a client portal. Invoicing and online payments are in testing and not available today. Everything exports in formats that open without Coil. See Coil for solo attorneys.

Questions

What do I need before I take my first client?

At a minimum: an active license in good standing, a business bank account, a trust account if you will hold any client money, an engagement letter you have reviewed, a way to run and record conflict checks, and a calendar you trust for deadlines. Malpractice coverage should be in place before the first matter opens.

Do I need an IOLTA account to start a law firm?

You need a trust account if you will hold money that belongs to clients or third persons, including advance fees. Under ABA Model Rule 1.15(c), fees and expenses paid in advance go into trust and come out only as earned or incurred. Whether that account must be an IOLTA account depends on the funds and your state's program.

What business entity should a solo law firm use?

That depends on your state's options for professional entities and on tax and liability questions an accountant and your own research should answer. One rule applies across most states in some form: under ABA Model Rule 5.4, a for-profit law practice may not have a nonlawyer owner, director or officer, or a nonlawyer who directs the lawyers' professional judgment.

Why do conflict checks matter for a new solo?

You bring every former client and every prospective client with you. ABA Model Rules 1.7, 1.9 and 1.18 can prevent you from taking a matter adverse to a current client, a former client in a related matter, or someone who consulted you and shared harmful information. A record of every consultation is what lets you check.

What software does a new law firm need?

Something to manage matters and contacts, a calendar with deadline tracking, a trust ledger by client, time and expense records, billing, document storage and an intake process. Before you choose, ask how you get all of your data out, who holds it, and how the trust ledger stops you from overdrawing a client.

Sources

Last checked October 28, 2026. This is general information, not legal advice. Rules differ by state and change; check your own bar’s rules before relying on it.