How to Start Your Own Law Firm

Content provided by legal writers

After spending a few years in the field and acquiring enough experience, you feel ready to start your law firm. Deciding to open your law firm may be the first step, but it’s also one of the most important. This process is very similar to starting your own business. However, you might not know how to go about things or what you have to sort out to get everything up and running. In this article, we’ll be going over everything you need to start your law firm. 

The Appropriate Amount of Finances 

It should go without saying that you will need the correct number of finances to open your law firm. Funny enough, however, you’d think it’d be costly. But if you’re looking to start small, some lawyers have seen success by only investing as much as $3,000 for everything. However, many lawyers who have started their practice suggest that your best is to invest at least $15,000. This may seem like a lot of money, but that doesn’t mean you have to finance it yourself. Instead, you can look into taking out personal loans. You can use personal loans for pretty much anything you can think of, so they’re a fantastic option for getting the supplies you need for opening your new venture. 

But keep in mind that there are other factors involved when it comes to taking out loans. For one thing, your credit score needs to be in a good position. The recommended score to be considered eligible is at least 610 to 650. Granted, the requirements do vary from lender to lender. For example, some might require you to have a score of 550 to help those with lower-than-average credit. But regardless, you’ll also need to have a crystal-clear credit report. 

In some cases, there might be a discrepancy or two that can lower your chances of being approved. You can get a free copy of your credit report from Experian and Equifax. Take your time going over your entire report to ensure nothing is wrong. If you notice anything that shouldn’t be there, call your credit company and look to have it expunged. 

Choose a Business Structure 

After getting your finances in order, your next step is to determine your law firm’s business structure. A business structure determines who owns and how it handles taxes and legal operations. There are four types of business structures, including: 

  • Limited liability company (LLC) 
  • Corporation 
  • Partnership 
  • Sole proprietorship 

What you want to make your firm is ultimately up to you. However, it’s highly recommended that you choose to be an LLC as this is your first time opening a law firm. LLCs are a type of company that protect you and your assets from any legal claims and issues. After having to handle law school stress, you deserve some peace of mind. As for taxes, LLCs are treated as a type of corporation where it’s treated as a separate entity. Therefore, you’ll have to fill out an 8832 form with the IRS for taxes. Sole proprietorships are usually for those who have prior experience running a firm in the past. The person who owns this type of company is responsible for everything, including the taxes and legal issues. 

Invest in a High-Quality Computer 

Perhaps the most essential item in a lawyer’s toolbox is their computer. Your computer is what houses all of your essential data, tax forms, client data, and contract templates. As you’re probably already aware, you’ll be storing many documents on this computer. So, you’re going to need a laptop with a fast processor and adequate storage. Most computers these days come with a built-in SSD, which functions as an external hard drive. It helps prevent the computer from becoming clogged and slower. The price of the computer varies on the vendor. However, as a lawyer, you can expect to be investing about $1,500 into this. Fortunately, you can use the aforementioned personal loan to help pay for it. 

Online or Office Space 

With how modern technology has evolved, it’s possible to begin your law firm remotely. And to be honest, it’s easier to manage than opening an office for it. But at the end of the day, the choice is up to you. If you want less hassle setting things up, the remote is the best option. Or, if you’re going to do things the old-fashioned way, there’s nothing wrong with setting up an office somewhere. Make sure to weigh the pros and cons first to get an idea of the better option.  

This content is provided by an independent source for informational purposes only and does not contain legal advice. Consult an attorney or financial advisor when making decisions. This information is provided by legal writers and does not reflect the views or opinions of The Daily Sundial editorial staff.