Starting Your Own Law Firm: How to Make it Official

Selecting a name for your law firm

The name of your law firm gives your potential clients, partners, and colleagues the first impression of your business, but you might be surprised to know that there’s more to naming a law firm than brainstorming and narrowing down your favourite options.

Here are some steps and considerations to help you come up with the perfect name:

• Australian Solicitors Conduct Rules (ASCR): Ensure the name complies with these rules, particularly Rule 36, which prohibits misleading or deceptive firm names.
• Register with ASIC: If you plan to trade under a business name different from your personal name, it must be registered with the Australian Securities and Investments Commission (ASIC).
• Professional Titles: Avoid terms like “partner” or “associates” if they don’t accurately describe your firm’s structure.

Designing a logo for your law firm

When considering how to start a law firm, it’s important to have a vision of your brand from the start. Your logo is a key part of your brand and how you decide to express your law firm visually. It’s the main symbol and most visible graphical element that appears on your law firm’s website, business cards, emails, and other marketing materials.

For this reason, spending time and money on a professionally designed and well-thought-out logo is essential for any successful marketing plan. From choosing the right logo color and font to hiring the right designer, make sure your law firm’s logo is an accurate reflection of your brand—this is a process that involves thorough research, thought, and iteration.

While there are no strict federal guidelines for law firm logos, be sure to check with your state’s ethics rules and bar association guidelines before you start.

Additionally, consider whether:

• You want to trademark your logo (not required, but strongly recommended to protect your brand identity)
• What main colors you want to use to represent your law firm (and appeal to your target audience)
• If the font you’ve chosen is web-safe (so your audience views your content the way you designed it, on any device and browser)
• Whether you want to outsource a custom logo built from scratch or if you want to buy a template from a stock image site to use.

While it may seem complicated at first, designing your law firm’s logo is a very rewarding process that is pivotal to creating your brand.

Forming a legal entity

There are four main legal structures available for lawyers looking to start their own law firms:

1. Sole Practitioner: An individual lawyer operating independently. This structure is straightforward and cost-effective but entails personal liability for all business obligations and debts.
2. Partnership: Involves two or more lawyers sharing ownership and responsibilities. While partnerships are relatively simple to establish, partners are jointly liable for the firm’s obligations and each other’s actions.
3. Incorporated Legal Practice (ILP): A corporate entity that can offer legal services alongside other services. An ILP provides limited liability protection to its owners but must adhere to specific regulatory requirements.
4. Unincorporated Legal Practice (ULP): Similar to a partnership but not incorporated as a company. ULPs do not offer limited liability protection, exposing partners to personal liability for the practice’s obligations.

Getting a bank account

Most firms starting out will need three business bank accounts at minimum—checking, savings, and a separate Interest on Lawyer Trust Accounts (IOLTA). It’s wise to keep all these accounts together in the same financial institution to easily keep track of your funds.

What is an IOLTA account?

While the first two you may have already heard of and use in your day-to-day life, an IOLTA account is a type of bank account from which any interest earned on the account is collected and forwarded to the state bar (usually to funds for social justice, like legal aid). Lawyers are not allowed to collect interest on money held in trust for their clients.

IOLTA accounts are designed to keep client funds separate from your typical business or operating account—where you are allowed to accrue interest. Lawyers also can’t deposit their own funds into an IOLTA account, except to pay service charges. This is why you should use a separate checking account or designated credit card to cover fees—so there’s no risk of accidentally touching client money.

Without the right business accounts, you risk inaccurate bookkeeping, messy records, and potentially violating compliance.

Purchasing insurance

There’s no one-size-fits-all insurance plan when it comes to law firms. Each firm has its specific needs depending on their clients, employees, areas of practice, and more. 

We’ve compiled a list that should cover most of your insurance needs when you’re first starting your law firm. But depending on your practice area, it’s important to look into additional plans.

• General liability insurance & property insurance: This type of insurance will protect you from most types of lawsuits. It covers property damage or personal and advertising injury caused by your service, business operations, or yourself.
• Professional liability insurance: Also known as legal malpractice insurance, this is the most important type of insurance for any law firm. This covers suits that may arise from misinterpretation of the law, bad advice, missed deadlines (statutes), conflict of interest, or disgruntled clients looking to sue.
• Cyber liability insurance: Lawyers often deal with sensitive client information, making them a target for hackers. This type of insurance covers cybercrimes, including social engineering schemes where the hacker tries to trick a lawyer into sending funds to a fraudulent account or hijacking the email of an attorney and directing clients to send funds someplace illegitimate.

These four types of insurance are part of the basic package that every lawyer starting their own law firm should purchase.

Final thoughts on how to make it official

Starting a law firm is no easy task, and it’s perfectly normal if you’re feeling a bit overwhelmed at this point—but don’t be discouraged. With a clear vision, strategic planning, and some hard work, you can create a successful law firm.

You already have this guide as your starting point. Now, take a deep breath and give yourself a few days to map out your plan. Break each section down into more manageable tasks instead of trying to rush yourself through them.

And, remember: Knowledge is power. 

When you’re ready to learn more, diving into Clio’s Guide to Starting a Law Firm is your next step. With valuable insights and advice from legal experts and successful founding partners, this guide features resources on topics like:

• How to Create a Law Firm Business Plan
• How to Create a Law Firm Budget
• How to Create a Plan for Attracting Clients

Using these resources, you’ll soon be equipped with the information you need to officially start your law firm.