Breaking Down the Cost Needed for A Law Firm Startup

The U.S. demand for legal services continues to grow, and statistics indicate that about 165,000 firms are generating $180 billion in revenues annually. Joining the formal legal industry with your law firm startup could prove a lucrative decision.

Running a law firm doesn’t differ from maintaining any other business. You need financial knowledge and a business plan that you stick to. Various factors will determine the cost for your law firm startup, including whether you plan on a solo practice or a middle-sized firm and what type of office space you plan to rent.

On a small scale, you can expect to spend anything between $20,000 and $50,000, and on a medium scale practice, a reasonable estimate is about $250,000. On the other hand, opening a law firm specializing in niche areas of the legal industry requires well over a million since you need specialized legal teams, huge spaces, and plenty of marketing. These amounts include salaries and other running costs for the first three months of your new law firm.

Law Firm Requirements

These are the basic expenses required by any law firm startup. Some costs are steady, but others can change from person to person, depending on their needs and expectations.

Determine Where You Will Practice

Rentals vary in different cities and neighborhoods, but this is one of the first and highest costs you need to consider when opening your law practice. If the city you have decided on is costly, you could consider partnering with other lawyers to split the costs. This option requires that you know the rules surrounding shared office space. You can also start small, creating a practice run from your home.

Wherever the space you will practice from, even your home, you need to consider the cost of remodeling, signage, and ventilation to make it suitable for you, staff members, and clients.

Registering and Licensing

The fee for registering a law firm in the U.S. is $750. As a legal firm, you also need specific licenses, permits, and software for accounting. The cost of these is well over $3,000.

Law Firm Technology

Law firms rely on technology to run smoothly. These include computers, scanners, printers, phone lines, internet, internet protection, security for your office space, accounting programs for payroll and billing, and special legal programs.


Besides having flyers printed and organizing a grand opening, developing an online marketing strategy is vital to your law firm startup. You need to employ someone to build a professional website, pay hosting fees, and give your firm a presence on social media. In addition, you must develop an SEO strategy to reach your targeted clients and make a good impression.

Office Supplies

Office stationery is not expensive, but you cannot start a law firm without ink, printing paper for your printers, and other essential supplies like pens, envelopes, etc. So even if you want a paperless office, it is almost impossible in the legal industry.

Employee and Salaries

Depending on the size of your law firm startup, you may initially not have to worry too much about employees and salaries. Initially, you will need someone to answer the phone and take messages for you, even if you run a solo firm. You may even require some assistance from a paralegal, but you could always hire a freelancer as needed. If hiring, your costs will include employee insurance requirements and salaries, whether full-time or part-time.


Besides licensing fees, you will also have to pay federal and state taxes. These taxes depend on your earnings and the type of business structure you choose.

Final Take

Working out a budget for your law firm startup and keeping to it is essential to build your new law firm. It may take time to develop your firm as you want it, but keep your business model in mind, and work toward your goal, even if it means starting with a $1,000 budget and working from your desk at home.