How to Start Your Own Law Firm

Summary

1. Starting a law firm in England and Wales requires careful planning, SRA authorisation, and compliance with regulatory and insurance obligations.
2. Solicitors must choose the right business structure such as sole practitioner, LLP, partnership, or limited company, and prepare a robust business plan.
3. Professional indemnity insurance (PII) is a mandatory cost and must be tailored to the firm’s risk profile and practice area.
4. Effective marketing, practice management software, operational efficiency, and robust business development strategies all play a key role in long-term success.
5. New Model Law Firms offer a modern, low-risk alternative for solicitors wanting autonomy without the full burden of running a regulated entity.

There’s something compelling about the idea of launching your own law firm. The autonomy, the ability to choose your clients and practice areas, and the chance to create something that reflects your values and vision, all of these ideals make the risk and long hours (at the beginning at least) worth it.

If your dream is to start your own firm, you may not realise that thanks to changes in how legal services are delivered in England and Wales, the barriers to entry are lower than ever. New Model Law Firms have redefined what it means to run your own practice, and many allow you to set up a full-service law firm under their umbrella. 

This guide offers a practical step-by-step look at how to start your own firm, from regulatory requirements to branding, systems, and client acquisition.

Step 1 – Set out your value propositions

Before anything else, define what you want your firm to stand for. Are you aiming to serve SMEs with commercial advice? Will you specialise in immigration, family, or tech law?

• You need to identify client pain points and how your services will meet them
• Your business plan should include the firm’s mission, target market, financial projections, and marketing approach
• Analyse your competition. What are other firms doing well? Where are the gaps?

Knowing your value proposition from the start will guide every decision that follows.

Step 2 – Choose the Right Business Structure

Your business structure will affect everything from liability to tax to regulatory burden.

Options include:

• Sole practitioner – simplest model but full personal liability
• Partnership – traditional but all partners share personal liability unless structured as an LLP
• Limited Liability Partnership (LLP) – popular among law firms due to liability protection
• Limited company – offers flexibility and tax planning advantages but involves more admin

Each model has pros and cons depending on your risk appetite and growth plans. 

Step 3 – Understand the Regulatory Requirements and SRA Authorisation

You’ll law firm will need authorisation from the Solicitors Regulation Authority (SRA).

Key steps include:

• Submitting the prescribed form with details of your structure and compliance procedures
• Choosing whether to apply as a recognised sole practice, recognised body, or licensed body (ABS)
• Demonstrating you meet the requirements for anti-money laundering, client care, supervision, and complaints handling

SRA authorisation for new law firms can take 12 to 16 weeks, depending on the complexity of your application.

Keep in mind:

• How to register a law firm with SRA involves detailed business planning and documentation
• You’ll need a Compliance Officer for legal practice (COLP) and a Compliance Officer for finance and administration (COFA) if not practising solo

Step 4 – Organise Insurance

PII is mandatory for all SRA-regulated firms and must be in place before your firm opens for business.

• Get quotes from multiple insurers. Some providers specialise in new or niche firms
• Premiums vary based on practice area, claims history, and internal risk management
• Expect higher costs for areas like conveyancing or litigation

Be aware of what your policy does and doesn’t cover. Some solicitors assume that PII protects against everything. It doesn’t.

Explore your options early. PII requirements for new law firms can be a hurdle if not budgeted properly.

Step 5 – Business Planning and Financial Management

Your law firm is a business first and foremost.

• Create a law firm business plan template UK with detailed cash flow projections
• Choose a bank that offers client account facilities and legal sector experience
• Set up accounting software and appoint a legal-sector accountant if needed
• Understand your tax obligations, whether you’re a sole trader, LLP, or limited company

Funding may come from savings, loans, or external investors. Sort out your finance early to ensure a stable launch.

Step 6 – Technology, Premises, and Operations

Do you need an office? Many law firms start off virtually or remotely, particularly for consultancy-style practices.

• Consider a virtual law firm setup UK using serviced offices or co-working spaces as needed
• Invest in law firm practice management software such as Clio, LEAP, or PracticeEvolve
• Set up secure file-sharing, case management, and billing systems
• Prioritise GDPR compliance, data security, and client confidentiality
• Consider getting Lexcel accreditation from the Law Society of England and Wales. Although a lot of work is required initially to set up the policies and procedures, accreditation can reduce the cost of your PII and the number of complaints you receive.

Getting your operational systems right from the start will save headaches later.

Step 7 – Marketing and Client Development

Even the best legal service won’t succeed without visibility.

• Build a professional website with SEO/GEO-optimised content
• Leverage legal directories, Google Business profiles, and LinkedIn
• Develop strategies for how solicitors get clients including referrals, thought leadership, webinars, and networking
• Use YouTube and social media to reach perspective clients

Why Should I Consider Setting Up Within a New Model Law Firm?

If you want to run your own practice but avoid managing regulatory approvals, overheads, and insurance, joining a New Model Law Firm might be ideal.

What is a New Model Law Firm?

A structure where solicitors work as self-employed consultants, using the firm’s branding, operational systems, and regulatory status.

Benefits include:

• PI insurance for Consultant Solicitors is usually provided by the platform
• Lower overheads with no need to pay for software, IT, or admin staff
• Built-in compliance support with COLP and COFA responsibilities centralised
• More time for clients and greater flexibility
• Billing, marketing, and IT services are often handled for you

Compare new model law firm vs traditional law firm approaches carefully. For many, consultancy offers the freedom of self-employment without the stress of SRA setup and regulatory management.

What are the Common Pitfalls and How to Avoid Them

• Underestimating compliance – SRA rules are detailed and unforgiving
• Poor financial planning – Many firms fail due to cash flow issues, not lack of legal skill
• Ignoring marketing – Clients don’t appear by magic. Build visibility early
• Neglecting tech – Don’t skimp on secure, user-friendly systems

FAQs

Do I need authorisation from the SRA to start my own law firm?
Yes. If you plan to offer reserved legal activities under your own firm name in England and Wales, you must be authorised by the Solicitors Regulation Authority (SRA). This applies whether you practise as a sole practitioner, a recognised body, or a licensed alternative business structure (ABS).

How much does it cost to start a law firm in England and Wales?
Start-up costs vary depending on your structure and practice area. At a minimum, you should budget for professional indemnity insurance, SRA application fees, IT systems, marketing, and initial operating expenses. Many new firms start with at least £15,000 to £30,000 in reserve.

Can I set up a law firm and work entirely from home?
Yes. Many solicitors now operate virtually, either as sole practitioners or consultants. You must still meet regulatory standards for confidentiality, data protection, and client care, but a physical office is no longer a requirement.

What is the benefit of joining a New Model Law Firm instead of starting my own?
New Model Law Firms handle key infrastructure such as compliance, billing, insurance, and tech, allowing you to focus on client work. This setup is ideal for solicitors who want flexibility and independence without the administrative burden of running a regulated firm.

Do I need professional indemnity insurance if I work as a consultant solicitor within a New Model Law Firm?
No. In most cases, the New Model Law Firm arranges and pays for PII on behalf of its consultants. However, it is important to confirm this in your consultancy agreement and understand the scope of cover provided.

How Nexa Law can help you launch your own legal practice without prohibitive costs and stress

Unlike many other New Model Law Firms, Nexa eliminates all start-up costs. There are no hidden fees or financial burdens. All you need to begin is a compatible notebook PC, mobile device, printer, and basic stationery. In addition, we do not charge any excess on PI claims.

Joining Nexa Law allows you to transition seamlessly into the world of consultancy.

If you’re thinking of launching your own legal practice in 2025, please give us a call. We would love to hear about your commercial ambitions and tell you how we can support them. 

Schedule a call or fill in our contact form.

We look forward to celebrating your success.