Basic Details about a Law Firm ? Business Corporation Law

Have you been to a law firm office or have sough the services of a lawyer through a law firm? All over, you may notice many law firms advertising their legal services. However, do you really know the essentials about a law firm and its different forms and structures?

A law firm, in itself, is a form of business entity established by one or more attorneys/lawyers who are practicing either various areas of the law or just one. Law firms provide different legal services for clients. Prospective clients are either individuals or corporations with concerns that need the necessary or corresponding legal action.

Among the different kinds of legal services, the primary one being offered by law firms is professional advice for clients with regards to their legal responsibilities and rights. They are also expected to represent clients in business transactions, civil or criminal cases and other matters wherein legal assistance or intervention is necessary.

Smaller law firms tend to be focused on specializing in specific areas of the law, for example, personal injury, employment law, tax law, business and/or corporate law. On the other hand, larger firms tend to be composed of several number of practice groups specializing in different areas. This system allows the firm to have a diversified market and client base. They can also provide many types of services for their clients? satisfaction.

There are various ways and methods in the organization of a law firm. It depends upon the jurisdiction in which the firm?s law practice is engaged.

Here are the usual law firm arrangements:

- Sole Proprietorship ? only one attorney makes up the whole law firm. He or she is responsible for the profit, liability and loss that the firm may incur.

- General Partnership ? every lawyer in the firm has an equal share of ownership and liabilities incurred.

- Professional corporations ? has the same characteristics of a business corporation wherein the lawyers issue stocks.

- Limited Liability Company (LLC) ? in this structure, the owner-lawyers are addressed as ?members,? however, they have no direct liability to the law firm?s third party creditors.

- Professional Association ? its structure has similarities with the LLC or Professional Corporation.

- Limited Liability Partnership (LLP) ? the owner-lawyers consider themselves partners, though no partner can be liable to any of the law firm?s third party creditor. In addition, any one of the partners cannot be held accountable for any negligence done by a partner. The tax being charged for an LLP is that of a partnership but enjoys a corporation?s liability protection.

In the United States and many other countries, a rule is imposed that ownership interest or management of a law firm can only be given or done by lawyers. As such, the law firms? capital through ?initial public offerings? on the stock market, like most other corporations, cannot be raised immediately.

This rule is being promulgated by the American Bar Association in the U.S. and is being adhered to in almost all of the U.S. jurisdictions.

Source: http://akinomeroglu.com/basic-details-about-a-law-firm.html

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