Law school taught you the practice. Nobody taught you the firm — the entity filings, trust account, coverage decisions, payroll and systems that turn a lawyer into a law firm. Here’s the operational checklist for Texas, in the order that avoids re-doing things.
The short answer
Seven workstreams, roughly in order: entity → bank & trust accounts → insurance → systems → accounting → payroll (when you hire) → benefits (when you compete for talent). The two most expensive mistakes new Texas firms make are starting malpractice coverage late (your retroactive date starts when coverage starts — work done before it is never coverable) and treating the back office as something to figure out “once things settle.” Things don’t settle; they compound.
1. Choose and file your entity
Texas lawyers typically choose a PLLC, professional corporation, or LLP, filed through the Texas Secretary of State. What the entity does not do: shield you from your own malpractice — no structure does. What it mainly does: protect you from other people’s liabilities and organize taxes and ownership. Get entity advice from a business attorney and a CPA; the choice interacts with self-employment tax, partner admission, and — lightly — insurance. (Full breakdown coming in our entity-choice guide.)
2. Bank accounts and IOLTA
Operating account plus a properly titled IOLTA trust account at an approved institution. Trust accounting is the discipline where bookkeeping errors become bar problems — set up three-way reconciliation from day one, not after the first scare.
3. Insurance — on day one, not day ninety
Texas doesn’t require malpractice coverage — but the economics of claims-made insurance reward starting immediately: year-one premiums are at their lifetime low (often under $1,000), and every month before coverage begins is work that can never be insured afterward. The day-one panel for a new Texas firm: lawyers professional liability, cyber (client data from the first client), and general liability if anyone visits your office. Workers’ comp and EPLI join at the first hire.
4. Systems
Practice management, conflicts checking, document storage with real backups, and email on your own domain. Choose boring and reliable; migrating systems in year two costs ten times what choosing carefully in month one does.
5. Accounting from the first invoice
Books that separate operating from trust activity, track matter-level costs, and produce statements a bank will accept when you want a line of credit. A law-firm-literate bookkeeping setup in month one is cheap; reconstructing year one at tax time is not.
6–7. Payroll and benefits, when their moments come
Payroll infrastructure the week you make your first hire — not the week after. Benefits when you start competing for talent, which arrives faster than most founders expect.
The meta-decision: assembled or curated?
You can source each item above from a separate vendor and manage the seams yourself — most new firms do, and it quietly becomes a second job. The alternative is launching with the back office already curated: accounts, payroll, systems, insurance and benefits from one relationship, so you open your doors ready to practice instead of ready to administrate. That’s LawPAK’s “Launch” engagement, and it exists because the firms that start clean scale clean. Start the conversation before you file the entity — the sequencing advice alone is worth the call.
FAQ
What insurance does a new Texas law firm need on day one?
Lawyers professional liability (start it immediately — your retro date begins with coverage), cyber coverage, and general liability if you have premises exposure. Workers’ comp and EPLI become relevant at your first hire.
Does Texas require malpractice insurance to open a firm?
No — Texas has no mandate and no disclosure requirement. But claims-made economics make day-one coverage the cheapest protection you’ll ever buy.
What entity should a Texas solo choose?
Most choose a PLLC, PC, or LLP — but no entity shields you from your own malpractice. Make the choice with a business attorney and CPA based on tax and ownership plans.
When should a new firm set up payroll and benefits?
Payroll before the first paycheck; benefits when you begin competing for hires — typically by the second or third employee.
Companions: Texas requirements · Solo to five attorneys · The Law Firm Back Office
