4.1
Introduction

Choosing the entity type for your law firm is a very important decision, as it will influence many other aspects of how your practice operates. The entity type you choose will serve as the foundational structure of your business and your firm’s growth over time.  

There are different options for organizing your law firm. Different entity types carry their own set of advantages and challenges that you should carefully weigh. The two primary considerations when determining an operating structure are:  

  • Liability considerations (not including malpractice); and, 
  • Tax implications.
Consider the liability and business implications of the various entity types that are suitable for your practice, whether a sole proprietorship, professional corporation, partnership or limited liability partnership (if you are going into practice with another lawyer). 

Take the time to get accounting advice to help you determine the right operating structure for your situation. Talking to an accountant before you select the entity type can save you money in both the short and long-term.  

You may also want to speak to another lawyer, small business owner or business coach, either formally or informally, for advice or to discuss some of the opportunities and challenges in running a business. This will help ensure that your choice aligns with your long-term goals and complies with regulatory requirements, ultimately setting the stage for a successful and sustainable legal practice. 

Finally, be aware of any regulatory restrictions on the type of structure that you choose. For example, lawyers are not permitted to incorporate to escape liability – a professional corporation is really more of a tax planning tool and there are law society requirements that have to be met (Professional Corporations; Limited Liability Partnerships (LLPs) - Law Society of Alberta). 



Last modified: Tuesday, 10 February 2026, 3:08 PM