Law firms are organized in a variety of ways, depending on the
jurisdiction in which the firm practices. Common arrangements
include:
Sole proprietorship, in which the attorney
is the law firm and is responsible for all profit, loss and
liability;
General partnership, in which all of the attorneys in the firm
equally share ownership and liability;
Professional corporations, which issue stock to the attorneys
in a fashion similar to that of a business corporation;
Limited liability company, in which the attorney-owners are
called "members" but are not directly liable to third
party creditors of the law firm;
Professional association, which operates similarly to a professional
corporation or a limited liability company;
Limited liability partnership (LLP), in which the attorney-owners
are called "partners", but are not liable to third
party creditors of the law firm, except in certain limited circumstances.
In many countries, including the United States and the United
Kingdom, there is a rule that only lawyers may have an ownership
interest in, or be managers of, a law firm.
