What It Actually Costs to Start a Law Firm in Chicago

What does it cost to start a law firm in Illinois?

The mandatory cost of becoming a practising Illinois solo is $385 a year — or nothing at all if you were admitted since January 2025. That's ARDC registration, and it's the only thing Illinois actually requires. Everything else on any startup list is a choice, and the choices are where the real money is.

That surprises people. It surprised me when I worked it through properly.

What are the unavoidable costs?

ARDC registration, and a trust account if you'll hold client money. That's the entire mandatory list. Everything else below — entity formation, the annual report, an EIN — is either optional or free, and the whole sequence is done in an afternoon once you know what's actually required.

Two things here catch attorneys out, and the first one surprised me.

You don't have to form an entity. Illinois doesn't require attorneys to register a business, and a sole proprietorship needs no state filing at all — you'd register an Assumed Name only if you practise under something other than your own name.

Form one anyway, and here's the specific reason. As a sole proprietor you are personally liable for every contract the practice signs. The office lease, the equipment, the vendor agreements, the staffing contracts. You and the firm are the same legal person, so if the practice can't pay, the claim lands on your personal assets.

Sign a three-year lease as a sole proprietor and close the practice in year two, and the landlord comes after you. Sign it through a PLLC and the claim is against the PLLC.

In full disclosure, I lease offices to attorneys, so I'm on the other side of precisely that contract. I'd still rather you signed as a PLLC.

What a PLLC does not do is shield you from your own malpractice. You remain personally liable for your own professional negligence whatever entity you practise through. That's what the insurance is for — the two are separate decisions, not alternatives.

If you do form one, it must be a PLLC, not an LLC. Illinois has required licensed professionals to use a professional limited liability company since August 2018. Every generic "how to start an LLC in Illinois" guide — and several rank for law firm queries — will walk you into the wrong entity. Existing LLCs had to amend.

The ARDC's early-career discount is gone. The reduced $121 fee for attorneys admitted under three years was eliminated effective October 2024. If you were admitted in 2024 or later you pay nothing for a while, then the full $385. There's no longer a middle step.

Do I need malpractice insurance in Illinois?

No, and this is the most misunderstood item on any startup list. Illinois does not require malpractice coverage. What Rule 756(e) requires is that you disclose annually whether you carry it — and if you're in private practice without coverage, you must complete the ARDC's four-hour Proactive Management-Based Regulation self-assessment every two years.

Not insurance. Just homework, and a public record of your answer.

Carry it anyway, and here's the number that makes the case. A first-year solo policy typically costs under $1,000, because claims-made coverage has almost no prior work to insure. It steps up at each renewal, levelling around $2,000 to $4,000 by year five or six at $1M/$3M limits.

ISBA Mutual reports that the average cost of defending a meritless claim is about $28,000.

A claim doesn't need merit to be filed against you. Defending one without coverage costs roughly thirty times your first-year premium.

What does software actually cost?

Less than the people writing about it suggest, and in Illinois considerably less than that. A working solo stack runs about $1,400 a year and a minimum viable one under $100 — because Illinois attorneys have a benefit most of them don't know they're already paying for.

The reason is a benefit most Illinois attorneys don't know they have.

ISBA membership is free in your first year after admission, then $75 for years two and three, rising to $455 at eleven years and beyond. Included at every level: vLex Fastcase, which sells standalone at $695 a year, plus fifteen hours of on-demand CLE and daily Illinois case digests.

An eleven-year attorney pays $455 and receives more than that back in research alone.

For everything else:

Two Illinois specifics worth knowing. E-filing through Odyssey eFileIL is free — the state charges nothing for the service, though court filing fees and payment processing still apply. And Cook County requires a five-digit Cook County Attorney Number, distinct from your ARDC number, before you can e-file. Get it from the Clerk before your first filing, not during it.

Practice area changes this more than anything else. Immigration and bankruptcy both have effectively mandatory specialist software — roughly $800 to $1,400 a year for immigration case management, and petition software for bankruptcy. Estate planning, family law, personal injury, and litigation can all run on general practice management plus free or occasional tools.

What does space cost?

A business address is $69 to $119 a month depending on the building. A private office starts at $650 and an associate-size office with a window runs closer to $1,450. Between them sit a virtual office at $205 and Virtual Office Plus at $368.

Virtual Office Plus is the one worth explaining, because it solves a problem software doesn't. It includes court runs — courtesy copies to judges, Clerk's office filings, Recorder of Deeds, Cook County Sheriff process service drops, Secretary of State filings — plus two free day offices a month.

You're in a hearing at ten. Something has to be filed by four. There is no app for that.

Conference rooms are hourly — $55 for a small room, $330 for a full day — so meeting clients doesn't require a lease.

Whether you need any of this is a longer question, and the answer isn't the same for every practice.

What does everyone leave off the list?

Operating capital, and it's larger than everything above combined. Most startup checklists mention it in a sentence. The guidance that takes it seriously says you need enough cash or credit to cover startup costs plus six to twelve months of business and personal expenses.

That's the real number. Not the $150 filing fee.

It's also where the two scenarios diverge completely. An attorney leaving a firm with clients who follow needs relatively little runway, because revenue starts in month one. An attorney starting cold needs the full twelve months, and that figure dwarfs every other line on the page.

Nobody can calculate that for you. But if you only do one piece of arithmetic before launching, do that one.

A few other things commonly left off: a business operating account and a savings account for taxes, separate from your IOLTA. Payment processing so clients can pay by card. Health insurance, which for someone leaving a firm and losing group coverage is likely your second-largest line item. A CPA or bookkeeper, because Rule 1.15 requires monthly three-way reconciliation and per-matter client ledgers, and that is not a task to learn on live client funds.

So what's the real number?

Between roughly $1,200 and $23,400 for year one, depending almost entirely on whether you already have clients when you start. Here are four versions, each including compliance, software, and space, built from the Illinois figures above rather than from national averages or estimates.

Newly admitted, working from home. ARDC $0, sole proprietorship so no entity cost, business address $69/month, minimal software. About $1,200.

Experienced attorney, virtual office and reception. ARDC $385, PLLC $275 first year, virtual office $205/month, live reception with 100 minutes at $343/month, conference rooms twice monthly, working software stack. About $10,300.

Experienced attorney, entry private office. Same, with a $650 office instead. About $13,800.

Experienced attorney, associate-size window office. About $23,400.

None of these include operating capital or health insurance, because both depend on facts I don't have. Add them.

Frequently asked questions

The number that actually decides it

I've watched a lot of attorneys launch practices — more than fifty through Chicago-Kent's incubator programme alone, where we've provided space and services free since 2013.

The ones who struggle are almost never the ones who spent too much on an office. They're the ones who ran out of runway in month seven.

Which is why I find the $3,000 figure frustrating rather than wrong. It answers a question about line items when the question that ends practices is about time — how long you can go before the money arrives, and whether you were honest with yourself about that before you started.

Work out your runway first. Everything on this page is easier to decide once you have.

Questions about any of this? 312.924.0200 or [email protected].