A lawyer or group of lawyers may limit legal liability and minimize income tax and payroll tax costs by forming a business as a limited liability entity. In this video, Madison attorney Joe Boucher discusses why this is one aspect of running a business lawyers should not overlook.
July 17, 2013 – Lawyers who form limited liability entities limit their legal liability from the firm’s general debts or contractual obligations as well as from negligence and misconduct of other members in the firm. In this video, Madison attorney Joe Boucher discusses why this oft-overlooked protection is the smart way to do business.
Don’t Be Liable for Others’ Mistakes
Multiple lawyers have even more reason than sole practitioners to have an LLC. “You can be liable for others mistakes, especially if you are supervising them,” says Boucher. “General partners can be liable for each other’s mistakes as well.”
Check Your Tax Status
Boucher says to “look at your tax dollars, become a corporation and save on taxes.” Whichever entity you choose, Boucher recommends consulting a CPA for advice concerning the taxibility features of a particular entity.
Which Form is Best for Your Law Firm?
Law practices can be formed as a limited liability company (LLC), a limited liability partnership (LLP), or a service corporation (S.C.). Not sure which one is best for your firm or for your tax situation? Read “Choosing a Limited Liability Entity: Which Form is Best for Your Law Firm?” by Joe Boucher and Jennifer Lynn Knudson, Neider & Boucher S.C., Madison, in the July/August Wisconsin Lawyer.