How to Start a Solo Law Practice in 2026: The Billing & Finance Checklist

Law school teaches you the law. It doesn't teach you how to run a business.

When you hang your own shingle, there's a long list of practical decisions to make — from opening bank accounts to choosing billing software to setting up trust accounting. This checklist covers the billing and financial setup that every solo law practice needs from day one.

Week 1: Banking & accounts

Open your operating account

This is your firm's checking account for revenue and expenses. Keep it separate from your personal accounts.

What to look for:

• No or low monthly fees
• Free online bill pay
• Mobile check deposit
• Integration with payment processors (Stripe, LawPay)

Open your IOLTA trust account

If you handle any client funds — retainers, settlements, or escrow — you need a dedicated IOLTA trust account. This is not optional.

Steps:

1. Check your state bar's list of approved IOLTA depositories
2. Open the account at an approved institution
3. Ensure interest is routed to your state's IOLTA program
4. Never, ever use this account for firm expenses

Get an EIN

If you haven't already, apply for an Employer Identification Number from the IRS. You'll need it for your bank accounts, tax filings, and payment processor setup. It's free and takes 5 minutes online.

Week 2: Billing infrastructure

Set your hourly rate

Research market rates for your practice area and geography. Calculate your minimum viable rate based on target income, overhead, and realistic billable hours. (See our guide on setting hourly rates for the full framework.)

Choose billing software

You need a tool that handles:

• Time tracking — with a timer, not just manual entry
• Invoicing — generate from tracked time, send with payment link
• Trust accounting — per-client balance tracking

Don't overthink this. Pick something affordable that you'll actually use. You can always switch later.

Set up payment processing

Accept credit cards and ACH from day one. Clients who can pay online pay faster — average collection time drops from 45+ days to under 7.

Options:

• Stripe — 2.9% + $0.30 per transaction, easy setup
• LawPay — built for lawyers, separates earned/unearned fees
• Square — simple, but not legal-specific

Create your fee agreement template

Every engagement needs a written fee agreement. Include:

• Fee structure (hourly, flat fee, contingency)
• Billing frequency (monthly, upon completion)
• Payment terms (Net 30 is standard)
• Retainer requirements
• What happens if the client doesn't pay

Week 3: Trust accounting setup

Set up per-client tracking

From your very first retainer deposit, you need to track:

• Which client deposited how much
• The current balance for each client
• Every transaction (deposit, withdrawal, earned transfer, refund)

Do not wait to set this up. Retroactively reconstructing trust records is painful and error-prone.

Establish your transfer protocol

When you've earned fees:

1. Generate an invoice for the work performed
2. Transfer the earned amount from trust to operating
3. Record the transaction in your trust ledger
4. Send the client a statement showing the trust balance change

Plan monthly reconciliation

At the end of each month:

1. Compare your bank statement to your ledger total
2. Verify each client's individual balance
3. Document the reconciliation
4. Keep records for 5-7 years (check your state's requirement)

Week 4: Ongoing operations

Set a billing schedule

Consistency matters. Most solo attorneys bill monthly:

• 1st of the month: Review last month's unbilled time entries
• 2nd-3rd: Generate and send invoices
• 15th: Follow up on unpaid invoices from prior month

Track your metrics

From month one, know these numbers:

• Utilization rate — billable hours ÷ total working hours
• Collection rate — amount collected ÷ amount billed
• Average days to payment — how long clients take to pay
• Effective hourly rate — total collections ÷ total hours worked (including non-billable)

These tell you whether your practice is healthy — or heading for trouble.

Build a 3-month cash reserve

Solo practice income is lumpy. Some months you'll collect $15,000; others you'll collect $3,000. A 3-month operating reserve prevents cash flow crises from becoming emergencies.

Don't overcomplicate it

The biggest mistake new solo attorneys make is spending weeks researching the "perfect" setup. Good enough today beats perfect next month. Get the basics in place, start working, and refine as you go.

SoloFlow handles time tracking, invoicing, and trust accounting in one simple tool — designed for solo attorneys, $29/month flat. Start your 14-day free trial today, no credit card required.