Law Firms: LLP vs PC vs LLC by State

What to know

• CA attorneys: LLP or PC only; the $800 still applies to PCs.
• Delaware LLPs face HB 400 per-partner increases: model headcount cost.
• Trust accounts (IOLTA) have their own compliance universe beyond entity tax.

California entity options

California attorneys can't practice through an LLC. They use professional law corporations or registered limited liability partnerships (LLPs), which must carry malpractice insurance or security. LLPs pay the $800 annual tax like LLCs; professional corporations pay the corporate minimum or rate.

Delaware LLPs after HB 400

Firms organized as Delaware LLPs pay an annual fee per partner. HB 400 raised it from $200 to $300 per partner for tax year 2026, and the cap from $120,000 to $180,000: a 50-partner firm now pays $15,000 a year instead of $10,000.

Beyond entity tax

Client trust accounts, including IOLTA accounts, follow bar rules on record-keeping and reconciliation that matter far more to a firm's standing than entity choice. Multistate firms also track which attorneys are admitted where and register the firm in each state where it has an office.