Text 5. LAW FIRM.

A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service provided by a law firm is to advise clients (individuals or corporations) about their legal rights and responsibilities, and to represent their clients in civil or criminal cases, business transactions and other matters in which legal assistance is sought.

Smaller firms tend to focus on particular specialties of the law (e.g. patent law, labor law, tax law, criminal defense, personal injury); larger firms may be composed of several specialized practice groups, allowing the firm to diversify their client base and market, and to offer a variety of services to their clients.

Law firms are organized in a variety of ways, but common arrangements include:

· sole proprietorship, in which the lawyer is the law firm and is responsible for all profit, loss and liability;

· general partnership, in which all of the lawyers in the firm equally share ownership and liability;

· limited liability partnership, in which the lawyer-owners are partners with one another, but no partner is liable to any creditor of the law firm nor is any partner liable for any negligence on the part of any other partner;

· limited liability company, in which the lawyer-owners are called «members» but are not directly liable to third party creditors of the law firm.

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. Thus, law firms cannot quickly raise capital through initial public offerings on the stock market, like most corporations. The rule was created in order to prevent conflicts of interest.

Lawyers are paid for their work in a variety of ways. In private practice, they may work for an hourly fee, a contingency fee (usually in cases involving personal injury), or a lump sum payment if the matter is straightforward. Normally, most lawyers negotiate a written fee agreement up front and may require a non-refundable retainer in advance. In many countries there are fee-shifting arrangements by which the loser must pay the winner's fees and costs.

Lawyers working directly on the payroll of governments, nonprofits, and corporations usually earn a regular annual salary. In many countries lawyers can also volunteer their labor in the service of worthy causes through an arrangement called pro bono (for the common good). Traditionally such work was performed on behalf of the poor, but in some countries it has now expanded to many other causes like the natural environment.

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