A law firm owner makes whatever the firm earns after paying everyone else and every bill, so the honest range is wide. The IRS's own figures put the average solo law practice reporting on Schedule C at about $59,800 of net income in tax year 2023, and practices that made a profit averaged about $82,500.
The sections below explain where those figures come from, why the firm's profit and your take-home are different numbers, and how to set your own pay so it holds up in a slow month.
What do law firm owners actually make?
The cleanest public data on owners comes from tax returns. The IRS Statistics of Income program publishes sole proprietorship statistics by industry. Its Table 1 for tax year 2023, the latest year published, has a row for legal services. We divided the totals by the number of returns:
| Legal services, Schedule C returns, tax year 2023 | All returns | Returns with net income |
|---|---|---|
| Number of returns | 316,370 | 244,828 |
| Average business receipts | about $136,600 | about $166,800 |
| Average net income | about $59,800 | about $82,500 |
| Net income as a share of receipts | about 44% | about 49% |
About 71,500 of those returns, close to one in four, reported no net income for the year.
Read these figures with their limits in mind. They're averages from a sample, and a few high earners pull an average up. They include part-time and side practices. They cover only owners who file as sole proprietors, so firms set up as partnerships or S corporations aren't in them. And net income here is before the owner's income tax and self-employment tax.
For comparison, the Bureau of Labor Statistics puts the median annual wage for lawyers at $159,670 in May 2025. That's a wage figure for lawyers paid as employees. An owner can out-earn it with a profitable firm and can earn well below it with a thin one, which is why the firm's books answer the question better than any survey.
Why the firm's profit and your take-home differ
The profit on your profit and loss statement is what the firm earned. Your take-home is what actually reached your personal account. Several things sit between them.
Taxes come out of profit. If you're a sole owner, self-employment tax starts from the net profit on the firm's Schedule C, and you file Schedule SE once your net earnings from self-employment reach $400 for the year, according to the IRS Schedule SE instructions. Income tax comes on top. Set money aside for the quarterly estimates before you call the rest yours.
Cash arrives later than profit. If the firm keeps its books on an accrual basis, a fee you invoiced in March counts toward March even when the client pays in June. Contingency matters can leave months of work unpaid until a case resolves. Profit on paper doesn't pay your mortgage until it's collected.
Client money was never yours. Funds held in an IOLTA or other trust account belong to clients until fees are earned and moved to operating. A healthy trust balance can make the firm look richer than it is. Our IOLTA account guide covers how to keep that line clean.
Draws don't change profit. When you take an owner's draw, the books record it against your equity in the firm. It isn't an expense, so a big draw doesn't make the firm look less profitable. It just leaves less cash in the operating account.
How do I pay myself from my law firm?
The mechanics depend on how the firm is taxed.
Sole owner, taxed as a sole proprietorship or single-member LLC. You pay yourself with draws from the operating account. There's no payroll for you. Self-employment tax starts from the firm's net profit, which your draws don't reduce. The practical work is choosing a draw you can repeat every month and sending a share of each month's profit to a tax savings account.
Two or more owners, taxed as a partnership. The partnership agreement should say how profit is split and whether any partner gets a fixed payment for their work. If partners are drawing different amounts than the agreement says they've earned, the books and the agreement will disagree at year end. Write the pay arrangement down, and have your tax preparer confirm how each partner's payments are reported.
Owners taxed as an S corporation. The IRS says an S corporation must pay a shareholder who works in the business reasonable compensation before it makes other distributions. That salary runs through payroll. Profit above it can come out as distributions.
To judge what's reasonable, the IRS looks at where the firm's gross receipts come from. Fees you earn from your own legal work point toward wages. Fees produced by associates and paralegals who aren't owners can support distributions. In a solo practice where you do most of the billable work, most of the receipts come from you. The IRS also weighs your training and experience, your duties, the time you put in, and what comparable firms pay for similar services. It doesn't publish a safe percentage, so set the actual salary with your tax preparer and keep the evidence for it. Our guide to S corp reasonable salary and payroll covers the payroll side, and the S corp tax calculator gives a first estimate of whether an election pays off.
Setting a pay schedule that survives slow months
Paying yourself whatever is in the account at month end leaves nothing for a slow month. A schedule built from the books holds up better.
Start with a fixed monthly amount you'd be comfortable paying in your slowest quarter of the past year. Pay it on the same date every month, as a draw or through payroll depending on your setup. Each month, after the books are closed, move a set share of that month's profit into a tax account. Then take any extra profit out once a quarter, after you've checked the operating cash cushion and what clients still owe the firm.
If the fixed amount keeps failing, the books will show why: slow collections, write-offs, an associate who doesn't yet cover their cost, or overhead that grew faster than fees. Our law firm KPI dashboard lays out the monthly numbers that show which of those is happening.
Get the numbers every month
Every part of this depends on operating books that are current, with earned fees recorded when they move out of trust, and owner pay recorded separately from expenses. When the books run months behind, owners set their own pay by guessing at the bank balance.
Median keeps the operating books for solo and small law firms, with monthly reports an accountant reviews, and prepares the tax return and tax planning, including how much to pay yourself. Median doesn't sell CFO services, and trust work gets a separate fit review. See bookkeeping for law firms, or book a 20-minute call with Jacob to talk through how you pay yourself.