Law firm assumes the risk of cost overruns As a result, lawyers must foresee all contingencies and fully understand the costs of providing services, or risk losing money on the engagement Client assumes the risk of a bad outcome Thus, unforeseen circumstances could lead to tensions around the need for higher quality work product and/or additional effort from the firm
Disadvantages include unlimited personal liability for all debts and liabilities of the business, limited ability to raise capital, and termination of the business upon the owner's death You should note that a small business owner might very well select the sole proprietorship to begin, and later, he or she may decide to form a different business type such as a limited liability company or corporation