In California, establishing a California Professional Law Corporation taxed as an S Corporation is the most popular business structure for licensed attorneys providing legal services in California.

A separate article titled “What Liability Protection Does a California Professional Law Corporation Provide?” examines the liability for licensed attorneys (when they are personally liable and the limitations on malpractice insurance) providing legal services in California and establishing how and why a California Professional Law Corporation is the only limited liability option that separates professional liability and business debts from personal assets for licensed attorneys in order to limit personal liability and provide personal liability protection. However, this article will focus solely on the tax benefits of practicing law in a California Professional Law Corporation.

The goal of this article is to equip licensed attorneys with the information needed to make informed decisions with respect to their liabilities to pay tax and tax planning strategies. It is crucial to ensure that the chosen business entity aligns with tax planning goals of the licensed attorney while adhering to California law, including the California Corporations Code, the Moscone-Knox Professional Corporations Act, the California Business and Professions Code, and other relevant regulations, as well as the rules of government agencies overseeing the practice of law, such as the State Bar of California.

Executive Summary: Putting the Conclusion First for Busy Attorneys

A licensed attorney should form a California Professional Law Corporation if they anticipate an immediate or future tax benefit.

Most licensed attorneys establish California Professional Law Corporations exclusively for the tax benefits of practicing law using a California Professional Law Corporation even if only the tax benefits are sought by the licensed attorney, and even if they do not feel they need the benefit of the liability protections and separation of their personal assets from the debts, liabilities, obligations, and legal judgments against their professional practice that operating as a California Professional Law Corporation provides.

For most licensed attorneys in most legal practices, the experienced corporate attorneys at San Diego Corporate Law recommend the use of a California Professional Corporation for the limited liability protections and tax benefits a California Professional Law Corporation provides.

It is worth noting that LLCs and PLLCs are not permitted for use with legal practices in California.

Choosing the right business structure for your legal practice can be a complex task. For tailored advice that considers your specific circumstances, schedule a consultation with the experienced attorneys at San Diego Corporate Law. Our team is committed to assisting licensed attorneys in determining whether a California Professional Law Corporation or another business structure best suits their needs, maximizing tax benefits while minimizing liability risks. Schedule a consultation today to ensure your legal practice is structured for success.

Tax Benefits Overview for Licensed Attorneys

Selecting the ideal business structure to render professional service requires a deep understanding of tax implications. A California Professional Law Corporation that opts for S Corporation status can provide substantial tax benefits, especially in relation to self-employment and payroll taxes.

Self-employed attorneys are responsible for covering the full Social Security and Medicare taxes, totaling 15.3% of net profit up to the statutory cap, which is $168,600 as of 2024. Beyond this cap, they must pay 2.9% on all net profit. Additionally, there is a 0.9% Medicare tax for single taxpayers earning $200,000 or more and for married taxpayers filing jointly with incomes of $250,000 or above, added to the 2.9%.

A California Professional Law Corporation taxed as an S-Corp (a corporate structure with pass through taxation in which the corporation’s income tax is paid on personal tax returns for potential tax savings) offers a strategic way to minimize self-employment taxes. By providing a market-rate salary to licensed attorney shareholders, the salary becomes subject to payroll taxes of 15.3% up to the statutory cap ($168,600 in 2024) and 2.9% for earnings above this limit. The remaining profits can then be distributed as shareholder distributions, which are not subject to payroll or self-employment taxes. This approach can result in significant tax savings for licensed attorneys who balance their salary for legal services with the distributions on their shares of stock based upon ownership of their California Professional Law Corporation.

When do the California Professional Corporation Benefits Make Sense for a Licensed Attorney?

Most licensed attorneys would benefit from practicing with a California Professional Law Corporation in California, with the exceptions being very low revenue legal practices without employees and with no plans for future growth of the legal practice.

Lower Net Income Practices without Employees or Independent Contractors

If a licensed attorney works alone, has no employees or independent contractors, is fully insured, and runs a practice with an annual net income below $50,000 to $60,000 without the intention to grow the legal practice in the future, operating as a sole proprietorship in California may be suitable for that licensed attorney.

Lower Net Income Practices with Employees or Independent Contractors

For licensed attorneys earning less than $50,000 to $60,000 in net income annually without plans to grow their legal practice in the future, establishing a California Professional Law Corporation is still recommended if the licensed attorney has or plans to have employees or independent contractors at any point in time, because California Professional Law Corporations offer protection to the licensed attorney shareholder from liabilities related to their employees and independent contractors, including vicarious liability and malpractice liability claims.

Higher Net Income Practices Regardless of Liability Concerns

A licensed attorney earning (or planning to earn) over $60,000 in net income annually should seriously consider practicing law in a California Professional Law Corporation regardless of liability concerns because the tax savings of a California Professional Law Corporation can outweigh the additional administrative costs associated with practicing law in a California Professional Law Corporation, and these tax savings can be significant.

Starting a New Practice Without Certainty of Future Performance

Licensed attorneys planning to start practicing law small and grow their legal practice over time should carefully consider the administrative challenges of initially operating as a sole proprietor or general partnership with plans to later convert to a California Professional Law Corporation. It is best to schedule a consultation with an experienced corporate attorney for advice on the challenges for converting a thriving legal practice from a sole proprietorship or general partnership to a California Professional Law Corporation versus forming the California Professional Law Corporation as a part of starting their legal practice.

Tax Benefit Details for Licensed Attorneys

The organizational structure of a California Professional Law Corporation offers significant liability protection for licensed attorneys. However, it is essential to also consider its tax implications. Establishing a California Professional Law Corporation may also lead to favorable tax results. By understanding the tax benefits of California Professional Law Corporations compared to the taxation of sole proprietorships and general partnerships, licensed attorneys can make more informed decisions when selecting a business entity for their practice of law.

The tax benefits of a professional business entity are influenced by several factors: the net income of the practice before distributing funds to owners, additional income earned by the owners, and their overall tax strategy.

Certain tax situations can diminish the usual benefits of forming a California Professional Law Corporation from a tax perspective. This is especially true when the net income of the legal practice before compensation to the attorney owner is relatively low or when other income of the attorney owner already meets the FICA cap. In such cases, the tax advantages of a California Professional Law Corporation may be diminished.

California Professional Law Corporations are by default C Corporations (C-Corps) and typically face double taxation at personal service corporation rates (sometimes referred to as professional service corporation rates). However, California Professional Law Corporations have the option to elect S Corporation status, which is advantageous for most legal practices. This article will concentrate on the benefits of S Corporation taxation, omitting detailed discussions on professional C Corporation (C Corp) taxation and the issue of double taxation generally.

This section examines tax concerns for licensed attorneys, helping them assess whether establishing a California Professional Law Corporation aligns with their financial objectives and tax efficiency strategies.

FICA Tax Liability

The FICA tax is a mandatory payroll tax in the United States that funds Social Security. Both employees and employers share the responsibility of paying FICA taxes.

The FICA tax is directly deducted from the wages or salaries of employees at a rate of 6.2% of their gross income. Employers must match this contribution with an additional 6.2%, resulting in a total contribution of 12.4% per employee.

For self-employed individuals, such as attorney sole proprietors and attorney general partners in general partnerships, the FICA tax is calculated differently. Instead of being based on wages or salaries, it is assessed at 12.4% of the net income attributed to the self-employed person (whether a sole proprietor or general partner) from their legal practice.

The FICA tax is applied solely to income or net income up to a specified limit, which is annually adjusted for inflation. As of 2024, this cap is set at the first $168,600 earned.

FICA Tax Liability for Sole Proprietors and General Partners

Licensed attorney sole proprietors and licensed attorney general partners in general partnerships shoulder the entire FICA tax burden on the net income of a California legal practice, each up to their individual FICA cap. Unlike professional employees who split this tax with their employers, self-employed attorneys must cover both the employer and employee portions, resulting in a total FICA rate of 12.4% for attorney sole proprietors and attorney general partners in general partnerships.

The following are some examples of FICA tax liability for a licensed attorney with various net income:

$50,000 net income x 12.4% = $6,200 FICA tax liability

$150,000 net income x 12.4% = $18,600 FICA tax liability

$300,000 net income x 12.4% = $20,906 FICA tax liability (limited by $168,600 FICA cap for 2024)

FICA Tax Liability for California Professional Law Corporations Taxed as S Corporations

When a California Professional Law Corporation opts for S Corporation status for tax purposes, it modifies the approach to handling FICA tax liability for its licensed attorney shareholders. Unlike attorney sole proprietors or attorney general partners of general partnerships, who pay FICA taxes on their entire net income, California Professional Law Corporations taxed as S Corporations offer a potential reduction in FICA tax liability by distributing a portion of business profits as shareholders distributions rather than wages. However, licensed attorney shareholders actively participating in the daily operations of the California Professional Law Corporation must still receive reasonable compensation which is subject to FICA taxes. This reasonable salary is taxed at the 12.4% FICA rate up to the annual wage base limit, with a 6.2% contribution deducted from the wages of the licensed attorney shareholder as an employee and a matching 6.2% paid by the California Professional Law Corporation.

Licensed attorney shareholders may receive distributions from any profits beyond their reasonable salary exempt from FICA taxes. This allows licensed attorneys in California Professional Law Corporations electing S Corporation taxation to strategically organize their income to reduce FICA tax liabilities as long as they adhere to Internal Revenue Service guidelines for determining reasonable compensation.

Here is an example of FICA tax liability for a licensed attorney earning a minimum fair market value salary as determined by Internal Revenue Service guidelines:

$50,000 salary x 12.4% = $6,200 FICA tax liability

This applies regardless of whether the licensed attorney shareholder also receives $100,000, $250,000, or any other amount as a distribution through shares of stock in the California Professional Law Corporation.

This approach requires planning and documentation, as non-compliance with reasonable compensation standards could lead to the reclassification of distributions as wages, incurring additional FICA tax liabilities and penalties. Nonetheless, a $50,000 salary can be considered reasonable according to Internal Revenue Service standards, regardless of the total net income of the California Professional Law Corporation.

FICA Tax Liability Conclusion

When comparing FICA tax liability, attorney sole proprietors and attorney general partners of general partnerships are taxed on the total net income of their legal practice. In contrast, a California Professional Law Corporation that elects S Corporation taxation can divide its income into that which is paid to a licensed attorney shareholder as salary subject to the FICA tax and shareholder distributions paid to the licensed attorney shareholder through the shares of the stock of the California Professional Law Corporation, which distributions are not subject to the FICA tax.

Based upon the examples above, a California Professional Law Corporation taxed as an S Corporation that pays a $50,000 fair market salary to a licensed attorney shareholder as an employee could save that licensed attorney shareholder up to $14,706 per year based on the 2024 FICA tax cap of $168,600 compared that same net income being paid to a California attorney sole proprietor or attorney general partner.

Medicare Tax Liability

The Medicare tax is a mandatory payroll tax in the United States, supporting the federal Medicare insurance program. Responsibility for paying these taxes is shared between employees and employers.

For employees, the Medicare tax is deducted directly from their wages or salaries at a rate of 1.45% of their gross income. Employers must also contribute an additional 1.45% on behalf of the employee, resulting in a total contribution of 2.9% per employee.

For self-employed individuals, including attorney sole proprietors and attorney general partners in general partnerships, the Medicare tax is calculated not on wages or salaries, but rather as 2.9% of the net income of the legal practice attributed to the licensed attorney owner.

Unlike the FICA tax, which is imposed only on income up to a certain threshold, the Medicare tax has no cap on the amount owed by an employee, attorney sole proprietor, or attorney general partner.

Medicare Tax Liability for Sole Proprietors and General Partners

As attorney sole proprietors or attorney general partners of a general partnership, these licensed attorneys shoulder the entire Medicare tax burden on their net income. Unlike employees who share this responsibility with their employers, self-employed attorneys must cover both the employer and employee portions of the tax, resulting in a total Medicare tax rate of 2.9%.

The following are some examples of Medicare tax liability for a licensed attorney with various net income:

$50,000 net income x 2.9% = $1,450 Medicare tax liability

$150,000 net income x 2.9% = $4,350 Medicare tax liability

$300,000 net income x 2.9% = $8,700 Medicare tax liability

Medicare Tax Liability for California Professional Law Corporations Taxed as S Corporations

When a California Professional Law Corporation opts for S Corporation status for tax purposes, it changes how Medicare tax obligations are managed for its licensed attorney shareholders. Unlike attorney sole proprietors or attorney general partners of a general partnership who pay Medicare taxes on their entire net income, California Professional Law Corporations taxed as S Corporations offer a way to potentially reduce Medicare tax liability by classifying a portion of business profits as distributions on shares of stock instead of wages. Licensed attorney shareholders actively engaged in the daily operations of the legal practice must still receive reasonable compensation, which is subject to Medicare taxes. The Medicare tax responsibility is split, with a 1.45% contribution from the wages of the licensed attorney shareholder as an employee and a matching 1.45% paid by the California Professional Law Corporation.

Licensed attorney shareholders must receive a reasonable salary, but any additional profits can be paid as shareholder distributions to the licensed attorney shareholder not subject to Medicare taxes. This allows licensed attorneys with California Professional Law Corporations taxed as S Corporations to strategically manage their income and reduce Medicare tax liabilities. It is essential, however, to adhere strictly to Internal Revenue Service guidelines when determining reasonable compensation.

Here is an example of Medicare tax liability for a licensed attorney earning a minimum fair market value salary as determined by the Internal Revenue Service:

$50,000 salary x 2.9% = $1,450 Medicare tax liability

This applies regardless of whether the licensed attorney shareholder receives $100,000, $250,000, or any other amount as shareholder distributions through shares of stock in the California Professional Law Corporation.

This approach requires planning and documentation, as non-compliance with reasonable compensation standards may lead to shareholder distributions being reclassified as wages, resulting in additional Medicare tax liabilities and penalties. Nonetheless, a $50,000 salary can be considered reasonable under Internal Revenue Service standards, regardless of the total net income of the California Professional Law Corporation.

Medicare Tax Liability Conclusion

When examining Medicare tax liability, attorney sole proprietors and attorney general partners of general partnerships are taxed on the entire net income of their legal practice. In contrast, a California Professional Law Corporation that chooses S Corporation taxation can bifurcate its income to pay a reasonable salary to a licensed attorney shareholder as an employee, which is subject to the Medicare tax, while distributing the remaining income to the licensed attorney shareholder through the shares of stock of the California Professional Law Corporation, which is not subject to the Medicare tax.

Based upon the examples above, a California Professional Law Corporation taxed as an S Corporation that pays a $50,000 fair market salary to a licensed attorney shareholder as an employee could save that licensed attorney shareholder $2,900 per year based on a $150,000 annual income or $7,250 per year based on a $300,000 annual income compared to the Medicare tax liability for a California attorney sole proprietor or attorney general partner of a general partnership.

Additional Medicare Liability

The Additional Medicare Tax, introduced under the Affordable Care Act, targets high-income earners with increased taxation. Unlike the standard Medicare tax, this additional levy applies only to individuals and couples who surpass specific income thresholds. Specifically, it imposes a 0.9% tax rate on wages and self-employment income exceeding these limits, affecting only the income that surpasses the threshold.

The threshold for the Additional Medicare Tax is $200,000 for single taxpayers, $250,000 for married couples filing jointly, and $125,000 for married individuals filing separately.

Additional Medicare Tax Liability for Sole Proprietors and General Partners

As attorney sole proprietors and attorney general partners in general partnerships, individuals bear the full burden of the Additional Medicare tax obligation on their entire net income in excess of the thresholds.

The following are some examples of Additional Medicare tax liability for a single licensed attorney with various net income:

$50,000 net income x 0.9% = $0 Additional Medicare tax liability (below threshold)

$150,000 net income x 0.9% = $0 Additional Medicare tax liability (below threshold)

$300,000 net income x 0.9% = $900 Additional Medicare tax liability ($100,000 above threshold)

The following are some examples of Additional Medicare tax liability for a married licensed attorney filing jointly with various net income:

$50,000 net income x 0.9% = $0 Additional Medicare tax liability (below threshold)

$150,000 net income x 0.9% = $0 Additional Medicare tax liability (below threshold)

$300,000 net income x 0.9% = $450 Additional Medicare tax liability ($50,000 above threshold)

The following are some examples of Additional Medicare tax liability for a married licensed attorney filing separately with various net income:

$50,000 net income x 0.9% = $0 Additional Medicare tax liability (below threshold)

$150,000 net income x 0.9% = $225 Additional Medicare tax liability ($25,000 above threshold)

$300,000 net income x 0.9% = $1,575 Additional Medicare tax liability ($175,000 above threshold)

Additional Medicare Tax Liability for California Professional Law Corporations Taxed as S Corporations

While the Additional Medicare tax applies to wages, including wages earned by licensed attorney shareholders involved in the day-to-day operations of a California Professional Law Corporation, the fair market value wages required by the Internal Revenue Service are unlikely to come close to the thresholds for the Additional Medicare tax, regardless of marital status or tax filing status, with proper tax planning as follows:

$50,000 salary x 0.9% = $0 Additional Medicare tax liability (below threshold)

Additional Medicare Tax Liability Conclusion

While not as large as the FICA and Medicare tax examples at the net income rates used as examples above, the Additional Medicare tax is not nominal and can become quite large for the owners of large practice groups or owners of legal practices with high net income.

Deductibility of Health Insurance Premiums and Other Fringe Benefits

Deducting health insurance premiums and other fringe benefits for licensed attorney shareholders is another consideration in tax planning when selecting a business entity for a California legal practice. This section will detail the tax implications and advantages of providing health insurance and other fringe benefits to licensed attorney shareholders and employees. By grasping these deductions, one can engage in more strategic financial planning, significantly affecting overall tax liabilities.

Deductibility of Health Insurance Premiums and Other Fringe Benefits for Sole Proprietors and General Partners

For attorney sole proprietors and attorney general partners of general partnerships, the ability to deduct health insurance premiums and other fringe benefits can offer a tax advantage. Sole proprietors can deduct the health insurance premiums they pay for themselves as an above-the-line deduction, thereby reducing their adjusted gross income.

This deduction is available even if the sole proprietorship does not show a profit, though it cannot surpass the net profit of the legal practice. It is important to remember that these deductions do not reduce Medicare or Social Security taxes. For attorney general partners in general partnerships, similar provisions apply if the premiums are paid by the general partnership and classified as guaranteed payments.

These deductions not only reduce taxable income but also serve as incentives within the tax code, encouraging smaller business structures to offer health-related benefits.

Deductibility of Health Insurance Premiums and Other Fringe Benefits for California Professional Law Corporations Taxed as S Corporations

For California Professional Law Corporations taxed as S Corporations, understanding the deductibility of health insurance premiums and other fringe benefits for licensed attorney shareholders is important to creating an effective tax strategy.

Shareholders who own more than 2% of the California Professional Law Corporation can deduct health insurance premiums and other fringe benefits for their benefit paid on their behalf by the California Professional Law Corporation, however, these premiums are treated as compensation to the licensed attorney shareholders and are reported as such on their W-2 forms, underlining their inclusion in taxable income.

Proper handling of these deductions ensures that the California Professional Law Corporation remains compliant with tax regulations.

Deductibility of Health Insurance Premiums and Other Fringe Benefits Conclusion

Grasping these deductions is crucial for selecting the right business structure and optimizing tax responsibilities. For sole proprietorships, general partnerships, and California Professional Law Corporations taxed as S Corporations, health insurance premiums can qualify as business expenses. However, licensed attorney shareholders of California Professional Law Corporations must include these premiums and other fringe benefits in their income tax calculations, although they are exempt from FICA and Medicare tax liabilities.

Additional Costs to Operating as a California Professional Law Corporation

California Franchise Tax Board Minimum Annual Franchise Tax

California Professional Law Corporations, when taxed as S Corporations, must pay the minimum annual franchise tax mandated by the California Franchise Tax Board. The minimum franchise tax is the greater amount between an annual $800 or 1.5% of net income.

Sole proprietorships and general partnerships are exempt from franchise taxation in California, allowing them to bypass the annual minimum tax. This exemption provides a slight financial benefit; however, the tax efficiency of California Professional Law Corporations far exceeds the California minimum franchise tax requirement.

Other Administrative Costs to Operate a California Professional Law Corporation

Operating a California Professional Law Corporation involves additional administrative costs beyond the minimum annual franchise tax compared to sole proprietorships and general partnerships.

For example, a California Professional Law Corporation will have expenses related to maintaining state and federal compliance for keeping its FinCEN Beneficial Ownership Information Report up to date, filing an annual statement of information, and the drafting of meeting minutes for its annual meetings of shareholders and its board of directors that sole proprietorships and unregistered general partnerships do not require.

For both general partnerships and California Professional Law Corporations, additional administrative costs for bookkeeping, legal consultation to ensure adherence to corporate governance requirements, and tax preparation are likely higher than equivalent costs for a sole proprietorship.

Sole proprietorships and general partnerships without employees will generally not incur payroll costs, but California Professional Law Corporations will require payroll services even if the licensed attorney shareholder is the only employee of the California Professional Law Corporation, which is an added expense. However, sole proprietorships and general partnerships with employees will incur equivalent payroll costs that are comparable to those of California Professional Law Corporations.

The additional financial obligations of a California Professional Law Corporation can add up to a few thousand dollars per year depending upon the costs of tax preparation and payroll services, but these costs are often outweighed by the tax benefits provided by a California Professional Law Corporation taxed as an S Corporation.

Conclusions About Tax Benefits

The additional costs associated with operation as a California Professional Law Corporation vary but are generally a few thousand dollars per year compared to a sole proprietorship or general partnership that does not pay an annual franchise tax to the California Franchise Tax Board and does not have employees requiring payroll. In addition, sole proprietorships may enjoy lower tax preparation costs than general partnerships or California Professional Law Corporations.

However, depending upon the net income of the professional practice, these additional expenses may be paid for by the FICA, Medicare, and Additional Medicare tax savings possible with a California Professional Law Corporation.

For $50,000 of allocated net income, a California attorney sole proprietor or attorney general partner would expect to pay $7,650 in self-employment taxes ($6,200 FICA + $1,450 Medicare), equivalent to that which would be paid by a licensed professional shareholder of a California Professional Law Corporation.

For $150,000 of allocated net income, a California attorney sole proprietor or attorney general partner would expect to pay $22,950 in self-employment taxes ($18,600 FICA + $4,350 Medicare), compared to $7,650 in payroll taxes (employee and employer contributions combined of ($6,200 FICA + $1,450 Medicare) for a $50,000 salary from a California Professional Law Corporation, a tax savings of $15,300.

For $300,000 of allocated net income, a California attorney sole proprietor or attorney general partner would expect to pay $30,506 in self-employment taxes ($20,906 FICA + $8,700 Medicare + $900 Additional Medicare), compared to $7,650 in payroll taxes (employee and employer contributions combined of ($6,200 FICA + $1,450 Medicare) for a $50,000 salary from a California Professional Law Corporation, a tax savings of $122,856.

Thus, for lower net income, say $50,000 or below, a California Professional Law Corporation will likely cost more in additional administrative expenses than the tax savings realized.

At around $60,000 of net income per year, the tax savings versus additional expense of operating a California legal practice as a California Professional Law Corporation starts to break even depending on the costs of the additional expenses incurred.

Above the $60,000 of net income per year, the tax savings begins to exceed the additional expense of operating a California legal practice as a California Professional Law Corporation, resulting in the licensed attorney shareholder keeping more of the net income earned after taxes.

The experienced corporate attorneys at San Diego Corporate Law are available to assist with the analysis of net income versus administrative expense budgeting when deciding whether or not a licensed attorney should form a California Professional Law Corporation or choose another business structure for a California legal practice.

Establishing a Business Structure for Anticipated Growth

Establishing a business structure conducive to anticipated growth involves selecting a formation that not only accommodates current operations but also facilitates future expansion.

For licensed attorneys foreseeing growth of their professional practice, choosing to start as a California Professional Law Corporation is advantageous because it allows these attorneys to establish their practice once, avoiding the establishment of a practice as a sole proprietorship or general partnership for a year or two before facing the need to establish the legal practice a second time to after net income grows and the self-employment tax burden becomes expensive.

Additionally, even when net income remains lower, the California Professional Law Corporation is still valuable to a licensed attorney because it provides legal protection by separating personal assets from business liabilities, a critical consideration for risk management.

If within the means of such a licensed attorney, the recommendation is to start with a California Professional Law Corporation formed as a part of starting the legal practice.

A Quick Note on LLCs and PLLCs

A licensed attorney may not use a foreign or California limited liability company (LLC), nor may a foreign professional limited liability company (PLLC) be used to practice law in California. Pursuant to California Corporations Code Section 17701.04(e):

“Nothing in this title shall be construed to permit a domestic or foreign limited liability company to render professional services, as defined in subdivision (a) of Section 13401 and in Section 13401.3, in this state.”

This comes as a surprise to many licensed attorneys, as professional limited liability companies (PLLCs) are commonly used to render professional services in other states.