firm

A firm is a business organization that produces goods or provides services. The term is commonly used for professional-service entities such as law firms, accounting firms, consulting practices, and architectural studios, but it can refer to any legally recognized business engaged in commercial activity. Firms may be organized as sole proprietorships, partnerships, corporations, or limited liability companies, depending on jurisdiction and goals.

The word “firm” originates from the Latin firma, meaning firmness or stability, and in English has long carried connotations of reliability and strength. In business use, these associations reflect expectations of steadiness, persistency, and capability.

Structure and liability vary by form. Ownership and control can be in the hands of partners, shareholders, or members. General partnerships and some professional firms expose owners to personal liability, while limited liability structures protect personal assets. Governance arrangements range from simple partner-led models to formal boards and executive management teams.

Professional-service firms are a notable category where the term is especially common. Such firms often emphasize specialized expertise, collaborative work, and profit-sharing among partners or owners. They may operate with multiple offices, integrated practice areas, and standardized processes to manage client engagements and workflows.

Economic role and metrics. Firms engage in commercial activity to generate revenue and profit, manage costs, and allocate resources. Performance is commonly assessed through indicators like utilization, realization, revenue per professional, client retention, and profitability. The size and scope of a firm can range from small local practices to multinational organizations.