LLC's and corporations certainly provide the comfort level that any investors or business partners will want in order to invest in your firm.  They are understood and familiar business entities that most people can understand.

  There are disadvantages too.  As noted, they are seperate legal entities from yourself, so you need to do another tier of bookkeeping to maintain such and entity.  You  take a different type of responsibility for ensuring that such books and records are kept for an organization which can become a liability in and of itself.  Quarterly tax filings may be necessary as well, increasing the burden in time for such bookkeeping.  Furthermore, while your iling costs of being a contractor or sole proprietor now are very low, the cost of annual filings in state records can be significant, especially for corporations.  You dont currently need to have an annual shareholder meeting, with minutes and all that run-around, whereas you'll need to keep meeting minutes, post notices and do all those corporate things.  
 

  Will this raise costs to your clients?  Certainly. 

  Alternatively, stay a small business, get good E&O insurance and protect your personal assets (car, home etc...) by setting up a trust(s).  Keep a seperate business account at a local bank and use a different financial institution for your personal checking. 

  Otherwise, an irrevocable business trust avoids the filing costs while providing the same legal indemnity against personal liability as does a corporation.  They are underused and good alternatives for "firewalling" your property against loss / liability.

  Just a few alternatives to the status quo presented here otherwise.