Between 1859 and 1865 Harry Gem, a solicitor and his friend Augurio Perera developed a game that combined elements of racquets and the Basque ball game pelota, which they played on Perera's croquet lawn in Birmingham, England, United Kingdom. In 1872, along with two local doctors, they founded the world's first tennis club on Avenue Road, Leamington Spa. This is where "lawn tennis" is used as a name of activity by a club for the first time. After Leamington, the second club to take up the game of lawn tennis appears to have been the Edgbaston Archery and Croquet Society, also in Birmingham.
To determine who serves first, you flip a coin or (more likely) spin a racket. Whoever wins the toss gets to decide one of four things: that she wants to serve first, that she wants to receive first, which side of the court she wants to start on (in which case, the opponent chooses who serves first), or that she wants to leave the choices up to her opponent.