Bills to rein in outside investment in law firms advance in California, Illinois
By David Thomas
Published on April 9, 2026.
State lawmakers in California, Illinois, are moving to prevent outside investment in law firms. California's State Assembly approved legislation that would prohibit corporate investors from interfering with or influencing a lawyer's professional judgment regarding litigation. The Illinois bill, which also limits lawyers' ability to share fees with out-of-state "alternative business structures," is awaiting a full vote before it can be considered by the state Senate. Critics argue that the bill is overly broad and could result in an unintentional ban on any form of litigation financing by law firms and administrative outsourcing. The bill's opponents argue that it appears unconstitutional as the Illinois Supreme Court has the exclusive authority to regulate the judiciary and the lawyers it licenses.
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