HB26-1421, also known as the “Colorado Legal Practice Integrity and Fee-sharing Prohibition Act,” passed the House on Tuesday, May 12 and now awaits the Governor’s signature. The legislation prohibits lawyers from sharing legal fees, revenues, or profits with non-lawyers or organizations owned/controlled by non-lawyers. It targets private equity, alternative business structures (ABS), and management service organizations (MSOs), with the intent of preventing non-lawyers from influencing legal decisions.
The legislation was a bi-partisan effort, with Representative Javier Mabrey (D-HD1) and House Minority Leader Jarvis Caldwell (R-HD20) leading the effort from the House and Senator Lindsey Daugherty (D-SD19) and Senate Assistant Minority Leader Lisa Frizzel (R-SD2) in the Senate. The legislation had support from both the Colorado Chamber of Commerce and the Colorado Trial Lawyers Association.
“Colorado Trial Lawyers Association members are committed to upholding the integrity of the legal profession and serving the best interests of their clients,” said Executive Director of Colorado Trial Lawyers Association Julie Whitacre. “Our members are bound by core duties of loyalty, confidentiality, and independent judgment, and they take those responsibilities seriously. We’re grateful to the bill sponsors for their leadership in protecting Coloradans and reinforcing a simple principle: legal decisions should be guided by Colorado lawyers, grounded in what is right for their clients, and focused on the pursuit of justice.”
The bill creates a private right of action for clients of a law firm who is alleged to have violated the Act or by a law firm that suffers an economic loss as a result of another law firm who has alleged to have violated the Act. Read the entire legislation here.