This amendment clarifies that the bill does not stop people who own or are assigned a legal claim from collecting money owed to them, as long as they do not control how lawyers handle their cases.
Colorado2026Enacted
HB26-1421
Colorado Legal Practice Integrity and Fee-Sharing Prohibition Act
Last scannedAug 24, 2026, 8:22 AM
In one sentence
This law stops lawyers from sharing legal fees with nonlawyers or working in business structures owned by nonlawyers when providing services related to Colorado rights.
What it does
- Prohibits giving any part of legal fees or revenues to a nonlawyer or an organization that shares profits and is controlled by nonlawyers.
- Bans entering into financial deals with business structures owned by nonlawyers if those deals relate to providing legal services.
- Stops lawyers from forming companies with nonlawyers if the company provides any legal services.
- Prohibits practicing in a professional company where a nonlawyer owns an interest or can direct a lawyer's judgment.
- Allows paying staff for office work only if that pay is not based on case outcomes, settlements, or percentages of fees.
Who it affects
- Lawyers licensed in any U.S. state who provide legal services related to rights arising in Colorado.
- Law firms operating within or serving clients with connections to Colorado.
- Nonlawyer business owners attempting to share profits from legal work.
Limits and unknowns
- The law does not stop people from collecting debts or enforcing claims if they follow existing rules.
- Law firms that sue for breaking this rule cannot get money damages (economic damages), only other types of relief like stopping the behavior.
Plain language
Terms to know
- Alternative Business Structure
- An organization owned or controlled by nonlawyers that shares in legal fees, profits, or controls how lawyers provide services.
- Legal Fee
- Any money paid for legal help, including hourly rates, flat fees, and portions of settlements won for clients.
Official record
Sources
Official summary
The act prohibits a lawyer or law firm, in connection with providing legal services concerning a legal right arising in whole or in part in Colorado (legal services), from: Providing any portion of legal fees or revenues to a nonlawyer or an organization that economically participates in the provision of legal services or shares in the profits of legal fees or revenues and is owned or controlled by one or more nonlawyers (alternative business structure); Entering into a financial or contractual arrangement with an alternative business structure, which arrangement relates to providing legal services; Forming an entity recognized under Colorado law with a nonlawyer if any of the activities of the entity consist of providing legal services; Practicing with or in the form of a professional company authorized to provide legal services if a nonlawyer owns an interest in the company or a nonlawyer has the right to direct the judgment of a lawyer; and Compensating a person that provides administrative or nonlegal business services to a lawyer or law firm unless the compensation is not contingent upon a percentage of legal fees or revenues and not determined by reference to recoveries, settlements, or other case outcomes. The act exempts certain arrangements, activities, and organizations from the prohibitions in the act. The act also creates a private right of action that allows the following persons to enforce the prohibitions in the act: A person to whom a lawyer or law firm provides legal services that are alleged to be in violation of the act; and A law firm doing substantial business in Colorado that has suffered or may suffer a loss in revenue due to a violation of the act by another law firm, which law firm doing substantial business is not eligible for recovery of economic damages. A person may seek economic damages, injunctive relief, declaratory relief, and any other relief the circumstances may require for violations of the act. If a court determines that a lawyer, law firm, or other person has violated the act, the court must order the funds received or paid in violation of the act to be disgorged and paid to the state treasurer, except to the extent that the funds are paid as economic damages to a plaintiff. The state treasurer must deposit any disgorged funds into the general fund. The act repeals on September 1, 2029. (Note: This summary applies to this bill as enacted.)
Official activity
Bill history
- Governor SignedGovernor
- Sent to the GovernorGovernor
- Signed by the President of the SenateSenate
- Signed by the Speaker of the HouseHouse
- House Considered Senate Amendments - Result was to Concur - RepassHouse
- Senate Third Reading Passed - No AmendmentsSenate
- Senate Second Reading Special Order - Passed with Amendments - Committee, FloorSenate
- Senate Committee on Judiciary Refer Amended to Senate Committee of the WholeSenate
- Introduced In Senate - Assigned to JudiciarySenate
- House Third Reading Passed - No AmendmentsHouse
- House Second Reading Special Order - Passed with Amendments - Committee, FloorHouse
- House Committee on Judiciary Refer Amended to House Committee of the WholeHouse
- Introduced In House - Assigned to JudiciaryHouse
Changes
Amendments
10 stored
This amendment replaces a short definition of legal services with a detailed list and changes the rule about who is allowed to share fees.
This amendment adds specific exceptions to the bill so that lawyers can still use certain types of fixed-fee contracts and clients can keep their rights to direct their legal representation.
This amendment adds specific rules allowing lawyers to accept certain types of funding from non-lawyers for individual cases and permits them to handle federal administrative matters, while setting a date when these new rules will expire.
This amendment updates the bill's language to clarify that it regulates law firms, fee sharing with nonlawyers, and services provided to third parties or clients.
This amendment creates a special exception that allows lawyers to share fees with nonprofit organizations without breaking the rules against sharing money with non-lawyers.
This amendment changes the bill's language to specifically refer to 'economic outcome' instead of just 'outcome'.
This amendment removes several specific sections from the bill that dealt with funding and penalties, but it does not explain what new rules replace them.
This amendment sets a specific start date for the new law in August 2026 and allows voters to delay it if they sign a petition.
This amendment adds a rule that the new laws about lawyers sharing fees with non-lawyers will stop working on September 1, 2029.