HB 1421: Fee Sharing with Nonlawyers in Legal Practice

Official summary

Abstract published by the legislature (via Open States). Text as published by the legislature; reproduced verbatim.

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; andCompensating 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; andA 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.)

Sponsors

Sponsors by party (alphabetical): Democratic 24 · Republican 2

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. June 4, 2026Governor Signed
2. June 3, 2026Signed by the Speaker of the House
3. June 3, 2026Signed by the President of the Senate
4. June 3, 2026Sent to the Governor
5. May 12, 2026House Considered Senate Amendments - Result was to Concur - Repass
6. May 11, 2026Senate Third Reading Passed - No Amendments
7. May 8, 2026Senate Second Reading Special Order - Passed with Amendments - Committee, Floor
8. May 6, 2026Senate Committee on Judiciary Refer Amended to Senate Committee of the Whole
9. May 4, 2026Introduced In Senate - Assigned to Judiciary
10. May 1, 2026House Third Reading Passed - No Amendments
11. April 30, 2026House Second Reading Special Order - Passed with Amendments - Committee, Floor
12. April 29, 2026House Committee on Judiciary Refer Amended to House Committee of the Whole

Showing 12 most recent of 13 actions. Full history