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Fee Sharing with Nonlawyers in Legal Practice

Concerning prohibiting certain compensation arrangements in the legal profession, and, in connection therewith, creating the "Colorado Legal Practice Integrity and Fee-sharing Prohibition Act".

HB26-1421 2026 Regular Session Signed into Law Courts & Judicial

Cost estimates

At the first note read
$0
FACT April 27, 2026
At the last note read
$0
FACT August 12, 2026
What it actually cost
not published
No Colorado source reports spending for one bill

Every figure here is an estimate by Legislative Council Staff on the date shown, about the version of the bill in front of them that day. It is not a cost.

The appropriation

The note states no appropriation is required.

An appropriation is money the legislature sets aside. It is not money spent.

The appropriation field, read from the note: No appropriation is required.

Bill 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.

FACT Bill summary by Colorado Legislative Council Staff, read 2026-09-23. Printed as published, word for word. Source: leg.colorado.gov (opens in a new tab)