IllinoisHB5487104th General Assembly (2025–2026)HouseWALLET

LAW FIRM OWNERSHIP

Sponsored By: Sponsor information unavailable

Signed by Governor

Summary

Amends the Attorney Act. Prohibits a private equity group, hedge fund, or any entity owned, operated, or controlled by a private equity group or hedge fund, including management services organizations, that is involved with a law firm or an attorney's practice from: (1) interfering with the professional judgment of attorneys in representing clients; (2) exercising control over or being delegated the power to own or determine the content of client records, select, hire, or terminate the employment of attorneys or allied legal staff in whole or in part based on competency or proficiency; or set competency or proficiency parameters for attorneys or allied legal staff; or (3) charging any fee to the attorney or law firm that is directly or indirectly based on the fees, revenues, or profits of the attorney or law firm. Prohibits an attorney from sharing legal fees directly or indirectly with an out-of-state alternative business structure unless: (1) the attorney is also licensed in the state in which the alternative business structure is approved; (2) the fees are compensation for providing legal services in that state; and (3) the law of that state is controlling under the Illinois Rules of Professional Conduct or a successor rule. Provides for the recovery of statutory damages, attorney's fees and costs, and injunctive or declaratory relief as a remedy for violation. Defines terms. Contains applicability provisions. Effective immediately.

judiciary - civilassignmentsjudiciary

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 0 benefits, 0 costs, 2 mixed.

Limits on out-of-state legal fee sharing

These rules cover Illinois lawyers and firms with under $300 million in yearly global legal-service revenue, or firms earning more than half their revenue from contingent fees in each of the prior three years. An Illinois lawyer can share fees with an out-of-state legal business only when the lawyer is licensed there, the fees pay for legal work done there, and that state’s law governs under Illinois’s professional-conduct rules. A court- or tribunal-supervised arrangement can qualify for an exception, including a common benefit fund in coordinated, consolidated, or multidistrict litigation. The court must oversee the fee allocation and find it fair, reasonable, and needed to administer justice. The Act took effect when it became law, and these rules apply only to contracts entered on or after that date.

New safeguards for law firm clients

These rules cover Illinois lawyers and firms with under $300 million in yearly global legal-service revenue. They also cover firms that earn more than half their revenue from contingent fees in each of the prior three years. The revenue tests count affiliated firms worldwide; an enforcement agency can ask a lawyer or firm to certify the figures under oath. Covered firms with a management-services agreement must disclose it and its important terms in client contracts. Nonlawyer-owned or controlled entities cannot direct lawyers, control client records or communications, make legal-staff hiring or firing decisions, or set staff work standards. Their contracts also cannot base fees on a firm’s revenue, block staff from competing after leaving, or stop them from commenting on specified issues; loans remain allowed when repayment does not depend on the firm’s finances. A violation can lead to professional discipline and client damages of $10,000 per violation or three times actual damages, whichever is greater, plus legal fees, costs, and court orders. The Act took effect when it became law, and these rules apply only to contracts entered on or after that date.

Sponsors & Cosponsors

Sponsors

There is no primary sponsor on record.

Cosponsors

  • Abdelnasser Rashid

    Democratic • House

  • Diane Blair-Sherlock

    Democratic • House

  • Emanuel "Chris" Welch

    Democratic • House

  • Jay Hoffman

    Democratic • House

  • Jennifer Gong-Gershowitz

    Democratic • House

  • Kevin John Olickal

    Democratic • House

  • Lilian Jiménez

    Democratic • House

  • Mary Beth Canty

    Democratic • House

  • Michael E. Hastings

    Democratic • Senate

  • Robert Peters

    Democratic • Senate

  • Suzanne M. Ness

    Democratic • House

  • Will Guzzardi

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 411 • No: 197

House vote • 5/31/2026

Senate Floor Amendment No. 2 House Concurs

Yes: 75 • No: 39 • Other: 1

House vote • 5/31/2026

Senate Floor Amendment No. 3 House Concurs

Yes: 75 • No: 39 • Other: 1

House vote • 5/31/2026

Senate Floor Amendment No. 2 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee;

Yes: 13 • No: 7

House vote • 5/31/2026

Senate Floor Amendment No. 3 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee;

Yes: 13 • No: 7

House vote • 5/31/2026

Senate Committee Amendment No. 1 House Concurs

Yes: 75 • No: 39 • Other: 1

House vote • 5/31/2026

Senate Committee Amendment No. 1 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee;

Yes: 13 • No: 7

Senate vote • 5/30/2026

Third Reading - Passed;

Yes: 39 • No: 19

Senate vote • 5/29/2026

Senate Floor Amendment No. 2 Recommend Do Adopt Judiciary;

Yes: 5 • No: 3

Senate vote • 5/6/2026

Do Pass as Amended Judiciary;

Yes: 8 • No: 1

House vote • 4/9/2026

Third Reading - Short Debate - Passed

Yes: 70 • No: 36 • Other: 1

House vote • 4/8/2026

House Floor Amendment No. 2 Recommends Be Adopted Rules Committee;

Yes: 5 • No: 0

House vote • 3/25/2026

Do Pass as Amended / Short Debate Judiciary - Civil Committee;

Yes: 20 • No: 0

Bill Text

  • Engrossed

  • Enrolled

  • House Amendment 1

  • House Amendment 2

  • Introduced

  • Senate Amendment 1

  • Senate Amendment 2

  • Senate Amendment 3

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