IllinoisIllinois law limits outside control of some law firms
Illinois law sets rules for some lawyers and law firms working with outside management groups, including what they tell clients and which fee-sharing arrangements they can use.
What it does
Covered lawyers and law firms must tell clients in their contracts when they have an agreement with a management group and explain its important terms.
Outside owners and managers cannot interfere with lawyers’ judgment or control key client, staffing, or work decisions. They also cannot tie their fees to the practice’s income, and contracts cannot bar certain speech or competition after a lawyer leaves.
Illinois lawyers can share fees with an out-of-state legal business only if licensing, work, and state-law conditions are met. Violations may bring discipline, damages, legal costs, or a court order, with an exception for court-approved fee sharing.
Argument forClients could see who helps manage their lawyer’s practice, while limits on outside control may help protect client information and lawyers’ judgment.
Argument againstThe damages and legal costs could be a heavy burden for a lawyer or service organization found responsible, even when a client’s actual losses are lower.
More detail
Covered lawyers and law firms must disclose certain management agreements in client contracts. The rule covers an attorney or law firm subject to this section that has an agreement with an organization providing management or administrative support in exchange for firm assets or payments. The contract must disclose that the lawyer or firm has the agreement and explain its material terms. This applies to contracts entered into on or after the law’s effective date.
Outside owners and managers involved with covered law practices may not interfere with lawyers’ judgment or control specified parts of the practice. These rules cover entities owned, run, or controlled in whole or in part by people who are not lawyers when they are involved with a covered lawyer’s or law firm’s practice. They may not control client records or communications, hiring or firing lawyers or legal staff, or work standards for those people. They may not charge fees based directly or indirectly on the practice’s fees, revenue, or profits. This does not bar a loan repayment when the amount owed is not based on the borrower’s financial performance. A management contract may not stop a lawyer or legal staff member from competing after leaving, or from speaking about service quality, professional or ethical problems, or revenue strategies. These rules apply to contracts entered into on or after the law’s effective date.
Illinois lawyers may not share legal fees with an out-of-state alternative legal business unless specified conditions are met; violations may lead to discipline and other remedies. The fee-sharing rule applies to an attorney licensed or authorized to practice in Illinois. The section applies only to an attorney or law firm with annual global legal-service revenue below $300 million and with more than half of its revenue from qualifying contingency fees in each of the preceding three calendar years. The lawyer must also be licensed in the other state, the fees must pay for legal work there, and that state’s law must govern under the professional conduct rule. A violation may lead to professional discipline. The lawyer, management organization, or alternative legal business may face damages of $10,000 per violation or three times the client’s actual damages, whichever is greater, plus legal fees and costs; a court may also order other relief. The section does not apply to fee-sharing arrangements approved and overseen by a court or tribunal that finds the allocation fair, reasonable, and needed for the administration of justice. The section applies to contracts entered into on or after the law’s effective date.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Aug 7Public Act . . . . . . . . . 104-0801Latest
- Aug 7Effective Date August 7, 2026
- Aug 7Governor J. B. Pritzker ApprovedBecame Law
- Jun 26Sent to the GovernorTo Governor
- May 31Passed Both Houses
- Vote recorded Concurrence, Amendment 3. Result: pass.Lower
- Vote recorded Concurrence, Amendment 2. Result: pass.Lower
- Vote recorded Concurrence, Amendment 1. Result: pass.Lower
- Vote recorded Do Pass, Amendment 3. Result: pass.Lower
- Vote recorded Do Pass, Amendment 2. Result: pass.Lower
- Vote recorded Do Pass, Amendment 1. Result: pass.Lower
- May 31House Concurs
- May 31Senate Floor Amendment No. 3 House Concurs 075-039-001
- May 31Senate Floor Amendment No. 2 House Concurs 075-039-001
- May 31Senate Committee Amendment No. 1 House Concurs 075-039-001
- May 31Senate Floor Amendment No. 3 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee; 013-007-000
- May 31Senate Floor Amendment No. 2 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee; 013-007-000
- May 31Senate Committee Amendment No. 1 Motion to Concur Recommends Be Adopted Judiciary - Civil Committee; 013-007-000
- May 30Senate Floor Amendment No. 3 Motion to Concur Rules Referred to Judiciary - Civil Committee
- Vote recorded Third Reading. Result: pass.Upper
- May 30Senate Floor Amendment No. 2 Motion to Concur Rules Referred to Judiciary - Civil Committee
- May 30Senate Committee Amendment No. 1 Motion to Concur Rules Referred to Judiciary - Civil Committee
- May 30Senate Floor Amendment No. 3 Motion to Concur Referred to Rules Committee
- May 30Senate Floor Amendment No. 2 Motion to Concur Referred to Rules Committee
- May 30Senate Committee Amendment No. 1 Motion to Concur Referred to Rules Committee
- May 30Senate Floor Amendment No. 3 Motion Filed Concur Rep. Jennifer Gong-Gershowitz
- May 30Senate Floor Amendment No. 2 Motion Filed Concur Rep. Jennifer Gong-Gershowitz
- May 30Senate Committee Amendment No. 1 Motion Filed Concur Rep. Jennifer Gong-Gershowitz
- May 30Placed on Calendar Order of Concurrence Senate Amendment(s) 1, 2, 3
- May 30Arrived in HouseMinor
- May 30Third Reading - Passed; 039-019-000Passed Senate
- May 30Placed on Calendar Order of 3rd Reading
- May 30Senate Floor Amendment No. 3 Adopted; HastingsMajor
- May 30Senate Floor Amendment No. 2 Adopted; HastingsMajor
- May 30Recalled to Second ReadingMinor
- May 30Senate Floor Amendment No. 3 Be Approved for Consideration Assignments
- May 30Senate Floor Amendment No. 3 Referred to Assignments
- May 30Senate Floor Amendment No. 3 Filed with Secretary by Sen. Michael E. HastingsMinor
- May 29Added as Alternate Chief Co-Sponsor Sen. Robert Peters
- Vote recorded Do Pass, Amendment 2. Result: pass.Upper
- May 29Senate Floor Amendment No. 2 Recommend Do Adopt Judiciary; 005-003-000
- May 28Senate Floor Amendment No. 2 Assignments Refers to Judiciary
- May 28Senate Floor Amendment No. 2 Referred to Assignments
- May 28Senate Floor Amendment No. 2 Filed with Secretary by Sen. Michael E. HastingsMinor
- May 22Rule 2-10 Third Reading Deadline Established As May 31, 2026
- May 14Placed on Calendar Order of 3rd Reading May 18, 2026
- May 14Second ReadingMinor
- May 6Placed on Calendar Order of 2nd Reading May 7, 2026Minor
- Vote recorded Do Pass, Amendment 1. Result: pass.Upper
- Vote recorded Do Pass. Result: pass.Upper
- May 6Do Pass as Amended Judiciary; 008-001-000
- May 6Senate Committee Amendment No. 1 AdoptedMajor
- May 6Senate Committee Amendment No. 1 Assignments Refers to Judiciary
- May 5Senate Committee Amendment No. 1 Referred to Assignments
- May 5Senate Committee Amendment No. 1 Filed with Secretary by Sen. Michael E. HastingsMinor
- Apr 29Postponed - Judiciary
- Apr 22Assigned to JudiciaryMinor
- Apr 14Referred to Assignments
- Apr 14First ReadingMinor
- Apr 14Chief Senate Sponsor Sen. Michael E. Hastings
- Apr 14Placed on Calendar Order of First ReadingMinor
- Apr 14Arrive in SenateMinor
- Apr 9Third Reading - Short Debate - Passed 070-036-001Passed House
- Vote recorded Third Reading. Result: pass.Lower
- Apr 9Placed on Calendar Order of 3rd Reading - Short Debate
- Apr 9House Floor Amendment No. 2 AdoptedMajor
- Apr 9Recalled to Second Reading - Short DebateMinor
- Apr 9Added Co-Sponsor Rep. Jay Hoffman
- Apr 8Added Chief Co-Sponsor Rep. Mary Beth Canty
- Apr 8Added Co-Sponsor Rep. Abdelnasser Rashid
- Apr 8House Floor Amendment No. 2 Recommends Be Adopted Rules Committee; 005-000-000Minor
- Apr 7House Floor Amendment No. 2 Referred to Rules Committee
- Apr 7House Floor Amendment No. 2 Filed with Clerk by Rep. Jennifer Gong-GershowitzMinor
- Apr 7Added Co-Sponsor Rep. Kevin John Olickal
- Apr 7Added Co-Sponsor Rep. Diane Blair-Sherlock
- Apr 7Added Co-Sponsor Rep. Lilian Jiménez
- Apr 7Added Co-Sponsor Rep. Will Guzzardi
- Apr 7Added Co-Sponsor Rep. Suzanne M. Ness
- Apr 7Placed on Calendar Order of 3rd Reading - Short Debate
- Apr 7Second Reading - Short DebateMinor
- Apr 7Added Chief Co-Sponsor Rep. Emanuel "Chris" Welch
- Mar 25Placed on Calendar 2nd Reading - Short DebateMinor
- Vote recorded Do Pass. Result: pass.Lower
- Mar 25Do Pass as Amended / Short Debate Judiciary - Civil Committee; 020-000-000
- Mar 25House Committee Amendment No. 1 Adopted in Judiciary - Civil Committee; by Voice VoteMajor
- Mar 19House Committee Amendment No. 1 Rules Refers to Judiciary - Civil Committee
- Mar 18House Committee Amendment No. 1 Referred to Rules Committee
- Mar 18House Committee Amendment No. 1 Filed with Clerk by Rep. Jennifer Gong-GershowitzMinor
- Mar 4Assigned to Judiciary - Civil CommitteeMinor
- Feb 13Referred to Rules Committee
- Feb 13First ReadingMinor
- Feb 6Filed with the Clerk by Rep. Jennifer Gong-GershowitzIntroduced
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