California Law Sets Up New Contingency Fee-Sharing Roadblock

Legal ethics attorney Trisha Rich was quoted in a Reuters article about California's new law restricting contingency fee-sharing with out-of-state alternative business structures (ABS) where non-lawyers have ownership or decision-making authority. The law will apply to agreements enter into after Jan. 1, 2026, until 2030, keeping much of the California market off-limits to ABS contingency arrangements and raising strategic questions for investors and ABS firms operating nationally. Ms. Rich noted the broader implications beyond California if other states follow suit.

"If other jurisdictions start adopting these laws, it's going to make this sort of structure less attractive to both investors and ABS firms," she said.

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