Illinois Fee-Sharing Bill Threatens to Ban Litigation Finance

Legal ethics attorney Trisha Rich was interviewed by Bloomberg Law about an Illinois bill that would ban law firms from sharing fees with organizations owned or operated by nonlawyers, including private equity and hedge funds. House Bill (HB) 5487, approved by an Illinois House judiciary committee on March 25, 2026, targets law firms backed by outside investors or involved with management service organizations (MSOs) or alternative business structures (ABS). Ms. Rich observed that the bill could effectively prohibit litigation finance in the state, adding that its language is so broad that it could be interpreted to cover routine vendors such as document management services, e-discovery platforms and even court reporters.

"This would just have absolutely massive implications for the industries that service the profession of law," she commented. "There's absolutely no limiting principles in this bill that would allow ordinary law firm operations to continue without violating it."

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Ms. Rich previously co-authored a Holland & Knight alert on this topic.