New Illinois MSO Legal Industry Law May Be Ripe for a Challenge, Experts Say

Legal Services Transactions Team Co-Leader Trisha Rich was quoted in The American Lawyer about a potential constitutional challenge to Illinois House Bill (HB) 5487, a new law regulating outside investment and management services organization (MSO) relationships in the state's legal industry. The legislation restricts nonlawyer involvement in attorneys' professional judgment and certain business decisions, while also ending fee-sharing between Illinois lawyers and out-of-state alternative business structures (ABS). Trisha explained that the law could conflict with the state's inherent powers doctrine, which gives the Illinois Supreme Court authority over the regulation of lawyers and the practice of law. She noted that several clients are considering legal challenges, positioning Illinois as a possible test case for the balance among legislative authority, judicial oversight and new sources of capital in the legal services market.

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