Illinois MSO bill could become a template for regulating private capital in law firms

Illinois lawmakers passed legislation aimed at curbing private-equity influence in law firms through MSO structures. The bill, which applies to firms below $300 million in annual revenue, would bar non-lawyer-owned entities from interfering with lawyer judgment, controlling hiring decisions or charging fees linked to firm fees, revenue or profits; similar legislation is under consideration in California and Colorado. The bill may not stop MSO deals, but it could define the guardrails. For firms, investors and advisers, the likely regulatory pattern is clearer separation between legal judgment and business services rather than a full ban on outside capital.

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