Illinois has enacted Public Act 104-0801, introducing statutory limits on the role of entities owned, operated or controlled wholly or partly by people who are not licensed attorneys, including management services organisations. Such entities may not interfere with lawyers’ professional judgment, control the disclosure of client records or attorney-client communications, or exercise specified powers over the selection, employment and competence standards of attorneys and allied legal staff.
The Act also prohibits covered entities from charging law firms fees calculated directly or indirectly by reference to legal fees, revenue or profits, while preserving ordinary loan repayment arrangements that are not contingent on financial performance. Law firms using a management services organisation must disclose the arrangement and its terms in their attorney-client contracts. The provisions apply to Illinois firms below the Act’s revenue threshold and to specified contingency-fee practices, and they restrict fee sharing with out-of-state alternative business structures unless stated licensing and choice-of-law conditions are satisfied. The Act took effect on 7 August 2026.