Investor-backed legal funders can't control law firms' litigation decisions
A business set up to raise or manage capital that invests in a law practice commits unauthorized practice of law if it controls case decisions, and contracts allowing that are void. Ordinary nonrecourse litigation funding stays legal if it meets set limits.
Who it affects
Law firms and companies that invest in or fund them
When
This law takes effect on January 1, 2027. California laws take effect on January 1 of the year after they are signed, unless the law says otherwise.
- : Signed into law
- : This law takes effect
Official text
California AB 2305: Attorneys: corporate legal funders.
On California Legislative Information. The official text is what counts; read it before you act.
Not legal advice. Plain-English summaries to help you find what changes and when. Not legal advice: read the official text, and ask a lawyer about your situation.