California Bans Contingent Fee Sharing With ‘Alternative’ Firms

AB 931, the California Consumer Legal Funding Act, has been signed into law, banning California attorneys and firms from sharing contingency fees with “out-of-state alternative business structures,” or law firms owned by non-lawyers. More from Bloomberg Law.

The law, which will only apply to contracts entered into on or after January 1, 2026, also includes caps on funding charges that cannot accrue beyond 36 months, mandatory plain-language contracts with full itemization of charges and clear repayment schedules, a five-business-day cancellation right without penalty, and a clear prohibition against funding companies influencing legal strategy or settlement decisions. More from Rockpoint Legal Funding.