Illinois Fee-Sharing Bill Threatens to Ban Litigation Finance

An Illinois bill targeting law firms backed by outside investors could put strict new limits on litigation finance deals in the state.

The measure (HB5487), approved by a House judiciary committee on Wednesday, would ban law firms from sharing fees with firms owned or operated by non-lawyers, including private equity and hedge funds. The bill also appears to restrict litigation funders by blocking investors from charging fees to law firms directly or indirectly based on the fees, revenues, or profits they generate.

“Once a percentage of either a client’s share or a lawyer’s share gets shared with a ...