On June 4, 2026, Colorado enacted the Colorado Legal Practice Integrity and Fee Sharing Prohibition Act. Absent a referendum petition, the law is scheduled to take effect on August 12, 2026, and applies to conduct occurring, and contracts or agreements entered into or renewed, on or after the effective date.

Colorado already has a court adopted professional conduct rule restricting lawyers from sharing legal fees with nonlawyers and from permitting nonlawyers to interfere with a lawyer’s independent professional judgment. The new statute is therefore not simply a policy statement against private equity in law. It is a legislative effort to codify and expand restrictions that have traditionally been administered by the judiciary through attorney ethics rules.

That distinction is important. Once a state legislature begins defining permissible law firm ownership, revenue sharing, management services compensation, and professional independence by statute, the issue becomes more than a debate over private equity. It becomes a separation of powers question, which I recently addressed in my Law360 article, Keeping Private Equity Out of Law Is Job for Courts, Not Capitols.

For companies in the debt relief space that rely on attorney based service structures, law firm support arrangements, managed services organizations, or alternative business structures approved in other jurisdictions, Colorado’s statute is a reminder that those approvals may not answer the question in another state. These arrangements should be reviewed on a state by state basis, especially where legal services may involve Colorado consumers or Colorado legal rights.