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Assembly passes AB 2305 barring corporate investors from directing litigation decisions
Summary
The Assembly approved AB 2305 to prohibit private equity and similar investors from directing or influencing litigation strategy and decisions, aimed at keeping client interests with licensed attorneys rather than investor return expectations.
The California State Assembly passed AB 2305 on Jan. 20, 2026, a bill that seeks to prohibit corporate investors — including private equity firms and hedge funds — from directing or influencing litigation decisions in law firms. Assemblymember Carlra presented the bill, saying alternative business structures and creative accounting have created pathways for nonlawyer…
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