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House passes bill to restrict certain non‑lawyer profit arrangements in law firms after heated floor debate
Summary
House Bill 14‑21 passed the Colorado House after committee amendments and extended floor debate. Sponsors say the measure closes private‑equity ‘‘backdoor’’ fee‑sharing; opponents warned it could harm rural access to legal services and raise separation‑of‑powers concerns. Amendment L008 was adopted; the bill passed on the floor.
The Colorado House on April 30 passed House Bill 14‑21, legislation intended to prohibit certain compensation arrangements and fee‑sharing structures that sponsors say let non‑lawyer investors exert control over legal strategy.
Sponsor Representative Mabry told the chamber the bill is designed "to make sure that when you hire a lawyer that that lawyer works for you and not an investor," and that committee amendments were added to avoid unintended consequences for longstanding debt‑collection practices, clarify definitions of legal services, permit fixed‑fee arrangements and carve out nonprofit law practices. On the floor, members adopted amendment L008 (calling it L8 in the well) before moving to the bill.
Opponents, most prominently Representative Soper, warned the bill could harm rural access to legal services and spur consolidation by large firms. Soper argued that some counties have as few as three attorneys and said the change "could create a legal desert" in rural areas. Representative Johnson and Representative Kelsey raised procedural and substantive objections, including short notice for extensive amendments and questions about separation of powers; Representative Espinosa and others cited the need to exhaust remedies such as seeking a Supreme Court opinion on how professional‑conduct rules apply across states.
Sponsors and the minority leader characterized the final package as the product of stakeholder engagement and technical fixes. The bill includes a carve‑out for nonprofits and clarifications intended to preserve routine business practices like fixed‑fee arrangements and limited litigation funding for attorney tasks. The House recorded the committee report and proceeding and ultimately passed the bill on the floor (the formal floor tally was announced as "the ayes have it" in the transcript). This measure moves next in the legislative process per the calendar rules.
Because the transcript records extensive floor debate but not a final numeric tally for the passage line, reporters should treat the outcome as passage on the floor as recorded in the House journal.
