Amends the Attorney Act. Prohibits a private equity group, hedge fund, or any entity owned, operated, or controlled by a private equity group or hedge fund, including management services organizations, that is involved with a law firm or an attorney's practice from: (1) interfering with the professional judgment of attorneys in representing clients; (2) exercising control over or being delegated the power to own or determine the content of client records, select, hire, or terminate the employment of attorneys or allied legal staff in whole or in part based on competency or proficiency; or set competency or proficiency parameters for attorneys or allied legal staff; or (3) charging any fee to the attorney or law firm that is directly or indirectly based on the fees, revenues, or profits of the attorney or law firm. Prohibits an attorney from sharing legal fees directly or indirectly with an out-of-state alternative business structure unless: (1) the attorney is also licensed in the state in which the alternative business structure is approved; (2) the fees are compensation for providing legal services in that state; and (3) the law of that state is controlling under the Illinois Rules of Professional Conduct or a successor rule. Provides for the recovery of statutory damages, attorney's fees and costs, and injunctive or declaratory relief as a remedy for violation. Defines terms. Contains applicability provisions. Effective immediately.
House Committee Amendment No. 1: Replaces everything after the enacting clause. Reinserts provisions in the bill as introduced with these changes. Deletes references to "hedge fund" and "private equity group" and makes the Act applicable to "an entity owned, operated, or controlled in whole or in part by persons not licensed as attorneys". Prohibits such an entity from accessing, owning, or determining the content of client records or accessing any attorney-client communications. Makes conforming changes. Effective immediately.
House Floor Amendment No. 2: Provides that an attorney who violates the provisions may be subject to statutory damages of $10,000 per violation or 3 (rather than 25) times the actual damages incurred by the client, whichever is greater.
Senate Committee Amendment No. 1: Replaces everything after the enacting clause. Reinserts the provisions of the bill with the following changes. Defines "allied legal staff" to mean a person or persons who are not licensed as attorneys who access attorney-client and work-product privileged information in their work to include, but not be limited to, paralegals and legal assistants. Provides that any attorney or law firm that is party to an agreement with a management services organization must disclose in its attorney-client contracts that the attorney or law firm is party to such an agreement and the terms of the agreement. Provides that the provisions of the Act apply to all Illinois attorneys and law firms that represent clients in whole or in part on a contingent fee basis. Prohibits an entity owned, operated, or controlled in whole or in part by persons not licensed as attorneys, including management services organizations, that is involved with a law firm or lawyer's practice may not charge any fee to the attorney or law firm that is directly or indirectly based on the attorney's fees, revenues, or profits of the attorney or law firm. Provides that this prohibition does not apply to the repayment of a loan or extension of credit that the attorney or law firm is obligated to repay if the amount of the borrower's obligation is not contingent upon or calculated on the basis of the borrower's attorney's fees, revenues, profits, or other financial performance. Effective immediately.
Senate Floor Amendment No. 2: Replaces everything after the enacting clause. Reinserts the provisions of the bill as amended by Senate Amendment No. 1 with the following changes. Specifies that the provisions added by the amendatory Act apply only to (i) a licensed attorney or law firm operating in Illinois with annual global revenue from that licensed attorney's or law firm's provision of legal services that is less than $300,000,000 or (ii) a licensed attorney or law firm that regularly represents clients on a contingent fee basis, where the fee is based on the resolution or outcome of actual or threatened private litigation, and that has derived more than 50% of the attorney's or law firm's revenues from the contingent fee arrangements in each of the previous 3 calendar years. Provides that, upon request of the Attorney Registration and Disciplinary Commission or other governmental authority or agency charged with administering or enforcing the provisions, or upon order of a court of competent jurisdiction, a licensed attorney or law firm shall be permitted to provide a self-certification attesting, under oath, to certain facts. Makes other changes effective immediately.
Senate Floor Amendment No. 3: Provides that an entity that is owned, operated, or controlled in whole or part by persons not licensed as attorneys and that is involved with a law firm's or attorney's practice must not, among other things, exercise control over or be delegated the power to reveal (rather than access) the content of client records or the power to reveal (rather than access) any attorney-client communications.

Statutes affected:
Introduced: 705 ILCS 205/13
Engrossed: 705 ILCS 205/13
Enrolled: 705 ILCS 205/13