House Committee of Reference Report
Committee on Judiciary
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All text that will be removed from the bill will be indicated by strikethrough as follows:
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This is text that is removed from law. -
Text that is added to a bill will be indicated by either all capitals or bold & italic as follows:
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April 29, 2026
After consideration on the merits, the Committee recommends the following:
HB26-1421 be amended as follows, and as so amended, be referred to the Committee of the Whole with favorable recommendation:
Page 1, Line 1Amend printed bill, page 3, strike lines 7 and 8 and substitute:
Page 1, Line 2"(a) The rules of the Colorado supreme court governing
Page 1, Line 3the practice of law underscore that the independent
Page 1, Line 4professional judgment of lawyers is essential to the fair
Page 1, Line 5administration of justice and restrict the sharing of legal fees
Page 1, Line 6with nonlawyers and nonlawyer ownership or control of a law
Page 1, Line 7firm;".
Page 1, Line 8Page 3, line 10, strike "legal fees," and substitute "law firms and
Page 1, Line 9their fees,".
Page 1, Line 10Page 3, line 18, strike "and fee sharing;" and substitute "of law firms
Page 1, Line 11and the concomitant sharing of attorney fees;".
Page 1, Line 12Page 3, line 25, strike "services;" and substitute "services to third
Page 1, Line 13parties;".
Page 1, Line 14Page 4, line 3, after "effective" insert "additional".
Page 1, Line 15Page 4, after line 4 insert:
Page 1, Line 16"(3) It is not the intent of the general assembly to:
Page 1, Line 17(a) Prohibit or restrict the ability of creditors or lawful
Page 1, Line 18assignees of claims to enforce the claims, including through the
Page 1, Line 19use of lawyers; or
Page 1, Line 20(b) Alter longstanding practices related to debt
Page 1, Line 21collection if legal services are rendered in compliance with
Page 2, Line 1applicable rules of professional conduct.".
Page 2, Line 2Page 4, line 23, after "(2)" insert "(a)".
Page 2, Line 3Page 5, after line 5 insert:
Page 2, Line 4"(b) "Economically participates in" does not include a
Page 2, Line 5financial interest arising solely from the ownership or
Page 2, Line 6assignment of a claim if the person does not direct or control
Page 2, Line 7the professional judgment of a lawyer.".
Page 2, Line 8Page 5, line 7, after "proprietorship," insert "employer of a lawyer
Page 2, Line 9who is directly employed as in-house counsel or licensed under
Page 2, Line 10a single-client certification,".
Page 2, Line 11Page 6, line 2, strike "services;" and substitute "services to a client;".
Page 2, Line 12Page 6, line 26, strike "or".
Page 2, Line 13Page 7, line 2, strike "employment." and substitute "employment;
Page 2, Line 14(IV) Amounts recovered on a claim by a person that owns
Page 2, Line 15or has been assigned the claim if the recovery does not
Page 2, Line 16constitute compensation for legal services; or
Page 2, Line 17(V) Any statutory or contractual entitlement to
Page 2, Line 18attorney fee reimbursement held by a law firm's client or direct
Page 2, Line 19employer.".
Page 2, Line 20Page 7, strike lines 3 through 12 and substitute:
Page 2, Line 21"(6) "Legal services" means any of the following while
Page 2, Line 22acting in a representative capacity concerning a legal right
Page 2, Line 23arising in whole or in part in Colorado:
Page 2, Line 24(a) Protecting, defending, or enforcing the legal rights or
Page 2, Line 25duties of another person;
Page 2, Line 26(b) Representing another person before a tribunal or, on
Page 2, Line 27behalf of another person, drafting pleadings or other papers for
Page 2, Line 28a proceeding before a tribunal;
Page 2, Line 29(c) Counseling, advising, or assisting another person in
Page 2, Line 30connection with that person's legal rights or duties;
Page 2, Line 31(d) Exercising legal judgment in preparing legal
Page 2, Line 32documents for another person;
Page 2, Line 33(e) Exercising legal judgment to advise another person
Page 2, Line 34about the legal effect of a proposed action or decision;
Page 3, Line 1(f) Exercising legal judgment to advise another person
Page 3, Line 2about legal remedies or possible courses of legal action
Page 3, Line 3available to that person;
Page 3, Line 4(g) Exercising legal judgment to select a legal document
Page 3, Line 5for another person or to prepare a legal document for another
Page 3, Line 6person other than solely as a typist or scrivener;
Page 3, Line 7(h) Exercising legal judgment to represent or advocate
Page 3, Line 8for another person in a negotiation, settlement, conference,
Page 3, Line 9mediation, or alternative dispute resolution proceeding; and
Page 3, Line 10(i) Soliciting fees for services involving the exercise of
Page 3, Line 11legal judgment.".
Page 3, Line 12Page 7, lines 21 and 22, strike "and is not an LLP." and substitute "or
Page 3, Line 13is not authorized to practice law by the Colorado supreme
Page 3, Line 14court.".
Page 3, Line 15Page 7, after line 22 insert:
Page 3, Line 16"(10) (a) "Nonprofit organization" means a charitable
Page 3, Line 17organization, as defined in section 39-26-102 (2.5).
Page 3, Line 18(b) A nonprofit organization is not an alternative
Page 3, Line 19business structure and does not economically participate in the
Page 3, Line 20provision of legal services solely by virtue of the nonprofit
Page 3, Line 21organization's relationship with a lawyer or law firm, including
Page 3, Line 22where the lawyer or law firm earns legal fees.".
Page 3, Line 23Renumber succeeding subsection accordingly.
Page 3, Line 24Page 9, after line 3 insert:
Page 3, Line 25"(3) Nothing in this section:
Page 3, Line 26(a) Prevents a client from directing the client's lawyer;
Page 3, Line 27(b) Prohibits an arrangement in which all of the
Page 3, Line 28following are satisfied:
Page 3, Line 29(I) The contract for the arrangement provides for a
Page 3, Line 30specific, predetermined dollar amount for clearly defined legal
Page 3, Line 31services;
Page 3, Line 32(II) A payment is not made, directly or indirectly, for the
Page 3, Line 33referral of legal services or the purchase of a lead for a
Page 3, Line 34potential client or case;
Page 3, Line 35(III) The fee under the arrangement is not contingent
Page 3, Line 36upon, tied to, or otherwise dependent on the outcome of any
Page 3, Line 37matter or the amount recovered and is not adjusted, refunded,
Page 4, Line 1credited, or otherwise modified based on the outcome or
Page 4, Line 2recovery;
Page 4, Line 3(IV) The primary purpose of the arrangement is not the
Page 4, Line 4pursuit or recovery of monetary damages on behalf of a client;
Page 4, Line 5and
Page 4, Line 6(V) The fee under the arrangement is solely for identified
Page 4, Line 7services and is not part of, conditioned upon, or combined with
Page 4, Line 8any other arrangement that provides for compensation based on
Page 4, Line 9referrals, case outcomes, or the client's recovery; or
Page 4, Line 10(c) Limits or reduces the right of a client or employer of
Page 4, Line 11a lawyer to seek and collect or settle a payment on account of
Page 4, Line 12a statutory or contractual entitlement to attorney fee
Page 4, Line 13reimbursement.".
Page 4, Line 14Page 11, line 16, strike "sunset review -".
Page 4, Line 15Page 11, line 22, strike "employment." and substitute "employment;
Page 4, Line 16(c) Nonrecourse funding provided to a lawyer or law firm
Page 4, Line 17with respect to specific, identified legal representations, in
Page 4, Line 18which:
Page 4, Line 19(I) The funding is provided solely for the fees or expenses
Page 4, Line 20of specific, identified legal representations that have
Page 4, Line 21commenced or for which the lawyer or law firm has been
Page 4, Line 22retained and not for the solicitation or acquisition of future
Page 4, Line 23clients or matters;
Page 4, Line 24(II) The return of the person providing the funding is
Page 4, Line 25limited to a multiple of the funded amount or a rate of interest
Page 4, Line 26on the funded amount and does not constitute a share of legal
Page 4, Line 27fees, law firm revenue, and law firm profits; and
Page 4, Line 28(III) The person providing the funding has no right to
Page 4, Line 29participate in or receive any portion of legal fees, law firm
Page 4, Line 30revenue, or law firm profits except from the proceeds of the
Page 4, Line 31specific, identified legal representations; or
Page 4, Line 32(d) The provision of legal services provided solely in
Page 4, Line 33connection with administrative matters arising under federal
Page 4, Line 34law or before a federal agency.
Page 4, Line 35(2) Nothing in this part 4 limits the Colorado supreme
Page 4, Line 36court's rule-making, decisional, or enforcement authority as to
Page 4, Line 37the practice of law in Colorado, including as to the
Page 4, Line 38unauthorized practice of law and professional independence of
Page 4, Line 39lawyers and LLPs.
Page 4, Line 40(3) This part 4 is repealed, effective September 1, 2030.".
Page 4, Line 41
Page 5, Line 1Page 11, strike lines 23 through 25.
Page 5, Line 2Page 11, after line 25 insert:
Page 5, Line 3"(3) (a) Nothing in this part 4 prohibits a lawyer or law
Page 5, Line 4firm that provides legal services to a nonprofit organization or
Page 5, Line 5individuals who receive benefits from the nonprofit
Page 5, Line 6organization from remitting to a nonprofit organization that
Page 5, Line 7provides or supports legal services or access-to-justice services
Page 5, Line 8any fees or revenues earned from its representation.
Page 5, Line 9(b) A nonprofit organization that provides or supports
Page 5, Line 10legal services or access-to-justice services is not subject to this
Page 5, Line 11part 4.".
Page 5, Line 12Page 12, strike lines 17 through 25.
Page 5, Line 13Renumber succeeding sections accordingly.