What Colorado's HB 26-1421 Means for Law

Colorado HB 26-1421 is effective August 12, 2026. Read the statute’s terms with qualified counsel before applying it to a particular arrangement.

Published 2026-06-10 — Updated 2026-08-27

Colorado enacted HB 26-1421, the Legal Practice Integrity and Fee-Sharing Prohibition Act, in 2026. The act is effective August 12, 2026. Its application depends on the statute’s terms, the arrangement, and the relevant facts.

California's AB 931, effective January 1, 2026, added restrictions on specified fee sharing by California lawyers with out-of-state alternative business structures and addressed specified service arrangements; it is not a comprehensive MSO statute. Illinois Public Act 104-0801 is effective August 7, 2026; as of August 28, 2026, the official source is https://www.ilga.gov/Legislation/PublicActs/PrinterFriendly/104-0801. These sources are related developments, not interchangeable rules, and each must be read by its own terms.

The act addresses specified compensation and legal-practice arrangements, including compensation contingent on or calculated as a percentage of specified firm receipts. It also addresses specified flat-fee and hourly compensation. The statutory language, definitions, exceptions, and a party’s actual conduct matter; a generic “MSO” label does not resolve the analysis.

The act provides consequences for violations under its terms. Parties considering a Colorado arrangement should have counsel review the current official text, related professional-conduct rules, the compensation formula, and operating controls rather than rely on summaries or labels.

RMS states these operating boundaries: fixed fees or fixed per-seat fees for defined nonlegal services; no share of legal fees or outcomes; no legal practice or control; and no receipt or control of client funds. These are RMS-specific statements, not a conclusion about every arrangement or a substitute for counsel’s review.

The practical next step is documentation and counsel review. Compare the proposed agreement and operations against the statute and all other applicable requirements before proceeding.