Colorado § 13-93-404 - Prohibition on nonlawyer ownership and fee sharing with nonlawyers.

§ 13-93-404. Prohibition on nonlawyer ownership and fee sharing with nonlawyers.

(1) A lawyer or law firm shall not, in connection with providing legal services:

(a) Share with, pay to, allocate to, distribute to, or provide any portion of legal fees or revenues, whether gross or net, or any other financial benefit derived from legal services, directly or indirectly, however denominated or structured, to any alternative business structure or nonlawyer, other than lawful wages, salaries, benefits, or discretionary bonuses paid to nonlawyer employees of the law firm for services rendered in the ordinary course of their employment;

(b) Enter into any financial, contractual, ownership, management, marketing, co-counsel, referral, or fee-allocation arrangement with an alternative business structure, which arrangement relates to providing legal services;

(c) Form a partnership, limited liability company, corporation, or other entity recognized under Colorado law with a nonlawyer if any of the activities of the entity consist of providing legal services; or

(d) Practice with or in the form of a professional company that is authorized to provide legal services for profit if:

(I) A nonlawyer owns any interest in the professional company; except that a fiduciary representative of the estate of a lawyer or LLP may hold the stock or interest of the lawyer or LLP for a reasonable time during administration of the estate; or

(II) A nonlawyer has the right to direct or control the professional judgment of a lawyer.

(2) How a compensation arrangement is characterized does not affect whether this section applies to the compensation arrangement.

(3) Nothing in this section:

(a) Prevents a client from directing the client's lawyer;

(b) Prohibits an arrangement in which all of the following are satisfied:

(I) The contract for the arrangement provides for a specific, predetermined dollar amount for clearly defined legal services;

(II) A payment is not made, directly or indirectly, for the referral of legal services or the purchase of a lead for a potential client or case;

(III) The fee under the arrangement is not contingent upon, tied to, or otherwise dependent on the economic outcome of any matter or the amount recovered and is not adjusted, refunded, credited, or otherwise modified based on the economic outcome or recovery;

(IV) The primary purpose of the arrangement is not the pursuit or recovery of monetary damages on behalf of a client; and

(V) The fee under the arrangement is solely for identified services and is not part of, conditioned upon, or combined with any other arrangement that provides for compensation based on referrals, case outcomes, or the client's recovery; or

(c) Limits or reduces the right of a client or employer of a lawyer to seek and collect or settle a payment on account of a statutory or contractual entitlement to attorney fee reimbursement.

Source: L. 2026: Entire part added, (HB 26-1421), ch. 403, p. 2522, § 1, effective August 12.