Legislation introduced in the Illinois House and Senate on February 6, 2026, seeks to regulate management service organizations (MSOs) and alternative business structures (ABS) within the state’s legal industry. The proposed bills would limit interactions between Illinois law firms and ABS firms. They also aim to reinforce existing ethics rules that prevent nonlawyers from interfering with attorneys’ professional judgment or managing aspects of law practices such as client records or hiring.
Supporters argue that these measures are necessary to ensure lawyers prioritize their clients over profits and to restrict private equity firms and other investors from having too much influence over legal decisions.
Legal ethics attorney Trisha Rich, who has worked on numerous law firm MSO deals, expressed concerns about the proposed legislation. “I think this bill reflects that people don’t truly understand the relationship between an MSO and a law firm,” she commented. “In a properly structured MSO/law firm relationship, the firm does remain completely independent.”
Rich also said that the bills incorrectly define what MSOs are and misrepresent how they interact with law firms. She believes the legislation could be found unconstitutional since only the Illinois Supreme Court has authority over attorney regulation.