Alert

Jun 16, 2026

Blog Post | Legal MSOs, Like Healthcare MSOs, Face Many Challenges As Seen in Passage of Illinois HB 5487!

Private equity and other outside investors seeking investment in law firms have mostly turned to forming legal management services organizations, or MSOs, to pursue their investment.  

Because we, in the healthcare space, have been employing MSOs for our deal structures for a considerable time, those interested in forming MSOs to invest in law firms are often seeking our counsel due to our understanding of the complexities and impediments these structures face.

Illinois just recently added to these challenges by its passage of legislation to regulate outside management and control of law firms, with HB 5487. The bill attempts to control the growing influence of non-lawyers in the legal profession. While not outright prohibiting legal MSOs, the bill attempts to impose detailed guardrails on this outside control. 

Arguably, these rules affecting undue control over the practice of law were already in place in Illinois, and this bill just provided further guidelines. Illinois law, like the laws of most states, already prohibits non-lawyers from practicing law and prohibits fee sharing with non-lawyers.

Interestingly, the bill does not affect “Big Law” and limits its reach to law firms with less than $300,000,000 in global revenues as well as law firms and lawyers who provide services on a contingent fee basis.

Additionally, this bill adds penalties of $10,000 per violation or three times the actual damages of the client. 

While the Illinois bill has passed both houses, it now waits for Governor Pritzker’s signature to be signed into law.

Our lawyers are here to help you form your legal MSO in light of these growing challenges.  
 
Please contact Jonna D. Eimer, Esq. at Roetzel & Andress to learn more about how this could affect your practice.