Private equity, hedge funds and litigation funders can’t direct or influence law firms they back, according to legislation California law Governor Gavin Newsom (D) has signed into law.
Newsom signed the state legislation (AB 2305) into law Sept. 20, and it will go into effect in January. It targets alternative business structures and management service organizations — two vehicles that allow non-lawyer investment in the legal space. The bill still allows the practice of non-recourse litigation finance as long as funders do not interfere in the practice of law.
Philippa Balestrieri, a corporate M&A partner at Holland & Knight who …