California passes bill to stop law firm private equity takeovers
California is poised to become the third state this year to restrict private equity takeovers of law firms.
California is poised to become the third state this year to restrict private equity takeovers of law firms, an increasingly popular investment strategy.
Earlier this week, the California Senate and Assembly approved Assembly Bill 2305 prohibiting private-equity firms, hedge funds and other corporate investors from buying law firms. The bill heads to the desk of Gov. Gavin Newsom, who has until Sept. 30 to act on it, according to a report by the Wall Street Journal.
A second bill sent to Newsom seeks to punish unethical lawyers and increase penalties when they seek out clients at hospitals, jails and places where accidents have occurred. Assembly Bill 2039 would mandate that attorneys lose their license if they’re convicted of capping and “acted knowingly and for financial gain.” The lawyers could also be fined $25,000 per violation, according to a report by the Los Angeles Times.
Both bills were sponsored by the Consumer Attorneys of California.
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