Bill Commons

CA AB 2305

enacted

Attorneys: corporate legal funders.

California · 2025-2026 Regular Session · lower

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Quick answers

Did CA AB 2305 pass?

Yes. CA AB 2305 has been enacted into law. Latest recorded action (2026-09-20): Chaptered by Secretary of State - Chapter 393, Statutes of 2026.

What is CA AB 2305 about?

Existing law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California (State Bar) , a public corporation governed by a board of trustees. Existing law makes it a misdemeanor for a person who is not a member of the State Bar, or authorized to practice law, to practice law in this state. Existing law regulates, among other things, fee agreements, legal advertising and referral services, the sale of financial products to a client, and the allowable forms of organization of a law practice, including a law corporation. Existing law, until January 1, 2030, prohibits an attorney licensed or otherwise authorized to practice in the state from sharing legal fees directly or indirectly with an out-of-state entity that provides legal services while allowing nonlawyer ownership or decisionmaking authority, except as specified. Existing law authorizes the board of trustees, with the approval of the Supreme Court to formulate and enforce rules of professional conduct on all licensees. A violation of these provisions may result in disciplinary action against a licensed attorney or other remedies. This bill would make a corporate legal funder interfering with a substantive litigation decision or exercising control over a litigation function, an unauthorized practice of law. The bill would prohibit a litigation practice from contracting with a corporate legal funder for specific terms, including restricting an attorney or client from withdrawing from representation in the event of a nonlawyer engaging in the unauthorized practice of law under these provisions. This bill would prohibit a corporate legal funder, or an entity it controls, from entering into any contract, agreement, or arrangement with a litigation practice if the contract would constitute an unauthorized practice of law under these provisions, and would further prohibit and void a contract or terms that would permit or facilitate an unauthorized practice of law under these provisions, as specified. This bill would provide that these provisions shall not be construed to prohibit the practice of nonrecourse litigation finance and that the practice of nonrecourse litigation finance shall not constitute impermissible fee sharing under the above-described provisions or the rules of professional conduct, as provided. The bill would deem a violation of these provisions by an attorney as grounds for the imposition of discipline by the State Bar and subject an attorney and the corporate legal funder to statutory or actual damages, attorney's fees and costs, and other relief, as specified. The bill would define terms for these purposes. This bill would exempt violation of its provisions from the criminal prohibitions. This bill would specify that its provisions only apply to contracts entered into on and after January 1, 2027.

Who sponsors CA AB 2305?

Kalra is the primary sponsor of CA AB 2305, joined by 2 cosponsors.

Description

Existing law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California (State Bar) , a public corporation governed by a board of trustees. Existing law makes it a misdemeanor for a person who is not a member of the State Bar, or authorized to practice law, to practice law in this state. Existing law regulates, among other things, fee agreements, legal advertising and referral services, the sale of financial products to a client, and the allowable forms of organization of a law practice, including a law corporation. Existing law, until January 1, 2030, prohibits an attorney licensed or otherwise authorized to practice in the state from sharing legal fees directly or indirectly with an out-of-state entity that provides legal services while allowing nonlawyer ownership or decisionmaking authority, except as specified. Existing law authorizes the board of trustees, with the approval of the Supreme Court to formulate and enforce rules of professional conduct on all licensees. A violation of these provisions may result in disciplinary action against a licensed attorney or other remedies. This bill would make a corporate legal funder interfering with a substantive litigation decision or exercising control over a litigation function, an unauthorized practice of law. The bill would prohibit a litigation practice from contracting with a corporate legal funder for specific terms, including restricting an attorney or client from withdrawing from representation in the event of a nonlawyer engaging in the unauthorized practice of law under these provisions. This bill would prohibit a corporate legal funder, or an entity it controls, from entering into any contract, agreement, or arrangement with a litigation practice if the contract would constitute an unauthorized practice of law under these provisions, and would further prohibit and void a contract or terms that would permit or facilitate an unauthorized practice of law under these provisions, as specified. This bill would provide that these provisions shall not be construed to prohibit the practice of nonrecourse litigation finance and that the practice of nonrecourse litigation finance shall not constitute impermissible fee sharing under the above-described provisions or the rules of professional conduct, as provided. The bill would deem a violation of these provisions by an attorney as grounds for the imposition of discipline by the State Bar and subject an attorney and the corporate legal funder to statutory or actual damages, attorney's fees and costs, and other relief, as specified. The bill would define terms for these purposes. This bill would exempt violation of its provisions from the criminal prohibitions. This bill would specify that its provisions only apply to contracts entered into on and after January 1, 2027.

Introduced
2026-03-16
Latest action
2026-09-20 — Chaptered by Secretary of State - Chapter 393, Statutes of 2026.
Bill type
bill
Last updated
—

Subjects

Sponsors

  • Kalraauthor
  • Stefanicoauthor
  • Zburcoauthor

Committees

Not provided by source.

Action timeline

Newest first

  1. 2026-09-20

    Chaptered by Secretary of State - Chapter 393, Statutes of 2026.

    became-law

  2. 2026-09-20

    Approved by the Governor.

    executive-signature

  3. 2026-08-31

    Enrolled and presented to the Governor at 4 p.m.

    executive-receipt

  4. 2026-08-25

    Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0.).

    amendment-passage,committee-passage,committee-passage-favorable

  5. 2026-08-25

    Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 6456.).

    amendment-passage,committee-passage,committee-passage-favorable

  6. 2026-08-24

    In Assembly. Concurrence in Senate amendments pending.

  7. 2026-08-24

    Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0.).

    passage,reading-1,reading-3

  8. 2026-08-18

    Read second time. Ordered to third reading.

    reading-1,reading-2,reading-3

  9. 2026-08-17

    Read third time and amended. Ordered to second reading.

    amendment-passage,reading-1,reading-2,reading-3

  10. 2026-06-11

    Read second time. Ordered to third reading.

    reading-1,reading-2,reading-3

  11. 2026-06-10

    From committee: Do pass. (Ayes 12. Noes 0.) (June 9).

    committee-passage,committee-passage-favorable

  12. 2026-06-01

    From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD.

    amendment-introduction,amendment-passage,committee-passage,reading-1,reading-2,referral-committee

  13. 2026-05-06

    Referred to Com. on JUD.

    referral-committee

  14. 2026-04-06

    In Senate. Read first time. To Com. on RLS. for assignment.

    reading-1,referral-committee

  15. 2026-04-06

    Read third time. Passed. Ordered to the Senate. (Ayes 68. Noes 0. Page 4469.)

    passage,reading-1,reading-3

  16. 2026-03-26

    Read second time. Ordered to third reading.

    reading-1,reading-2,reading-3

  17. 2026-03-25

    Read second time and amended. Ordered returned to second reading.

    amendment-passage,reading-1,reading-2

  18. 2026-03-24

    From committee: Amend, and do pass as amended. (Ayes 12. Noes 0.) (March 24).

    amendment-introduction,amendment-passage,committee-passage

  19. 2026-03-17

    Re-referred to Com. on JUD.

    referral-committee

  20. 2026-03-16

    From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.

    amendment-introduction,amendment-passage,committee-passage,reading-1,reading-2,referral-committee

  21. 2026-03-09

    Referred to Com. on JUD.

    referral-committee

  22. 2026-02-20

    From printer. May be heard in committee March 22.

  23. 2026-02-19

    Read first time. To print.

    reading-1

Versions

  • 02/19/26 - Introduced — 2026-02-19Compare
  • 03/16/26 - Amended Assembly — 2026-03-16Compare
  • 03/25/26 - Amended Assembly — 2026-03-25Compare
  • 06/01/26 - Amended Senate — 2026-06-01Compare
  • 08/17/26 - Amended Senate — 2026-08-17Compare
  • 08/27/26 - Enrolled — 2026-08-27Compare
  • (document, no version)Compare
  • AB2305Compare

Documents

Votes

  • Do pass as amended.

    2026-03-24 · pass · 12-0

    Member-level votes (12)
    • Zbur: yes
    • Stefani: yes
    • Pacheco: yes
    • Dixon: yes
    • Kalra: yes
    • Papan: yes
    • Harabedian: yes
    • Macedo: yes
    • Connolly: yes
    • Bauer-Kahan: yes
    • Bryan: yes
    • Sanchez: yes

  • AB 2305 Kalra Assembly Third Reading

    2026-04-06 · pass · 68-0

    Member-level votes (80)
    • Connolly: yes
    • Bains: yes
    • Hoover: yes
    • Hart: yes
    • Michelle Rodriguez: yes
    • Bonta: yes
    • Fong: yes
    • Patel: yes
    • Jeff Gonzalez: yes
    • Zbur: yes
    • Petrie-Norris: yes
    • Lowenthal: yes
    • Ramos: yes
    • Haney: yes
    • Alvarez: yes
    • Aguiar-Curry: yes
    • Kalra: yes
    • Addis: yes
    • Valencia: yes
    • Mark González: yes
    • Soria: yes
    • Nguyen: yes
    • Alanis: yes
    • Rivas: yes
    • Flora: yes
    • Krell: yes
    • McKinnor: yes
    • Ransom: yes
    • Gipson: yes
    • Carrillo: yes
    • Solache: yes
    • Macedo: yes
    • Ortega: yes
    • Ta: yes
    • Rogers: yes
    • Ward: yes
    • Boerner: yes
    • Lee: yes
    • Chen: yes
    • Calderon: yes
    • Wallis: yes
    • Blanca Rubio: yes
    • Ellis: yes
    • Sharp-Collins: yes
    • Jackson: yes
    • Davies: yes
    • Wicks: yes
    • Ahrens: yes
    • Pacheco: yes
    • Arambula: yes
    • DeMaio: yes
    • Stefani: yes
    • Dixon: yes
    • Pellerin: yes
    • Sanchez: yes
    • Garcia: yes
    • Schiavo: yes
    • Papan: yes
    • Bryan: yes
    • Castillo: yes
    • Tangipa: yes
    • Gallagher: yes
    • Elhawary: yes
    • Wilson: yes
    • Berman: yes
    • Hadwick: yes
    • Johnson: yes
    • Irwin: yes
    • Muratsuchi: other
    • Lackey: other
    • Ávila Farías: other
    • Quirk-Silva: other
    • Harabedian: other
    • Gabriel: other
    • Patterson: other
    • Schultz: other
    • Celeste Rodriguez: other
    • Caloza: other
    • Bennett: other
    • Bauer-Kahan: other

  • Do pass

    2026-06-09 · pass · 12-0

    Member-level votes (13)
    • Wahab: yes
    • Ashby: yes
    • Laird: yes
    • Allen: yes
    • Reyes: yes
    • Niello: yes
    • Weber Pierson: yes
    • Umberg: yes
    • Caballero: yes
    • Wiener: yes
    • Durazo: yes
    • Valladares: yes
    • Stern: other

Related bills

No related bills recorded for this bill.

Official source

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB2305

Attribution

Data from openstates_api_sync, retrieved 2026-09-21T23:05:31.821105Z

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