California Law Banning Contingency Fee Sharing With ABS Firms Just a ‘Smaller Battle in That Bigger War’

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Publish Date:
October 14, 2025
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Law.com
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Summary

“This is just a salvo, just a smaller battle in that bigger war,” said Stanford Law professor David Freeman Engstrom, who serves as co-director of the Deborah L. Rhode Center on the Legal Profession.

Freeman Engstrom said the fact that the law is narrowly tailored to contingency fee work “reflects the politics of the issue.”

“That reflects the fact that the consumer attorneys, plaintiffs-side lawyers, are quite powerful in California,” he said. “It once again goes back to this idea that this law is narrowly focused on one particular type of practice and it leaves untouched a lot of other issues that are going to arise as we have this patchwork of reform states and non-reform states.”

Freeman Engstrom said the California law adds to the “patchwork problem, in which you have this balkanized, 50-state approach to legal services, and it just creates a huge drag on innovation.”

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