Colorado’s New Consumer Protection Laws: Why They Matter to Lawyers and the Public

Every year, legislatures pass dozens of new laws. Most have relatively narrow applications or affect only a small segment of the public. Occasionally, however, new legislation reflects broader changes taking place within the legal profession. It responds to evolving business models, emerging risks, and new challenges that demand thoughtful solutions.

This year, Colorado enacted two such laws.

One addresses how legal clients are connected with attorneys. The other addresses who may have a financial stake in the practice of law. Although they regulate different aspects of the legal profession, both laws were designed to protect the same fundamental principle: the attorney-client relationship should remain direct, independent, and free from outside financial influence.

Ogborn Mihm partner Jason Wesoky has served this year as President of the Colorado Trial Lawyers Association (CTLA), where one of the organization’s legislative priorities included helping develop two bills aimed at strengthening consumer protections and preserving the independence of the legal profession. Working alongside fellow CTLA members, legislators, and other stakeholders throughout the legislative process gave Jason a firsthand perspective on both the issues the legislation sought to address and the practical considerations surrounding its implementation.

Following enactment of the bills, Jason joined fellow CTLA member Kevin Cheney to present a continuing legal education program designed to help Colorado attorneys understand the new laws and their practical impact.

These changes are significant not only for attorneys but also for consumers who deserve confidence that their legal interests come first.

Protecting Consumers from Deceptive Lead Generation

The first law, Senate Bill 26-174, addresses a growing concern in the legal marketplace: businesses that solicit injured or vulnerable individuals, collect detailed information about their legal matters, and then sell that information to lawyers on a per-lead or per-case basis.

This legislation was never intended to regulate legitimate advertising.

Law firms remain free to market their services through traditional channels such as search engine optimization, pay-per-click advertising, television, radio, billboards, and legal directories where the law firm is clearly identified. Those longstanding marketing practices are expressly preserved.

Instead, the law targets a very different business model.

Some lead-generation companies presented themselves in ways that could confuse consumers into believing they were communicating directly with a law firm when they were not. The legislation identifies concerns such as look-alike advertising, bait-and-switch tactics, impersonation, and fraud, all of which can undermine consumers’ informed decision-making when seeking legal help.

The harm extends beyond consumers.

When personal information is collected and sold repeatedly, multiple law firms may purchase the same lead, receive inaccurate information, or invest time evaluating cases that ultimately prove nonviable. The result is a marketplace that serves neither attorneys nor the public particularly well.

The new law seeks to eliminate that model by prohibiting the buying and selling of legal leads while preserving traditional advertising that allows consumers to identify and contact a law firm directly.

Preserving the Independence of Legal Representation

House Bill 26-1421 addresses a different, but equally important, issue.

Across the country, private equity firms and alternative business structures have become increasingly interested in investing in law firms or creating financial arrangements that allow nonlawyers to participate in legal fees or profits.

Supporters of the legislation believed those developments raised an important question:

Can attorneys remain fully independent when outside investors have a financial interest in the outcome of legal matters?

The legislation answers that question by reinforcing a longstanding principle of the legal profession that an attorney’s professional judgment should remain independent of outside economic interests. The statutory findings explain that nonlawyer financial participation can threaten attorney loyalty, confidentiality, professional independence, and ultimately public trust in the legal system.

The new law generally prohibits financial relationships involving alternative business structures and certain forms of fee-sharing with non-lawyers while continuing to permit ordinary business operations.

For example, firms may still obtain traditional bank financing, compensate employees, work with marketing or technology vendors on fixed-fee or hourly arrangements, and utilize many common administrative service providers. What the law seeks to prevent are compensation structures tied directly to legal fees, firm revenues, profits, or case outcomes.

The distinction is important.

Colorado is not attempting to prevent law firms from operating efficiently or using outside vendors. Rather, the legislation focuses on ensuring that outside businesses do not acquire a financial stake in the legal representation itself.

Why These Two Bills Belong Together

At first glance, these laws appear to address unrelated subjects.

One regulates lead generation.

The other regulates ownership and fee-sharing.

In reality, they were designed around the same central concern.

During their CLE presentation, they described these bills as addressing “outside money trying to get between people and their lawyers.” One focuses on the beginning of the attorney-client relationship, while the other focuses on what happens after representation begins.

Viewed together, the legislation reflects a consistent policy objective: preserving a direct relationship between lawyers and the clients they serve.

Whether the concern is deceptive lead-generation practices or financial ownership structures that could influence legal judgment, both laws seek to reinforce public confidence that attorneys remain accountable to their clients, not outside financial interests.

Looking Ahead

With the legislation now enacted and scheduled to take effect on August 12, 2026, Colorado attorneys and law firms should begin evaluating their marketing relationships, referral arrangements, vendor agreements, and, in some instances, relationships with co-counsel in other jurisdictions.

Like any significant legislative change, questions will arise as lawyers begin applying these statutes in practice. That is one reason the Colorado Trial Lawyers Association has made attorney education a priority following their enactment.

Helping shape legislation is only one part of the process. Helping lawyers understand how to comply with it and helping consumers understand why these protections matter are equally important.

Colorado’s legal profession continues to evolve alongside advances in technology, changes in legal marketing, and new business models. These developments present opportunities, but they also require thoughtful safeguards to preserve the profession’s core values.

At the end of the day, both laws reflect a simple principle: legal representation should remain independent, transparent, and focused on the client’s interests.

That is a goal that benefits not only attorneys but every Colorado consumer who places their trust in the legal system.

About the Author

Jason Wesoky is a partner at Ogborn Mihm LLP, where he represents individuals and businesses in complex trial and appellate litigation involving personal injury, business and contract disputes, employment law, insurance coverage, and real estate matters. He has 25 years of litigation experience, has first-chaired nearly 30 civil trials, and has argued dozens appeals before state and federal courts, including the Colorado Supreme Court and the United States Court of Appeals for the Tenth Circuit. During his term as President of the Colorado Trial Lawyers Association, Jason helped lead the development of significant legislative initiatives affecting the practice of law in Colorado and regularly speaks and writes on litigation and appellate topics.