FAQ: California Bills AB 931 and SB 37 - New Legal Funding and Advertising Regulations
TL;DR
California lawyers gain competitive advantage by restructuring transparent fee models and eliminating hidden costs to comply with new consumer protection laws.
Assembly Bill 931 requires California attorneys to offer five-day cancellation windows, ban fee-sharing with non-lawyers, and eliminate hidden fees and compound interest.
These new consumer protection laws make legal services more transparent and affordable, safeguarding Californians from predatory practices and hidden fees.
California now bans lawyers from sharing fees with non-lawyers and requires five-day cancellation windows, reshaping how attorneys attract and retain clients.
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AB 931 and SB 37 are California bills that strengthen government oversight of legal funding practices and attorney advertising to provide additional consumer protections and transparency in legal services.
AB 931 prohibits California-licensed attorneys from fee-sharing with non-lawyer entities, bans referral fees from non-lawyer entities, requires a five-day cancellation window, prioritizes contract transparency, and eliminates hidden fees and compound interest from payment structures.
AB 931 became effective immediately after being signed into law by Governor Gavin Newsom on October 13, 2025.
SB 37 would regulate attorney advertising by requiring law firms to limit advertising to verifiable facts, prohibiting references to potential case results, comparisons to past verdicts, misleading language, and promotion of awards where attorneys pay for the prize.
Both bills outline penalties in the form of compensatory damages and civil liability for violations of the new regulations.
California-licensed attorneys and law firms are directly affected, as they must restructure their fees, contracts, and advertising practices, while consumers receive additional protections against predatory practices.
Consumers gain protections against predatory practices through increased transparency in attorney contracts, elimination of hidden fees and compound interest, and safeguards against misleading advertising claims.
Law firms will need to drastically reshape how they attract clients and restructure their fees and contracts to comply with the new transparency requirements and advertising restrictions.
SB 37 is currently pending and has not yet been signed into law, meaning its provisions are not yet in effect while the bill remains under consideration.
For more information about business law matters in California, you can contact the attorneys at Focus Law LA, who specialize in business litigation and commercial law matters in Southern California.
Curated from 24-7 Press Release
