IL SB3812

Prohibits private equity groups, hedge funds, and their affiliated entities (including management services organizations) from interfering with attorneys' professional judgment, controlling client records, making hiring/firing decisions based on competency, or charging fees based on law firm revenues or profits.

Bans contracts between law firms and private equity/hedge fund entities from including non-compete clauses or provisions restricting attorneys from commenting on quality of services or ethical challenges at the practice.

Restricts Illinois-licensed attorneys from sharing legal fees with out-of-state alternative business structures unless they are also licensed in that state, the fees are for legal services performed there, and that state's law controls under professional conduct rules.

Violations may result in attorney discipline plus statutory damages of $10,000 per violation or three times actual client damages (whichever is greater), attorney's fees and costs, and injunctive or declaratory relief.

Applies only to contracts entered into after the Act's effective date and exempts court-approved fee-sharing arrangements in multidistrict or consolidated litigation.