Governor Newsom Signs Law to Protect Consumers Against Predatory Legal Fees


ANAHEIM, CA, November 10, 2025 /24-7PressRelease/ -- On October 13, 2025, California Governor Gavin Newsom signed Assembly Bill 931 into law, extending additional consumer protections and transparency to legal funding. This new statute prohibits California-licensed attorneys from fee-sharing with non-lawyer entities. It also bans lawyers from accepting referral fees from non-lawyer entities. Effective immediately, lawyers in California are required to offer a five-day cancellation window, prioritize transparency in client-attorney contracts, and eliminate hidden fees and compound interest from their payment structure.

Senate Bill 37 is currently pending, and if signed into law, it will provide more government oversight on how lawyers can advertise their services to consumers. Law firms would be required to limit advertising language to verifiable facts. Prohibited content would include reference to potential case results, comparisons to past verdicts, and any other language that could be interpreted as misleading or deceptive. SB 37 disallows the promotion of awards in which an attorney or law firm pays for the prize.

Both bills outline penalties in the form of compensatory damages and civil liability. While these statutes may safeguard consumers against predatory practices, they will also drastically reshape how California attorneys attract clients and prompt firms to restructure their fees and contracts.

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