Colorado SB26-174: What Law Firms Should Know

For years, attorneys and law firms in Colorado have used a wide range of outside companies to advertise their services, connect with prospective clients, and ultimately grow their practices. Beginning on August 12, 2026, however, firms that pay third parties for leads will have to take a very close look at exactly what they are buying and how those leads are being generated. This is because Colorado Senate Bill 26-174, formally titled “Prohibit Lead Generation Legal Marketing,” will prohibit lawyers, law firms, and licensed legal paraprofessionals from paying third parties for information about potential clients or cases. The law will also prohibit businesses from generating and selling these leads within the Colorado legal market.

Importantly, this does not mean that legal marketing agencies are now banned from working with law firms in Colorado, nor does it mean that law firms can no longer hire outside companies to manage their advertising. Search engine optimization, pay-per-click advertising, television, radio, streaming, billboards, and clearly identified directory listings are all still permitted. Instead, the primary distinction is whether a third party is performing marketing services on behalf of a clearly identified law firm, or whether that third party is collecting consumers’ information and then selling or routing it as a lead.

Essentially, Colorado law firms can still pay for advertising, media, and marketing work. They generally cannot pay another company to deliver people or information about their potential cases.

What Is Colorado SB26-174?

Colorado Governor Jared Polis signed SB26-174 on June 3, 2026, and the law will take effect at 12:01 a.m. on August 12, 2026. The law applies to conduct occurring on or after that date.
The legislation adds C.R.S. § 6-1-741 and, through C.R.S. § 6-1-105(1)(tttt), makes violations a deceptive trade practice under the Colorado Consumer Protection Act. It also received broad bipartisan support, passing by a vote of 31–4 in the Colorado Senate and 51–13 in the House.

When passing the law, the Colorado General Assembly drew an important distinction between traditional legal advertising and third-party legal lead generation. Traditional advertising allows a consumer to see which attorney or law firm is offering its services and then make an informed decision about whether to contact that firm. In a lead-generation arrangement, on the other hand, a third party may appear to be an attorney or law firm, collect a consumer’s personal information and details about a legal matter, and then sell that information to one or more legal providers.

Therefore, the law does not merely look at whether a law firm is advertising on Google, social media, television, or somewhere else. Rather, it looks at the actual arrangement behind the advertisement, including who is being identified, where the consumer’s information is going, and what the law firm is paying the third party to provide.

What Does the Law Consider “Lead Generation Legal Marketing”?

Under C.R.S. § 6-1-741, “lead generation legal marketing” generally means any form of marketing in which an attorney, law firm, or licensed legal paraprofessional pays money or some other form of compensation to a third party to receive information about a potential client or case. This information may include the prospective client’s name and contact information, facts about a potential claim, or other details concerning the person’s legal issue.

The law expressly includes compensation that is:

Paid directly or indirectly;
Paid on a per-lead basis;
Paid on a per-case basis;
Paid through a subscription model; or
Routed through intermediaries, affiliates, or other entities.

This means that simply changing the name or pricing structure of a lead-generation program will not necessarily make it lawful. For example, a company cannot necessarily take what was previously a per-lead program, begin calling it a monthly membership or subscription, and then continue delivering the same potential-client information. Subscriptions are specifically named in the statute, and the actual substance of the transaction will matter more than whatever name the parties choose to give it.

There is a limited carve-out for fee sharing among licensed attorneys, law firms, and licensed legal paraprofessionals, as long as the arrangement complies with Colorado law and Colorado Supreme Court rules. However, firms should not read this exception as blanket permission to pay referral fees. Colorado’s rules concerning referral fees, divisions of fees, co-counsel relationships, and professional responsibility will still apply, which means these arrangements should be reviewed on their own facts.

What Is Considered Permitted Traditional Legal Marketing?

SB26-174 defines “traditional legal marketing” as marketing performed by a lawyer, law firm, or licensed legal paraprofessional, or by a third party working on behalf of one, during which the attorney, firm, or paraprofessional advertising their services is clearly identified to the consumer.

The statute gives several specific examples of traditional legal marketing, including:

Search engine optimization;
Pay-per-click internet advertising;
Radio advertising;
Television advertising;
Streaming advertising;
Billboard advertising; and
Listings in legal directories that clearly disclose the identity of the attorney, law firm, or licensed legal paraprofessional.

You should note that this is not a complete list of every form of marketing that may be permitted. The statute uses inclusive language, so the fact that social media, direct mail, email, print advertising, or podcast advertising is not specifically named does not automatically mean that these channels are prohibited. Generally, the more important question is whether the marketing clearly identifies the legal provider whose services are being advertised and is being conducted on that provider’s behalf, rather than collecting consumer information to sell or distribute to an undisclosed law firm.

In other words, the advertising channel itself is not necessarily the problem. The issue is whether the consumer knows which firm is advertising and whether that consumer is contacting the firm directly instead of unknowingly submitting information to a lead seller or legal marketplace.

What Legal Marketing Practices Are Likely Prohibited?

There are several types of marketing arrangements that fall within, or at the very least create a significant risk of falling within, SB26-174’s definition of prohibited lead generation. They include the following:

Purchasing leads from a third-party vendor on either a shared or exclusive basis;
Paying a vendor for each inquiry, form submission, telephone call, or signed client;
Participating in real-time “ping-post” auctions in which consumer information is sold to bidders;
Buying signed cases or claimant inventories from a nonlawyer aggregator;
Paying a flat subscription, membership, or monthly fee in exchange for contact records;
Using an affiliate, intermediary, or related entity to purchase legal leads indirectly;
Operating or participating in generic websites that collect consumer information and distribute it among law firms;
Using a shared call center that qualifies consumers and routes them to participating firms;
Using AI chat or voice systems that collect legal information and then sell or distribute it to multiple firms;
Paying medical providers, repair shops, towing companies, bail bond businesses, or similar third parties for consumer or case information; and
Paying a directory or matching service according to the number of contacts, inquiries, or prospective clients it delivers.

Some firms may assume that an “exclusive” lead is different because the vendor only sells the consumer’s information once. That being said, the statute does not create an exception for exclusive leads. Exclusivity may make the lead more valuable from a business standpoint, but it does not appear to change the fact that the firm is paying a third party to receive information about a potential client or case.

Law firms should also pay close attention to programs involving crash-report data, data enrichment, paid networking groups, co-registration systems, medical-provider referrals, and similar sources of consumer information. Depending on how the program operates, a firm may still be paying a third party for information about an identifiable person who has a potential legal need. The fact that some information came from a public record, or that the vendor uses a different billing description, may not resolve the issue. These arrangements can be highly fact-specific and should be reviewed by Colorado counsel before they continue beyond the law’s effective date.

What Can Colorado Law Firms and Marketing Agencies Still Do?

Fortunately, SB26-174 does not prevent Colorado law firms from continuing to advertise their services across a wide range of channels. Law firms can still run substantial marketing campaigns under their own names, and the statute does not place a general limit on the volume of firm-identified advertising they may purchase. Of course, all other professional-conduct and advertising rules will continue to apply.

Some of the services that law firms and their marketing agencies may continue providing include:

Website design, development, and maintenance;
Search engine optimization and content marketing;
Paid search and paid social media management;
Television, radio, streaming, print, podcast, and outdoor advertising;
Media planning and purchasing;
Conversion-rate optimization;
Analytics and call tracking;
Reputation and review management;
Marketing automation; and
Intake technology configured for a clearly identified law firm.

A full-service marketing agency may still perform these services for a Colorado law firm and receive a flat fee, hourly compensation, or a monthly retainer for doing so. The law firm should remain clearly identified throughout the consumer’s experience, and the agency should be paid for the actual marketing services it performs rather than for each individual consumer or case it delivers.

This distinction is important. A marketing company is not prohibited simply because its work causes prospective clients to contact a law firm. After all, generating interest and inquiries is one of the main purposes of advertising. The concern arises when the company independently gathers information about potential clients and cases and then receives compensation for transferring that information to a law firm.

Directory Listings: Placement Versus Lead Delivery

SB26-174 specifically recognizes clearly identified legal-directory listings as a form of traditional marketing. However, firms should not assume that every service calling itself a “directory” is automatically permitted. The way the service operates, how the consumer reaches the firm, and what the firm is actually paying for will all matter.

More consistent with traditional marketing
Higher-risk lead-generation model
The law firm pays for a listing, profile enhancement, or preferred placement.
The law firm pays for each contact, inquiry, call, or matched consumer.
The consumer sees the law firm’s identity and chooses to contact it.
The consumer submits information to the directory, which then sells or routes it.
The directory is selling advertising space or visibility.
The directory is selling potential-client information.

Simply put, paying for placement or increased visibility in a directory is different from paying the directory each time it sends over a person’s contact information. A company’s label does not control the analysis. Its actual compensation model and the path the consumer’s information takes are far more important.

A Practical SB26-174 Compliance Checklist

The statute does not provide a simple three-question safe harbor that guarantees every marketing arrangement is compliant. Nevertheless, law firms and marketing agencies can ask several practical questions to identify programs that may require closer review:

Is the law firm clearly identified? The consumer should know which specific attorney or law firm is advertising at the first meaningful point of contact.
Is the agency acting for that identified firm? The marketing should be created and operated on behalf of the named legal provider, rather than for an independent lead seller or undisclosed network of potential buyers.
What is the firm actually purchasing? There is a meaningful difference between paying for professional services, advertising placement, creative work, or media and paying for a particular person’s contact information or case details.
Where does the consumer’s information go? Information submitted through the campaign should go to the identified firm and its authorized service providers, rather than entering a shared pool where it can be sold or routed elsewhere.
How is the vendor compensated? Per-lead, per-case, per-retainer, subscription, outcome-based, and indirect compensation structures should receive especially careful review under SB26-174 and other Colorado laws.
Who controls the marketing assets? SB26-174 does not expressly require the law firm to own its domain, advertising accounts, tracking numbers, landing pages, and customer relationship management records. Even so, firm ownership or control of these assets may serve as important evidence that the agency is working on behalf of the firm instead of independently collecting information and selling it to the firm.
Can the arrangement be explained accurately to a consumer? If consumers would reasonably believe they are contacting one specific firm when, in reality, they are entering a legal marketplace or routing system, the program may present substantial risk.

The easiest way to understand the overall distinction is that a law firm may buy media and marketing labor, but it should not buy people. Though that sentence does not replace a proper legal analysis, it provides firms and agencies with a useful starting point when reviewing their current marketing programs.

Are Existing Lead-Generation Contracts Grandfathered?

SB26-174 applies to conduct occurring on or after August 12, 2026, and the law does not contain a general grandfather clause protecting existing contracts. Therefore, law firms should not assume that a contract signed before the effective date allows them to continue purchasing or receiving leads after the law takes effect.

For example, a firm may have entered into a one-year lead-generation agreement several months before SB26-174 was enacted. Even though the agreement itself was signed before August 12, any lead deliveries, payments, transfers of information, or other covered conduct occurring on or after that date may still be subject to the new law.

Any law firm or vendor with an agreement extending beyond August 12 should have Colorado counsel review the contract before performance continues. The review should include any remaining payment obligations, the way consumer information is gathered and transferred, the vendor’s compensation structure, and whether the arrangement can lawfully be converted into traditional firm-identified marketing.

What Are the Penalties for Violating SB26-174?

The potential consequences of violating SB26-174 are significant. An affected consumer, attorney, law firm, or licensed legal paraprofessional may bring a civil action against an alleged violator. Available relief can include an injunction, statutory damages of $10,000 for each violation, and reasonable attorneys’ fees and costs.

Additionally, the statute allows the Colorado attorney general or a district attorney to bring a criminal action when the conduct involved also constitutes a crime under Colorado law. The law specifically references criminal impersonation, fraud, racketeering, and other criminal conduct. This does not mean that every violation of SB26-174 will automatically result in criminal liability. Rather, it means that a deceptive or fraudulent lead-generation operation may create exposure extending well beyond an ordinary dispute over advertising practices.

Law firms and marketing providers should also be aware of Colorado H.B. 26-1421, known as the Colorado Legal Practice Integrity and Fee-Sharing Prohibition Act. Governor Polis signed that law on June 4, 2026. Among other things, it restricts certain arrangements involving nonlawyer fee sharing, alternative business structures, and compensation tied to legal fees, recoveries, settlements, or case outcomes.

Consequently, even if a marketing arrangement does not clearly fall within SB26-174, it may still raise concerns under H.B. 26-1421, the Colorado Rules of Professional Conduct, or another applicable law. Firms should look at the entire relationship and not simply whether the vendor calls its product advertising, lead generation, intake, consulting, or something else.

Frequently Asked Questions About Colorado SB26-174

Does Colorado SB26-174 ban legal marketing agencies?

No. Marketing agencies may continue working on behalf of Colorado lawyers, law firms, and licensed legal paraprofessionals. The attorney, firm, or licensed legal paraprofessional whose services are being marketed must be clearly identified in the advertising, marketing materials, information, or resources. Furthermore, the agency should receive compensation for the marketing services it provides, rather than for supplying information about individual potential clients or cases.

Can Colorado law firms still use SEO and PPC advertising?

Yes. The law specifically identifies search engine optimization and pay-per-click internet advertising as forms of traditional legal marketing. As long as the law firm advertising its services is clearly identified to the consumer and the arrangement otherwise complies with applicable law, firms may continue using SEO and PPC to build their visibility and attract prospective clients.

Can a Colorado law firm buy exclusive leads?

The statute does not provide an exception for exclusive leads. If a law firm pays a third party to receive information about a potential client or case, the arrangement may fall within the prohibited definition regardless of whether the vendor sells that information to one firm or several. The fact that a lead is exclusive may improve its quality or value, but it does not necessarily make the purchase lawful.

Are subscription-based legal lead programs allowed?

Not simply because the vendor charges a subscription instead of a per-lead fee. Subscription models are expressly included in the statute when a firm is paying a third party to receive information about potential clients or cases. Therefore, firms should look at what the subscription actually provides, rather than relying on the name given to the pricing model.

Can law firms advertise through social media, podcasts, or direct mail?

Potentially, yes. The statute’s examples of traditional legal marketing are not presented as a closed list, which means a channel is not automatically prohibited merely because it is not specifically named. Social media, podcasts, email, print, and direct mail may remain available when the specific law firm is clearly identified and the campaign is conducted on its behalf. Other laws and rules governing attorney advertising, solicitation, privacy, and communications will still apply.

Can a law firm use an out-of-state lead vendor?

The fact that a lead vendor is located outside Colorado does not create an obvious exception to the statute. SB26-174 expressly addresses indirect compensation and payments routed through intermediaries, affiliates, and other entities. If a Colorado law firm is paying to receive potential-client or case information, it should speak with qualified counsel before assuming that the vendor’s location places the arrangement beyond the law’s reach.

May a legal directory charge a Colorado firm for a listing?

Yes. A legal directory may generally charge a firm for advertising placement, an enhanced profile, or increased visibility, as long as the lawyer or law firm is clearly identified. The arrangement becomes significantly riskier when the directory charges according to the number of contacts, calls, inquiries, matches, or consumer records it delivers to the firm.

Ultimately, SB26-174 does not prevent Colorado attorneys from competing online, advertising their services, or working with experienced legal marketing professionals. It does, however, require a more direct and transparent relationship between the law firm, the company marketing on its behalf, and the consumer who may need legal representation.

Accel Marketing Solutions, Inc. helps attorneys and law firms build firm-branded digital marketing strategies centered on establishing and improving their own online presence. If your firm is moving away from purchasing third-party leads and toward SEO, website content, and direct digital visibility, contact Accel Marketing Solutions, Inc. today to discuss your marketing goals and learn more about how our team may assist you. For legal advice concerning SB26-174 or any individual vendor relationship, you should consult qualified Colorado counsel.

Colorado SB26-174: What Law Firms and Legal Marketing Agencies Need to Know