A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 29 TO TITLE 1, CHAPTER 1 SO AS TO PROHIBIT A LAW FIRM THAT EMPLOYS A MEMBER OF THE GENERAL ASSEMBLY, OR AN IMMEDIATE FAMILY MEMBER OF A MEMBER OF THE GENERAL ASSEMBLY, FROM ENTERING INTO A LITIGATION RETENTION AGREEMENT WITH A PUBLIC ENTITY IN THIS STATE.
H. 5741 would add a new Article 29 to Title 1, Chapter 1 of the South Carolina Code to restrict certain litigation-retention arrangements involving public entities. The bill bars any public entity in the state from entering into, approving, renewing, extending, or materially amending a litigation retention agreement with a “covered law firm” if that firm employs a member of the General Assembly or an immediate family member of a member. The restriction applies during the legislator’s time in office and for one year after leaving office.
The bill also prohibits a covered law firm from receiving any direct or indirect compensation tied to a prohibited litigation retention agreement, including attorney’s fees, contingency fees, referral fees, co-counsel fees, local counsel fees, subcontract payments, settlement-related fees, and expense reimbursements, with a narrow exception for reasonable costs approved before the legislator’s election and employment by the firm. “Covered law firm” is defined broadly to include many ownership and compensation relationships, and “public entity” includes state agencies, local governments, school districts, special purpose districts, and other political subdivisions.
If enacted, the bill would create a new ethics-style restriction in state law governing how public entities may hire outside counsel for litigation. It would limit the ability of law firms with current legislative ties, or ties through immediate family members, to contract with government bodies and would prohibit payment under such arrangements. The measure would affect public agencies, local governments, school districts, and law firms with legislative connections, and it would add a new compliance requirement for public contracting and legal procurement practices.
The available record shows the bill was introduced and referred to the House Committee on Judiciary, but there are no recorded committee transcripts or votes in the provided materials. Based on the bill text and caption, the measure appears aimed at preventing conflicts of interest and limiting perceived self-dealing in public litigation contracts. Because no debate or vote history is available, the broader political sentiment cannot be measured directly from the record, though the proposal is framed in a reform-oriented way.
The main point of contention likely concerns the breadth of the prohibition and how it reaches firms with any legislative or family connection, even where the legislator may not be involved in the matter. The bill’s expansive definition of “covered law firm” and its inclusion of indirect compensation, referral arrangements, and post-service restrictions could raise concerns about overbreadth, business disruption, and unintended effects on law firms and public entities. Supporters would likely emphasize transparency and conflict-of-interest prevention, while opponents may argue the measure is too restrictive or difficult to administer.