D.C. Bar Allows Payment of Fees by Cryptocurrency

  The District of Columbia Bar recently approved payment of legal fees in cryptocurrencies but with a cautionary note that the exchanges must be fair and secure.

   The D.C. Bar opinion said there is no reason for Bitcoin and other cryptocurrencies to be considered "a uniquely unethical form of payment."

   However, the opinion also noted that widely fluctuating values for cryptocurrencies could make them problematic for properly assessing legal fees.

   "The nature of digital currency — as a new technology, a volatile alternative currency or asset, or client property — raises ethical challenges for lawyers that simply do not exist with fiat currency," the bar opinion said. "But lawyers cannot hold back the tides of change even if they would like to, and cryptocurrency is increasingly accepted as a payment method by vendors and service providers, including lawyers."

   Valuations of the legal services are particularly a concern for advance payments, the bar opinion said.

   Washington-area law firms now accepting cryptocurrency payments include Quinn Emanuel, Perkins Coie LLP and Steptoe & Johnson LLP.

   In addition to a fair value assessment, lawyers must explain “the nature of a client's particularized financial risks, in light of both the agreed fee structure and the inherent volatility of cryptocurrency," the bar said.

   The opinion warned against risks of loss for the payments.

   "Because blockchain transactions are unregulated, uninsured, anonymous, and irreversible, cryptocurrency is regularly targeted for digital fraud and theft," the bar said.

For more information, contact The Legal Forum (www.legal-forum.net) at email: [email protected] or phone: 202-479-7240.