Accepting bitcoin for payment of legal services: is it ethical?

Byline: Nicole Black

Unless you've been living under a rock, you've no doubt heard a lot of buzz about bitcoin. This is because bitcoin is increasingly being accepted as a form of payment for all types of goods and services, including legal services.

However, as tends to be the case whenever lawyers delve into a new way of doing things, ethical issues can be triggered. That's certainly the case when it comes to accepting bitcoin as payment for legal services.

Fortunately, one jurisdiction has weighed in on the issue thus far, and it concluded that it's ethical for lawyers to accept bitcoin payments as long as certain conditions are met.

In October 2017, the Nebraska Ethics and Advisory Committee handed down Opinion 17-03. The committee opined that attorneys "may receive and accept digital currencies such as bitcoin as payment for legal services." However, the committee acknowledged that bitcoin cryptocurrency can be somewhat volatile, and thus explained that because lawyers are prohibited from charging unreasonable fees for legal services, they should take the following actions to mitigate the risk of volatility and possible unconscionable overpayment for services:

"1. Notifythe client that the attorney will not retain the digital currency units but instead will convert them into U.S. dollars immediately upon receipt;

Convertthe digital currencies into U.S. dollars at objective market rates immediately upon receipt through the use of a payment processor; and

Credit the client's account accordingly at the time of payment."

However, notably, the committee explained that its determination was based on the fact that "bitcoins are property rather than actual currency, (and thus) bitcoins cannot be deposited into a client trust account"

One commentator has suggested that the Nebraska conclusion that bitcoins are property, not currency, was thrown into doubt earlier this year in The State of Florida v. Michell Espinoza. In that case, Florida's Third District Court of Appeals considered whether cryptocurrency constituted a "payment instrument" in the context of a money laundering prosecution. The court concluded that bitcoins are a "payment instrument," explaining that "there is no plausible interpretation of 'monetary value' or 'payment instruments,' as those terms are used in Chapter 560 that would place bitcoins outside of the...