The District of Columbia Bar Association has approved the adoption of cryptocurrency legal fees in Washington.
According to Bloomberg, lawyers working in Washington got the right to accept cryptocurrency as payment for their services, the District of Columbia Bar Association said in its ethical opinion. The association recognized the volatile nature of cryptocurrencies and noted that the fairness of such a payment mechanism to a client should be assessed at the time of payment.
In conclusion, the IRS considers cryptocurrency to be property rather than currency for tax purposes, and agrees that “payment in cryptocurrency is more like paying for goods than paying in fiat.”
U.S. law firms are increasingly accepting cryptocurrencies as payment for services, despite the risk and volatility associated with the market. Bar Associations of North Carolina, Nebraska, and New York previously issued advisory opinions in favour of accepting cryptocurrencies as a payment method.
According to ethical standards, the fees of lawyers should be reasonable, but they do not exclude the possibility of accepting “potentially volatile assets” as payment. Examples of such a payment include corporate stocks, property, and cryptocurrencies.
Lawyers accepting an advance payment in cryptocurrency obey the ethical rule 1.8 (a), which requires reasonable agreement with the conditions explained to the client in writing and fair to him. According to experts, when it comes to agreements on these payments, the conditions may include a clear explanation of how the client will be billed, whether the increase in the price of the cryptocurrency changes the obligations of each of the parties, and who will take the commission on the transfer of the cryptocurrency.
The client should also have the opportunity to discuss the transaction with another lawyer, and the lawyer must receive the written informed consent of the client for the payment. Lawyers accepting payment in cryptocurrency for future work should be familiar with the technologies for protecting the client’s virtual property since the lawyer will store all advance payments, which “requires the lawyer to understand the technology of protecting cryptocurrencies from theft”. The conclusion of the Association says:
“Cryptocurrency is ultimately just a relatively new means of transferring economic value, and the rules are flexible enough to protect clients’ interests and property without giving up technological advances.”
Cryptocurrencies are increasingly being accepted to pay various fees. At the beginning of the year, the authorities of Zermatt, a municipal district of Switzerland, allowed to pay taxes in bitcoins with the support of the Swiss cryptocurrency company Bitcoin Suisse. Last spring, California state lawmakers introduced a bill proposing to allow companies producing and selling marijuana to pay taxes using stablecoins.