ICOs have been the talk of the town as far as startup funding is concerned. The need for legal services is an integral part of Initial Coin Offering. A report says that more startup lawyers are now receiving their payments in cryptocurrencies as the demand for ICO related services surge. These lawyers go for this option because most times this is the only funds that founders of the company has.
Digital coins such as Bitcoin have been instrumental in a new class of wealth and some of these owners are setting up businesses are offering digital currencies as forms of payment to lawyers. Some of these lawyers now have no option than to accept these cryptocurrency payments so as not to lose the deals. Another reason the lawyers are accepting coin payments may be to show that they believe in the projects hiring them for consultation.
There is, however, a concern about lawyers receiving payments for services in cryptocurrencies from companies because the belief is that it would not create the condition for an unbiased counsel to their clients. When a client pays in a token that is in development for instance, wouldn’t the lawyer be compelled to be emotionally attached to the project to ensure that it succeeds even it breaches certain regulations? If there are grey areas, would they give unbiased counsel to ensure that the ICO does what is appropriate even if that may hinder the success of the token?
What is happening with ICO is reminiscent of the dot.com rush of the 90’s when services were paid for inequities. This situation made some service providers wealthy while many others incurred losses. A lawyer who accepted payment in bitcoin last January, for instance, would have made a lot of profit due to the higher prices of bitcoin, but it is uncertain if most of the lawyers accepting cryptocurrency payments are leaving their money in digital currencies. Most convert to fiat to reduce risks due to the volatility of crypto.
Some legal firms have taken note of digital currencies and are already accepting them. Firms such as Perkin Cole and Steptoe & Johnson said that they have been accepting payments in bitcoins for years. Some lawyers have misgivings about the source of the crypto funds and would prefer to do some background checks that they were not proceeds of criminal activities such as narcotics and money laundering before accepting the payments. A number of lawyers interviewed have no issues with accepting cryptocurrencies, except the complaints about its volatility.
The state of Nebraska has in their professional ethics for lawyers, a rule that says that a lawyer may not charge their clients such fees that shall be deemed unreasonable. The state was the first to give a nod at crypto payment for lawyers. In handing down the ruling, the Lawyer’s Advisory Committee stated that lawyers could charge fees in cryptocurrencies, but that they should immediately convert the digital currencies to the dollar to avoid the effect of coin volatility.