In a recent ethics advisory opinion, the Nebraska Supreme Court Advisory Committee declared that attorneys may accept digital currencies such as Bitcoin as payment for legal services, but must immediately convert the currency into U.S. dollars.
The opinion is the first by a state ethics body to consider how the ethics rules apply to lawyers accepting this controversial form of currency.
The fluctuating exchange rate of digital currency implicates ethics rules related to the reasonableness of attorney’s fees. The value of Bitcoin, for example, fluctuates as much as ten percent per day. This volatility in value presents the potential for overpayment for legal services.
To combat this risk, the opinion outlines three steps attorney’s must take when accepting payment in digital currencies: (1) notify the client that the payment will be immediately converted to U.S. dollars, (2) make the conversion through a payment processor, and (3) credit the client’s account at the time of payment. The opinion further advises attorney’s to be “careful to see that [digital currency] is not contraband, does not reveal client secrets, and is not used in a money-laundering or tax avoidance scheme; because convertible virtual currencies can be associated with such mischief.”
Read the full opinion here.
