Can a New York lawyer require a client to pay legal fees in cryptocurrency like Bitcoin?
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This page answers the general question as of 2019. Ezel answers yours: whether it's allowed on your facts, under the current New York Rules of Professional Conduct, with citations.
Plain-English summary
The opinion addresses whether a lawyer may require a client to pay legal fees in cryptocurrency. It concludes that such an agreement is subject to Rule 1.8(a) of the New York Rules of Professional Conduct if the client expects the lawyer to exercise professional judgment on the client's behalf in negotiating the agreement, in which case the lawyer must comply with Rule 1.8(a)'s procedural requirements.
The opinion treats payment in cryptocurrency as a business transaction with the client, rather than an ordinary fee paid in currency, because of cryptocurrency's volatility and the surrounding uncertainties. The opinion notes that if the cryptocurrency market later reaches a threshold level of stability similar to other regulated currencies, the analysis may change.
Rule 1.5(a)'s requirement that fees be reasonable continues to apply. The Rule 1.8(a) procedure layers on top: the transaction's terms must be fair and reasonable and fully disclosed in writing in a manner the client can understand, the client must be advised in writing of the desirability of seeking independent counsel and given a reasonable opportunity to do so, and the client must give informed consent in a signed writing to the essential terms and the lawyer's role.
In practice
Under this opinion, as the New York rules stood at the time, a lawyer who conditions representation on payment in cryptocurrency, where the client looks to the lawyer's professional judgment in striking the deal, must run the arrangement through Rule 1.8(a)'s business-transaction requirements and keep the overall fee reasonable under Rule 1.5(a). The opinion ties its business-transaction characterization to the current volatility of cryptocurrency and flags that a more stable market could alter the analysis.
Common questions
Q: Can I require my client to pay me in Bitcoin?
A: The opinion does not prohibit it, but treats it as a Rule 1.8(a) business transaction with the client when the client expects the lawyer to exercise professional judgment in negotiating the agreement, requiring compliance with that rule's protections.
Q: Why is paying in cryptocurrency different from paying in dollars?
A: The opinion concludes that, given cryptocurrency's volatility and surrounding uncertainties, an agreement to take fees in cryptocurrency is a business transaction with the client rather than an ordinary cash fee, and notes the analysis may change if the market stabilizes.
Q: Does the fee still have to be reasonable?
A: Yes. The opinion confirms Rule 1.5(a)'s reasonableness requirement applies to the fee in addition to the Rule 1.8(a) procedural requirements.
Background and rules framework
The opinion interprets New York Rules of Professional Conduct that track the ABA Model Rules: Rule 1.8(a) (business transactions with a client, requiring fair terms, written disclosure, advice to seek independent counsel, and informed written consent) and Rule 1.5(a) (reasonable fees). The opinion applies the business-transaction rule to a then-novel payment medium.
Citations and references
Rules of Professional Conduct:
- MR / NY RPC 1.8(a) (business transactions with a client)
- MR / NY RPC 1.5(a) (reasonable fees)
See also
- NYC Bar Ethics Op. 2015-2: Nonrefundable monthly fee in a retainer agreement
- NYC Bar Ethics Op. 2014-3: Charging a client's credit card
Source
- Landing page: https://www.nycbar.org/reports/formal-opinion-2019-5-requiring-cryptocurrency-in-payment-for-legal-services/
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