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Ethics Opinion 378

Acceptance of Cryptocurrency as Payment for Legal Fees

It is not unethical for a lawyer to accept cryptocurrency in lieu of more traditional forms of payment, so long as the fee is reasonable. A lawyer who accepts cryptocurrency as an advance fee on services yet to be rendered, however, must ensure that the fee arrangement is reasonable, objectively fair to the client, and has been agreed to only after the client has been informed in writing of its implications and given the opportunity to seek independent counsel. Additionally, a lawyer who takes possession of a client’s cryptocurrency, either as an advance fee or in settlement of a client’s claims, must also take competent and reasonable security precautions to safeguard that property.

Applicable Rules

  • Rule 1.1 (Competence)
  • Rule 1.5 (Fees)
  • Rule 1.8 (Conflict of Interest: Specific Rules)
  • Rule 1.15 (Safekeeping Property)


Cryptocurrency is a virtual asset—digital money—that exists only in electronic form. It is completely decentralized, meaning there is no controlling authority, and it is not issued by any government or backed by any tangible security or real estate. Instead, cryptography (mathematical algorithms that are used to encode and decode information) controls the creation of new “coins” of a particular cryptocurrency and secures and records transactions. The resulting data is maintained in a virtual transaction ledger called a “blockchain,” which is distributed to every computer on that cryptocurrency’s network. The blockchain is a continually-expanding chronological record of transactions; it is comprised of “blocks” of information that include the source of cryptocurrency being transacted, its destination, and a date/time stamp. The most well-known cryptocurrencies are Bitcoin and Ethereum, but there are thousands of others.

Cryptocurrency, once acquired, may be spent like currency or held as an investment asset, like gold. Its algorithmic existence is “stored” in digital “wallets” maintained by online platforms (“hot wallets”) or offline on a computer’s hard drive, a USB port, or even paper (“cold wallets”). A cryptocurrency wallet also stores private and public keys, which are strings of alphanumeric characters that enable their holder to receive or spend cryptocurrency. The public key is shared to allow others to send currency to a wallet. The private key allows its holder to access her wallet by writing in the public ledger, effectively spending the associated cryptocurrency.

The U.S. Internal Revenue Service (IRS) describes “virtual currency,” i.e., cryptocurrency, as “a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value.”1 Based on this definition, the IRS treats cryptocurrency as property rather than currency for U.S. federal tax purposes. And, despite having no physical existence and being “spendable” like money, cryptocurrency does seem similar to a commodity such as gold in that its exchange value is tied directly to market demand. But cryptocurrency as an asset is far more volatile than gold—one Bitcoin, for example, was worth $5,647.53 on September 19, 2017; $17,056.55 on December 11, 2017; $7,826.99 on February 5, 2018; $3,295.27 on December 10, 2018; and $10,241.35 on September 9, 2019.2

The nature of digital currency- as a new technology, a volatile alternative currency or asset, or client property- raises ethical challenges for lawyers that simply do not exist with fiat currency. But lawyers cannot hold back the tides of change even if they would like to, and cryptocurrency is increasingly accepted as a payment method by vendors and service providers, including lawyers.3 Accordingly, the Committee provides this Opinion to assist lawyers who accept or even require payment of fees or settlement in cryptocurrency (or whose clients do) to meet their ethical obligations.

  1. Reasonableness of the Fee Arrangement

Rule 1.5(a) states that “[a] lawyer’s fee shall be reasonable.” The rule includes a list of factors to be considered in determining the reasonableness of a fee, most of which concern the nature of the representation, the attorney’s level of experience, and the client’s needs and sophistication. Only two enumerated factors explicitly mention fees: whether the lawyer’s fees are consistent with the customary rates charged in that locality for similar services,4 and whether a fee is fixed or contingent.5

Rule 1.5(a) does not address terms of payment, and there is nothing in the “reasonableness” standard that prohibits lawyers from accepting potentially volatile assets as payment for fees; indeed, Comment 4 to Rule 1.5 states that “[a] lawyer may accept property . . . such as an ownership interest in an enterprise,” as payment. Moreover, this Committee has previously acknowledged that a lawyer may accept an ownership interest in a client, including shares of corporate stock, as an advance payment on services to be rendered. See D.C. Bar Legal Ethics Opinion 300 (July 2000).6

Opinion 300 is particularly helpful in framing the reasonableness analysis applicable to digital currency. In that opinion, the Committee addressed the question of whether a lawyer could serve as part-time general counsel to a limited liability company in exchange for a 20% interest in the company and a share of future profits. We noted that “the pertinent question” was not “whether such a fee arrangement is ethical in principle; it clearly is. Rather, the question is whether a particular ownership-in-lieu-of-fees arrangement is ‘reasonable,’ which calls for an analysis of reasonableness factors similar to that we have described in prior opinions.” Id. (emphasis added). We emphasized that a lawyer’s disclosures and explanation of the risk of paying advance fees in stock would be particularly relevant, as we “had no doubt that reasonableness would be measured, at least in part, by the extent to which the client’s acceptance of the fee arrangement was informed by its understanding of [the] financial implications.” Id.

We conclude that payment of fees in cryptocurrency is more akin to payment in property than payment in fiat currency. The financial implications of paying for a lawyer’s services in a cryptocurrency will vary depending on the fee arrangement. A client who receives a bill for services rendered and elects to immediately transfer bitcoins to an attorney’s wallet can be certain of the value of the payment, while a client who pays a lawyer an advance for services to be performed cannot predict the value of that cryptocurrency in a week, much less a month or a year. Therefore, the reasonableness of a fee agreement involving cryptocurrency will depend not only on the terms of the fee agreement itself and whether or not payment is for services rendered or in advance, but also on whether and how well the lawyer explains the nature of a client’s particularized financial risks, in light of both the agreed fee structure and the inherent volatility of cryptocurrency.

  1. Acceptance of Cryptocurrency Under Rule 1.8(a)

We agree with the conclusion of the New York City Bar Association’s Committee on Professional and Judicial Ethics that an agreement to accept an advance retainer in cryptocurrency, or an agreement requiring a client to pay future earned fees in cryptocurrency, is subject to Rule of Professional Conduct 1.8(a) governing business transactions with clients.7

The D.C. rule, like the New York rule, reflects the fiduciary nature of the lawyer-client relationship.8 It requires lawyers to ensure that all business dealings with clients are fundamentally fair, providing that:

(a)  A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security, or other pecuniary interest adverse to a client unless:    

(1) The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner which can be reasonably understood by the client;

    (2) The client is given a reasonable opportunity to seek the advice of independent counsel in the transaction; and

    (3) The client consents in writing thereto.

Like the New York City Bar, we do not believe Rule 1.8(a) is implicated when a client opts to pay attorney’s fees in cryptocurrency after receiving a bill, calculated in dollars, for fees already earned and costs incurred. An attorney may agree to accept the corresponding amount of cryptocurrency as a matter of client convenience without taking any special precautions beyond what is required by Rule 1.5 because this is a straightforward exchange involving no additional variables or special knowledge.

If, however, a lawyer and client agree that the client will provide cryptocurrency to be held by the lawyer as an advance fee against services to be performed, or if the lawyer’s fees will be calculated in cryptocurrency (e.g., the client agrees to pay one Bitcoin per month), then the lawyer and client are entering into a potentially adverse pecuniary relationship under Rule 1.8. This is because any such agreement necessarily involves considerable uncertainty about the future value of the cryptocurrency at the time the fee will be earned or, in the case of settlement, at the time the payments to third parties and the client will be made.

Rule 1.8(a), like Rule 1.5(a), requires a lawyer to adequately disclose the terms and implications of the fee arrangement, which must be reasonable. But Rule 1.8(a) goes significantly further: a lawyer who enters into a business relationship with a client must provide to the client written disclosure of the terms of the agreement and a reasonable opportunity to confer with independent counsel, and must obtain from the client written, informed consent to the agreement. Additionally, Rule 1.8(a) adds an independent ethical obligation to ensure that the fee arrangement is not only reasonable, but also “fair” to the client.

But at what point in the engagement is fairness to be determined? This question is particularly important when assessing the fairness of an agreement to accept and hold a volatile asset like cryptocurrency—or stocks, or future profits, or foreign currency—as advance fees for services not yet rendered. Once again, Opinion 300, concerning accepting stocks or partial ownership of a client in lieu of fees, is instructive:

Rule 1.8(a) and the commentary thereto are silent on how fairness is to be determined, and whether it is to be determined only by reference to facts and circumstances existing at the time the arrangement is accepted by the parties, or by reference to subsequent developments (for example, a huge appreciation in the value of the shares received as fees such that the lawyer is effectively compensated at 100-fold the reasonable value of his services). For ethics purposes (and not for purposes of assessing common law fiduciary duties), we believe that the “fairness” of the fee arrangement should be judged at the time of the engagement. In other words, if the fee arrangement is “fair and reasonable to the client” at the time of the engagement, no ethical violation could occur if subsequent events, beyond the control of the lawyer, caused the fee to appear unfair or unreasonable.

Opinion 300 at fn 5; see also Restatement (Third) of the Law Governing Lawyers § 126, comment e (2000) (“Fairness is determined based on facts that reasonably could be known at the time of the transaction, not as the facts later develop.”)

Applying these principles, any fee arrangement that calculates fees in cryptocurrency, or that allows or requires a client to either provide an advance fee or accept a settlement payment from a third party in cryptocurrency, should be assessed for fairness at the time that it is agreed upon, based on the facts then available. For so long as the value of digital currency remains predictably volatile, this is a fact the lawyer must ensure that his or her client understands.

The information that must be disclosed to a particular client in writing under Rule 1.8(a) will, of course, vary. As a general matter, in addition to terms concerning billing rates and frequency, a lawyer accepting cryptocurrency should consider including a clear explanation of how the client will be billed (i.e. in dollars or cryptocurrency); whether and how frequently cryptocurrency held by the lawyer will be calculated in dollars, or otherwise trued-up or adjusted for accounting purposes and whether, upon that accounting, market increases and decreases in the value of the cryptocurrency triggers obligations by either party; whether the lawyer or the client will be responsible for cryptocurrency transfer fees (if any); which cryptocurrency exchange platform will be utilized to determine the value of cryptocurrency upon receipt and, in the case of advance fees, as the representation proceeds (i.e., as fees are earned) and upon its termination; and who will be responsible if cryptocurrency accepted by the lawyer in settlement of the client’s claims loses value and cannot satisfy third party liens.9

  1. Competently Safeguarding Cryptocurrency

Rule 1.15(a) requires, among other things, that a lawyer “appropriately safeguard” the property of clients and third parties.10 Paragraph (e) addresses advance fees, and provides that “advances of unearned fees and unincurred costs shall be treated as property of the client pursuant to paragraph (a) until earned or incurred unless the client gives informed consent to a different arrangement,” and, that, even if the client does consent to a different arrangement,11 any unearned or unincurred portion of an advance fee must be returned upon termination of the lawyer’s services. See also Rule 1.16(d),12 These rules, of course, apply to all advance fees, regardless of how they are funded. But, as with issues related to valuation, safeguarding cryptocurrency raises unique challenges.

The first rule of professional conduct is that lawyers must provide competent representation to their clients. See Rule 1.1. Although the Comments to Rule 1.1 do not specifically reference technology, we agree with ABA Comment [8] to Model Rule 1.1 that, to be competent, “a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” Consistent with D.C. Bar Legal Ethics Opinion 371, which addressed lawyers’ use of social media, a lawyer must have the skill required to exercise reasonable professional judgment regarding the use of technology, including digital currency, within the lawyer’s legal practice.

In the case of cryptocurrency, competence requires lawyers to understand and safeguard against the many ways cryptocurrency can be stolen or lost. Because blockchain transactions are unregulated, uninsured, anonymous, and irreversible, cryptocurrency is regularly targeted for digital fraud and theft. For example, cryptocurrency online wallets and exchange platforms may be fraudulent; legitimate wallets and platforms may be subject to security breaches; and private keys used to transfer cryptocurrency out of a person’s wallet are vulnerable to network-based threats like hacking and malware if stored in a hot wallet (a device or system connected to the internet). Additionally, private keys that are stored in a cold wallet (hardware, offline software, or paper) can be irretrievably lost, in which case the associated digital currency is likely permanently inaccessible. Just as with fiat currency or any client property, a lawyer must use reasonable care to minimize the risk of loss. 


We do not perceive any basis in the Rules of Professional Conduct for treating cryptocurrency as a uniquely unethical form of payment. Cryptocurrency is, ultimately, simply a relatively new means of transferring economic value, and the Rules are flexible enough to provide for the protection of clients’ interests and property without rejecting advances in technologies. So long as the fee agreement between a lawyer and her client is objectively fair and reasonable (and otherwise complies with Rules 1.5 and 1.8), and the lawyer possesses the requisite knowledge to competently safeguard the client’s digital currency, there is no prohibition against a lawyer accepting cryptocurrency from or on behalf of a client.

Published: June 2020


1. I.R.S. Notice 2014-21, I.R.B. 2014-16 (Apr. 14, 2014).
2. Cryptocurrency’s volatility is related to many factors, including the relatively limited adoption of digital currency, small market size, risk of security breaches, and lack of regulatory oversight and institutional investment. See https://www.blackwellglobal.com/why-are-cryptocurrencies-so-volatile/ (last visited November 12, 2019).
3. According to a November 2019 article, Quinn Emanuel Urquhart & Sullivan, Perkins Coie, Steptoe & Johnson LLP, Frost Brown Todd, and “a slew of smaller firms as well as solo practitioners have embraced the payment structure” of cryptocurrencies. Samantha Stokes, Quinn Emanuel Says Clients Can Pay In Bitcoin, available at https://www.law.com/americanlawyer/2019/11/05/quinn-emanuel-says-clients-can-pay-in-bitcoin/?slreturn=20200016135954.
4. Rule 1.5(a)(3).
5. Rule 1.5(a)(8).
6. Indeed, Bar Associations across the country have long agreed that a lawyer may accept fees in stock or equity interest in a client so long as the lawyer ensures that the client fully understands the financial implications and the terms are objectively fair to the client. See ABA Op. 00-418 (July 7, 2000), "Acquiring Ownership in a Client in Connection with Performing Legal Services"); N.Y.C. Eth. Op. 2000-3.
7. N.Y.C. Eth. Op. 2019-5.
8. “Because a lawyer occupies a multifaceted position of trust with regard to the client . . . there is an ever present fiduciary responsibility that arches over every aspect of the lawyer-client relationship, including fees. Connelly v. Swick & Shapiro, P.C., 749 A.2d 1264, 1268 (D.C. 2000) (internal citations omitted).
9. The lawyer bears the burden of proving that the transaction was fair and the client was adequately informed, and ambiguities will be construed in favor of the client. See, e.g. In re Martin, 67 A.3d 1032, 1041 (D.C. 2013) (“[A]ny ambiguity in the [contingent fee] agreement would be interpreted against Martin, who drafted the agreement. See Capital City Mortg. Corp. v. Habana Vill. Art & Folklore, Inc., 747 A.2d 564, 567 (D.C. 2000) (stating that ambiguities in contracts will be ‘construed strongly against the drafter.’ ”)); ABA Opinion 00-418.
10. Rule 1.15(a) also requires that lawyers maintain trust funds to hold money belonging to clients or third parties. Because cryptocurrency has been designated by the IRS as property rather than money, and because it cannot be deposited into a trust fund without being converted to money, this requirement is not applicable.
11. Any “different arrangement” must be fair to the client. “At a minimum, a lawyer must explain to the client ‘the basis for this arrangement and . . . how [the client's] rights are protected by the arrangement.’” In re Mance, 980 A.2d 1196, 1207 (D.C. App. 2009), as amended (Oct. 29, 2009) (quoting In re Sather, 3 P.3d 403, 410 (Colo. 2000) (en banc)).
12. See also In re Mance, id. at 1202.