Summary: More lawyers are accepting Bitcoins from clients, but not for retainers.
Imagine being able to pay your lawyer with a cryptocurrency. Another lawyer has announced he will accept Bitcoin payments for his services, though he will still insist on regular money for his retainer. Michigan business and tax lawyer Donald Katz is the latest lawyer to jump on the Bitcoin wagon.
Virginia Law Firm Plans to Accept Bitcoin for Payment
Bitcoin is a digital form of currency that is more like property than currency since its value can change. For tax purposes, its fair-market value is calculated on the day it was received. When the Bitcoin payment is later spent, it’s at a capital gain or loss, depending on the market value at that point.
This is why the payment in Bitcoin must be for current services and not for future services like a retainer. A single Bitcoin has been valued between $300 and $1000 with it currently holding a market value of $375.
Bitcoin is a service like Paypal where money is sent between two parties. The transaction is irreversible unless one party chooses to send it back. It is cheaper to use than Paypal since the fee is based on the number of transactions and not the amount of the transaction.
While some countries do not allow Bitcoin, including China, it is a popular service around the globe. It has no central authority or middleman and is entirely powered by the users.
Read about Bitcoin in Money Laundering Operations.
Katz’s move to accept digital currency has three obvious upsides. The first is he may be able to attract clients who aren’t in the position to make traditional payments, but who happen to have a surplus of Bitcoin. (Many technology companies transact business solely in Bitcoin now). The second advantage is the value of Bitcoin may go up, resulting in more profits for the lawyer. And of course the third benefit is all of the free publicity he’s getting.
Source: ABA Journal
Additional sources: www.ocbar.org
Photo: rahulchand.net