Cryptocurrency fees raises the alarm


By Dr David Cowan

07 November 2019 at 07:56 BST


Firm accepts bitcoin while advocacy groups and lawyers raise concerns of criminality and ethics, but they are not the first.

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One of the biggest business litigation law firms Quinn Emanuel Urquhart & Sullivan, which has long advocated creative fee structures, said it is now accepting fee payments in bitcoin and in other cryptocurrencies.

Comfortably adapting

The announcement comes just one week after the firm received its first cryptocurrency fee payment via Bitpay. “As a global law firm with multiple fintech clients, we are very comfortable in adapting to - and adopting - new currencies and forms of payment,” said founding partner John B Quinn. With over 800 lawyers, Quinn Emanuel brands itself as the biggest firm in the world devoted solely to business litigation, with 23 global office locations housing lawyers who have tried over 2,300 cases, winning 88 percent of them. Recently the firm was one of the advisers to advertising boss Sir Martin Sorrell during WPP’s investigation into allegations that he had misappropriated company funds, which he denied.  “We want to be flexible for our clients. Bitcoin is an easy and secure way to transfer funds, and we embrace it.” He said that while many law firms have balked at allowing payments by virtual currencies, the payments are transparent and instantaneous owing to blockchain verification, stating that blockchain transactions are becoming an increasingly widespread form of doing business.

Alarm bells

Anti-corruption campaigners and other lawyers have raised alarm that this may pave the way for criminal money laundering due to potential difficulties with tracing the source of funds. Speaking to the UK Daily Telegraph newspaper, Ava Lee, a campaigner at transparency advocacy group Global Witness, said “As probably best exemplified by the Panama Papers the law industry is one of the most susceptible and at risk of enabling the laundering of suspicious funds,” arguing “The jury is still out as to whether cryptocurrencies make it significantly easier to launder money but there have certainly been a number of cases where cryptocurrencies have been used for this kind of criminal activity.” A magic circle law firm partner told the paper, “Ascertaining whether the client itself or a third party is paying the fees is a core ethical obligation,” and suggesting funds received in bitcoin are at greater risk of being derived from criminal activity and could also present several other regulatory and ethical issues. Mr Quinn retorted. “Back in the early ‘70s, some law firms were afraid to accept fee payments by credit card. What seems strange at first is often quickly adopted”.

Not the first

This announcement may be notable, but it is not the first. Back in May 2014, New York-based McLaughlin & Stern, one of the oldest US law firms, founded in 1898, said it believed it had become the first major US legal practice to accept virtual currency. Michael Paradise, a member of the firm’s executive committee, said then “We believe it is important that if we want to be on the cutting edge of the law and technology, we must adapt and apply the law to these new technologies. By accepting bitcoin, we hope to demonstrate that there is no tension between innovation and prudence. The best companies in this space that we engage with are especially sensitive to complying with the law and we have been there to help guide them in the process.” In September 2017, ethics board the Nebraska Lawyers’ Advisory Committee, an eight-member body appointed by the state’s Supreme Court, was the first to clarity on cryptocurrency, including in the specifications of the ruling that recipients must immediately convert the cryptocurrencies to US dollars and all for the use of multi-signature wallets when holding funds in escrow.

 
   
 
 
 

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