Jim Verdonik founder of Innovate Capital Law
(This article is slightly a longer version of an article that was originally published in Triangle Business Journal June 15, 2018)
Back in January this newspaper asked me to predict what would happen to Cryptocurrency in 2018.
It’s almost mid-year. How are my predictions faring?
I’m giving myself an A. Here are the predictions I made and the current reality:
- Be careful about high Coin prices. A Bitcoin was around $16 thousand at the time I wrote my January article. It’s about half that now. Giving myself a B+
- Token offerings that comply with SEC regulations will replace unregulated ICOs. Many Crowdfunding platform websites have opened SEC compliant Token and Coin offerings. I get an A.
- Coins and related blockchain will be entering daily life on Main Street. Several hundred thousand Coin accounts have been opened by North Carolina residents on a single leading Coin exchange. These accounts hold over $300 Million of Coins.
- More business will be accepting Coins as payments for products and services. My law firm recently announced that it will be the first large North Carolina law firm to accept Bitcoins in payment for earned legal fees.
The last item might the most startling. 100+ person law firms traditionally have not been early adapters of much of anything. Lawyers tend to lag the accounting profession by about ten years in adapting to business trends.
So, why is Ward and Smith taking a leadership role on Coins and Tokens?
It’s simple. We have lots of Coin related clients. Good lawyers learn from our clients. Our clients are teaching us about their industry. Here are some of the many ways we have been experiencing the Coin world through our clients.
- Raising money to finance a very large Coin Mining operation.
- Securitized Token Offering (STO) for a blockchain energy company
- Creating Smart Contracts for Post-Offering Automated Stock Transfers
- Representing a coin exchange on Regulatory Issues
- Securitized Token Offering (STO) for real estate investment fund
- Advising a software developer about planning an SEC compliant ICO
- Advising financial institutions about Coins and blockchain strategies
What we have learned from our clients is that Coins and blockchain are permeating virtually all business sectors. We want to play an even bigger role in Coin related industries as they grow.
To do that, we’re willing to put our money where our mouths are and start accepting Coins as payment for legal fees.
I think this is like websites. In 1990 no law firm had a website. Now every firm does.
So, we decided we owe it to our Coin and blockchain clients to be the first instead of the last to accept payment in Bitcoin.
We also decided to lead the legal profession down this road by analyzing how legal ethics rules apply to law firms accepting Coins in different circumstances. Sharing this insight with others will allow other law firms that know less about the Coin space to follow in our footsteps.
Just accepting payment for fees that have already been earned is pretty simple. But lawyers’ trust accounts are a more complicated matter. Then, we’re holding the client’s money. There are lots of ethics rules about lawyers’ trust accounts. Lawyers who want to comment about how the ethics rules should apply to Coins can see the ethics opinion request I filed with the NC Bar at http://ncbarblog.com/2018/06/add-your-two-cents-the-ethics-of-serving-clients-who-use-coins-and-digital-assets/
So, why are we helping our competitors navigate this space?
Because it’s good for our community when the legal profession leads rather than lags behind.