Digital Currency and the Legal Profession

Digital Currency and the Legal Profession

Economies worldwide are witnessing a shift from paper currency to virtual methods such as digital wallets, tokens, and cash apps. This impact has led to people increasingly opting for cashless transactions, relying on plastic money for even small purchases.

Despite some hesitancy in the legal industry towards virtual transactions for billing purposes, finances are still handled with the utmost care by lawyers. A high proportion of the settlements, billing and fees are being paid through paper cheques, and lawyers want it to be a fool-proof process without any ambiguities, since the number of funds may be very high. The rapidly rising legal industry is reluctant to make use of plastic currency because of certain factors such as payment of service fees, technical glitches and cyber frauds, which occur now and then, making the payee prone to risk.

An article titled "How Blockchain Impacts the Legal Profession" was published on JDSupra in February 2023, wherein the author explores different applications of Blockchain technology in the legal sector. The utilisation of Blockchain extends beyond financial transactions, such as receiving payments for provided services and encompasses areas such as smart contracting and eDiscovery. According to the article, “Blockchain technology can increase the security of transactions. Transfers made on the blockchain are faster and more traceable than traditional banking transactions. The elimination of intermediaries can also lower costs, making it easier to transfer funds around the world. New platforms that facilitate transactions via blockchain technology are already emerging and present a credible alternative to existing financial services.”

Handle Finances with care

In the legal profession, finance is one thing that is handled with the utmost care by lawyers. The convenience fees charged by the banks or the servers through which the payments are made are some of the main concerns of lawyers concerning digital payments. Moreover, different operators charge different rates of convenience fees. Also, one big risk is involved in banking frauds and certain allied threats which occur largely nowadays.

As people move towards paperless transactions, it will become inevitable for attorneys to also accept digital modes of payment. In our February 2022 article “Legal Technology: Trends and Predictions by Gartner”, we discussed how the investment and adoption of legal technology continue to rise in the legal industry. In the long run, using technology, by all means, will be cost-saving, and more efficiency will be seen.

The COVID-19 pandemic has increased the use of digital payments, but the focus now is on enabling lawyers to shift towards paperless transactions. Not only would this help in transactions taking place faster, but also provide clients with flexibility via payment. Headnote, a company involved in legal payments, has observed that when invoices are raised through platforms, 84% of them are cleared within a week. Not only this, but it will also lead to a steady cash flow for the attorney/firm.

Virtual money beyond plastic

The legal industry has seen a positive change with the establishment of virtual offices globally. Attorneys from anywhere in the world are working remotely for clients, and with this has come the exchange of cryptocurrency being used for paying lawyer’s fees. There is no concrete proof to substantiate the claim. Thus, crypto, when paid, is considered to be property and not money, so the equivalent value of the crypto is encashed, and the difference is paid back to the client. Moreover, the plus point being offered by crypto is that no additional charges are levied on cross-border transaction charges and provide ease of access.

According to a study conducted by Chainalysis, several emerging markets rank high on the index due to large transaction volumes on P2P platforms. 

New age mode of transaction

While crypto is becoming the new age mode of transaction and being widely accepted, it has its risks involved. Many states around the world have yet to form any law regulating the use of crypto.

In conclusion, the new age mode of financial transactions has revolutionised the way we conduct monetary exchanges. With the advent of digital currencies, mobile payments, and blockchain technology, financial transactions have become more secure, efficient, and accessible than ever before. As we continue to advance technologically, we can expect the emergence of even more innovative solutions. It is an exciting time, and everyone expects to witness the continued evolution of these transformative technologies.

Also read top viewed Ai Legal article: The Role of AI in Legal Research and 1 in 3 Aussie Crypto Owners Likely To Switch Banks

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