Avenatti had floated the possibility of a presidential run, going so far as to make trips to early voting states.
But on Tuesday he said he has decided not to run after consultation with his family.
"But for their concerns, I would run," Avenatti said on Twitter.
Please see my statement below regarding 2020. pic.twitter.com/ztCfZUY6hA— Michael Avenatti (@MichaelAvenatti) December 4, 2018
Avenatti has also had a difficult few weeks.
He was arrested on suspicion of domestic violence last month in Los Angeles, although the District Attorney's Office later declined to prosecute the incident as a felony. The case was referred to the City Attorney's Office, which is still reviewing it for possible misdemeanor filing.
An aspiring actress named Mareli Miniutti filed for a temporary restraining order against Avenatti, claiming they had been living together and they got into an argument over money which turned physical. Avenatti has denied striking any woman and said he would be exonerated.
Avenatti represents Daniels in a case involving her attempt to break a non-disclosure agreement with President Donald Trump signed days before the 2016 election.
Daniels alleges she had a one-night affair with Trump in 2006 and was paid $130,000 to keep quiet about it. Trump has denied the affair but essentially acknowledged making the payment to Daniels.
Avenatti lost a defamation case against Trump and the president's attorneys this week asked a court for nearly $800,000 in lawyers' fees and penalties for the failed suit.
In his statement, Avenatti also said:
"I will continue to represent Stormy Daniels and other against Donald Trump and his cronies and will not rest until Trump is removed from office, and our republic and its values are restored. I will also continue with my nearly 20 years of speaking truth to power and representing those who need an advocate against the powerful."
"I remain concerned that the Democratic Party will move toward nominating an individual who might make an exceptional president but has no chance of actually beating Donald Trump. The party must immediately recognize that many of the likely candidates are not battle-tested and have no real chance at winning. We will not prevail in 2020 without a fighter. I remain hopeful the party finds one."