Blockchain for Legal Issues: How Distributed Ledger Tech, Regulations and Lawyers See the Future
According to the American Bar Association, there are approximately 1,338,678 active attorneys in the United States, a figure that has grown exponentially since 1998 when it was a mere 985,921. While technological advancement has certainly aided the industry – moving it from being paper-based for research and writing – to computer-based, different advancements may also be working on changing the industry. Here are just some of the ways the technology is impacting the legal industry.
is certainly a scary word because it means that technology can take over a given task, mitigating the need for human involvement. Concerning automation in the legal industry, Mick Atton, a Vice President and Chief Architect at Thompson Reuters at Westlaw, recently appeared at a Legal Tech Boot Camp in 2018. There, he discussed the importance of blockchain technology in the legal industry and how legal professionals can adapt. Atton’s speech also touched upon the issue that even though cryptocurrencies like bitcoin have become a prominent use-case, there are businesses that working to deploy the technology as well.
The technology may be able to help businesses with smart contracts. As Atton explained,
“An example of this may be the serial renewal of a lease for real estate. There might be some termination clauses in commercial agreements in which you can automate the execution and invoke. These are repeated functions that don’t need a human to curate and manage.” To cope, Atton stated that lawyers may need to help work on developing the smart contracts. The technology may also be able to record legal events and terms of conditions over time. As Atton explained, “Perhaps one of the most novel ideas of blockchain was brought to me by a law school student. It was around this idea of fashion law and the ability for blockchain to record copyright of high-value fashion items, such as designer handbags. I had never considered an idea like that before.”
Initiatives In Law Firms
Law firms are also taking an initiative considering the boom in cryptocurrency and blockchain technology. Judith Rinearson, a partner at K & L Gates, discussed with Bloomberg Law the initiative that she is taking at her firm to create an internal blockchain. The innovation may be able to automate a number of routine jobs and tasks at the firm, such as timekeeping, filing deeds, and the like. Therefore, while blockchain technology has been viewed as potentially having a negative effect on the legal industry, there are ways that it is helping as well.
Rinearson is not the only attorney that is looking to improve the use of technology. According to Aaron Wright at Enterprise Ethereum Alliance, he stated to Bloomberg Law
“We can use blockchain as a ‘spine’ to manage the entire legal industry, build more efficient systems, decrease the cost of legal services, and make sure people get the legal services they need.”
One prominent critic of blockchain technology, Nouriel Roubini, is of the belief that blockchain technology may be able to eliminate the middleman when it comes to financial contracts and transactions. He stated
“This is absurd for a simple reason: Every financial contract in existence today can either be modified or deliberately breached by the participating parties. Automating away these possibilities with rigid ‘trustless’ terms is commercially non-viable, not least because it would require all financial agreements to be cash collateralized at 100 percent, which is insane from a cost-of-capital perspective.”
Overall, at the end of the day, only time will tell whether such technology will take over the legal industry or, rather, improve it.