The word ‘bookworm’ springs to mind when you think of just how much time lawyers spend digging up old contracts and updating/editing them to suit the current legal environment/framework. Now with the emergence of blockchain technology, a system built on books and paperwork is about to take a huge leap forward into the new millennium.
With each new or disputed clause or legal technicality that is disputed comes additional costs to the client. At the same time, some law firms are bogged down with civil disputes and the review of legal contracts that it is hard for small firms to keep up with larger firms that have more resources available. These are just some of the issues blockchain solutions are looking to solve.
Law firms are some of the most well-paid businesses in the world. The money that sifts through this industry propagates all the way down to the lawyers’ wages themselves, who by all accounts, get paid pretty well indeed. Yet, the paper clad systems still being used and the time wasted drafting new contracts could be coming out of the dark ages making them more efficient in all areas of law.
On the other hand, the law industry could lose out on a lot of revenue from the provision of services for contracts that pertain to house sales, payment disputes, intellectual property ownership and other areas of law. With the ever-evolving cycle of blockchain solutions, we are now seeing legal applications coming out that would save the average person thousands of dollars on legal fees by using a system that negates the need for a lawyer.
That said, this does not mean lawyers are doomed. Another advantage of blockchain technology is the fact that it is opening up doors for legal students to study a whole new field of law.
Here Are 9 Ways Law Firms Could Be affected By Blockchain Technologies
Digitalization (Giving Them Immediate Access To Case Law)
In many areas of the current legal system, lawyers are still using old-school processes and paperwork systems to fine line legal points in contracts and argue minor points of law just to give their clients’ a better deal no matter how small the clause. However, the paperwork that goes with this and the time spent could be considerably reduced thanks to blockchain solutions currently being developed.
Criminal lawyers and corporate lawyers will be able to find lawsuits and compare cases in a matter of seconds. In fact, lawyers that specialize in any field will be able to reduce the time taken tracking down old case files or contracts once the entire legal system is digitalized by a set of blockchain solutions.
Smart Contracts Will Put An End To Disputes
Smart contracts on the blockchain are immutable and upon contract completion payments can be sent immediately. Payment disputes would, therefore, become a thing of the past. This is much like systems used such as Escrow that only pays out once both parties are happy all angles of the deal have been met.
Contract When Buying A Property Will Be Simplified
Depending on the law in the area the purchase is being made, and how stringently someone checks the condition of a property, the processes that people need to go through can be mindboggling. Using blockchain tech, house purchases can be finalized once inspections have been completed and funds have been confirmed as available by lenders. Blockchain technology can also play a role in keeping track of who owns the property.
The same principle applies to land deals. The New South Wales Land Registry Services (NSW LRS) in Australia are employing blockchain solutions to upgrade its current mission to digitalize all land records.
Enhanced Data Protection
One of the main issues with today’s current computer systems is the continuous leaks or loss of customer data. Despite the EU GDPR policy, numerous companies are still leaking or losing their customers information. The systems are also easier to hack because there is usually a central point where personal data is stored.
On the other hand, blockchain technology is decentralized. People’s data cannot be hacked very easily and provided private keys are managed responsibly, people’s data will not be lost. Law firms will be able to take advantage of the blockchain’s enhanced encrypted and decentralized storage to guarantee data protection and privacy.
People Do Not Need A Lawyer For Every Contract
A blockchain startup company called OpenLaw.io, which is part of the Ethereum blockchain ecosystem, provides its members with a library of legal contract templates that can be activated using smart contract agreements.
System templates are generated and shared in an open community by lawyers and others connected to the law industry or involved in the creation of legally binding agreements.
Using its API law firms will be able to build their own legal applications. However, in many cases, members of the general public will be able to access these systems to activate contracts helping the average person or small business reduce the costs involved with using intermediaries each time a new contract is issued.
Immutable Blockchain Records Are Proof of Agreement
Integra has a similar concept to OpenLaw by offering encrypted smart contracts that can be accessed using the Integra application. Once both parties have agreed to the contract, the system cannot be tampered with, and the terms and conditions of the contract agreed can be used as proof of an agreement.
There are over 140 organizations from around the world with just as many participating global locations being brought together by the Global Legal Blockchain Consortium (GLBC), which promoted the use of the Integra Ledger.
Firms that are part of the GLBC are collaborating to come up with viable ways to use blockchain to create a “universal blockchain-based technology infrastructure for the law” by giving the world’s legal minds a space to connect.
One of the key reasons for putting their trust in blockchain technology is because agreements, the length of the contract, dates of deals, sales or decisions made using a blockchain ecosystem will never be erased. Even if a firm wanted to delete records older than seven years (which is ok by law in some countries), they cannot.
People Will Begin To Specialize In Blockchain Law
Right now more than one-quarter of the world’s legal firms have joined the Enterprise Ethereum Alliance or EEA. The organization was set up to accelerate the adoption of Enterprise Ethereum, so that businesses can use the Ethereum smart contract network for digital asset transactions. There are a number of firms from a diverse range of industries currently members of the EEA, which is growing in popularity every year.
The EEA gives these law firms that chance to interact with other members of the EEA community that require the services of law firms for their day-to-day business activities. Also, companies that prefer to use blockchain technology to legally manage digital asset transactions have access to 25% of the worlds most successful law firms.
It means that these firms are already embracing blockchain technologies and its potential. These law companies have essentially positioned themselves as experts in the legal field of blockchain technologies. With the expansion of this new disruptive technology, we can expect more legal professionals to emerge as blockchain tech specialist lawyers or law firms.
The Need For Notary Public Services Will Be Considerably Reduced
It is hard to see that notary services will not be needed in full unless there is a way to stamp an affidavit legally, but there are some areas of notary services that will not be required. For example, notary public services are often used to time stamp documents.
Blockchain software already does this. Therefore, once a smart contract has been issued or completed, the timestamps are there for eternity. There can be no debate on the time and date a contract was issued, completed, or canceled. This also removed the possibility of fraud.
At least in circumstances where proof of time is concerned, the need for a notary service is negated.
Intellectual Property Ownership
One point of law that is a legal minefield at the moment is legal ownership of digital assets. Many musicians, designers, photographers and more do not get paid for their work used by others. However, it is likely legal disputes in regards to intellectual property ownership will be reduced by an up and coming blockchain based application.
Some legal professionals have dedicated their entire office to this sector of law just because in today’s global economy, copyright fraud and intellectual property theft are rife. A well-designed blockchain system that uses smart contracts to create an owner of a digital asset such an image of a soundtrack can be submitted.
If there was ever to be a dispute, no one could argue with a blockchain based application, which would state who the owner is by rights and whether ownership rights had been sold or the sharing of the digital asset has been agreed.