Blockchain for Lawyers? Time for Lawyers to Lean In
How will Blockchain affect the work of lawyers? Extracts from this article first appeared in @Raconteur for @TheTimes https://twitter.com/Sooraj_Shah/status/ 961261540652576774
Most commercial and dispute resolution lawyers haven’t realised that Blockchain means they could be out of a job within 10 years. The ones that do are investing time and resource in understanding how they can add value once public (and private) blockchains become more widely available.
Much of a lawyers’ skill comes from negotiating contracts and then interpreting the work of others to find loopholes and work-arounds so that clients can do what they want or justify what they have already done! Blockchain gives certainty to transactional history, is highly-encrypted and provides the opportunity for contract breaches to be self regulated. Put bluntly it reduces the need for lawyers. If a service isn’t delivered, a customer doesn’t pay or it exceeds the contractual parameters of use, a self regulating contract will trigger payment, penalties or cessation of service, without the long legal paper chain that needs a lawyers to be instructed about the history of the deal, to read the contract, decipher it and then correspond with the other side about why they didn’t pay, what that means in law and when they will pay!
For now, much of the block chain functions as a trusted party database that proves provenance – like a giant Smithsonian style Wayback machine. If you can imagine the internet before Paypal (and similar) you can get a sense of where we are with Blockchain. Before trusted payment systems, the web was one big shopping catalogue. Add a trusted payment system and e-commerce was born.
Although the ‘giant database’ analogy of current blockchain use presents a direct challenge to the work of general counsel whose knowledge of the functions and operations of a business their client companies are so reliant on, once real product and services are put into the blockchain the role of a lawyer to do due-diligence about the goods or services, to check what can be offered under a contract, prepare the terms and present them to a purchaser is probably negated entirely. Add to this the onslaught of AI to crunch massive datasets and it is easy to see that the fields of banking law, financial services law, litigation support, paralegals and even specialist in-house counsel who document the lifecycles of a business from research & development to will be obsolete.
From the need to check titles and searches in a conveyancing scenario to due diligence in a business sale, all of this information can be verified and put into the blockchain removing the need for lawyers – who by comparison are an expensive and fallible resource, with creaky systems and leaky databases that are prone to being hacked!
This may all sound like I am talking myself out of a job, but I am one for progress. Lawyers are uniquely placed in terms of recording the minutiae of personal lives and business transactions and if they engage now with the Blockchain technology companies, the functionality and the usefulness of the Blockchain – and its ability to become more than a database – will be vastly increased.
Are any firms doing this? Many say they are ‘actively looking at Blockchain technology’, but are they investing time and real money in it? Yes, for now it’s the early adopters and big players, but it has a trickle down effect. It pays always to know what the competition is up to and very soon the greatest competition for lawyers will be Blockchain.
“If you want to talk about technology law, talk to a lawyer who understands technology”. Joanne