Blockchain Will Change the Shape of Legal Industry – Here’s How and Why
Bitcoin valuation touched $20,000 per coin in December 2017! A few years back, self-proclaimed text experts were quick to dismiss crypto-currencies as a concept at best. We can bet anybody would be ready to eat their words only to get a Bitcoin or two in their digital wallets, today.
At this point in time, blockchain technology is being looked upon as something revolutionary, and something that brings groundbreaking improvements in the ways and means of several industries. The technology is also called ‘distributed ledger’; that’s because the core idea of information management in blockchain is to store verifiable blocks spread across thousands of terminals in the network. This also means that each transaction or contract can be verified and follow up actions can be tied to this verification.
This theoretical 100% control and credibility of transactions and exchanges are what makes blockchain technology an exciting proposition for the legal market. Here’s all you need to know to catch up on the impact of blockchain in the legal industry.
Smart Contracts: An Existential Risk to Contract Lawyers?
Traditionally, corporate contract management has been a market with strong roles for lawyers. Apart from drafting these contracts, lawyers play important roles in ensuring that both parties actually sign contracts physically, and then also take care of the physical storage of these documents.
The power of blockchain is already changing the way contracts are being managed. These ‘smart contracts’ could be digitally created, and because of the distributed information on the network, could always be verified, and hence held legally binding. The crazy bit – these contracts can be executed without the requirement of a lawyer, directly between the two parties involved.
Already, startups in the legal-blockchain interface market are providing platforms for individuals to enter into smart contracts, without the need of a traditional lawyer. Of course, enterprising law firms have an opportunity to activate an entirely digital-dependent revenue chain, offering smart contract services.
The Impact on the Volatile Intellectual Properties Market
As dismal as it sounds, artists have a difficult time getting their intellectual property rights honored, even in spite of there being clear legal guidelines for the same. Because of the nature of the product, the complexity of distribution, and lack of transparency in the way content streaming companies operate, the intellectual property market becomes highly complex.
However, blockchain can bring order to this otherwise chaotic marketplace, and that’s by tying the artistic content to a blockchain powered platform. Startups such as NKOR, for instance, offer a service where artists can register their intellectual property. Also, there is a lot of excitement around concepts such as coding royalties-distribution into the blockchain, to ensure immediate disbursement of the artists’ dues. Legal firms can expand into this space and become the intellectual property protectors for artists throughout their careers.
Blockchain As An Operational Enabler
Apart from opening new revenue channels for law firms, blockchain technology has superb operational benefits to bless the industry with. Before that, let’s understand the 4 attributes of blockchain methodology that make it substantially secure for data or value exchange.
- Information is decentralized.
- Information is very difficult to alter because that requires making alterations in several data locations.
- For new data to enter the blockchain, multiple sources are needed.
- The steps involved in information and value exchange are very little and the time taken is very less, which leaves very little scope for manipulation.
Today, law firms face severe compliance challenges. The nature of modern businesses means that these firms need to securely exchange information among teams, clients, and contractors while maintaining strict control and clarity over responsibilities and jurisdiction as data flows across various parties. This makes blockchain a promising platform for law firms to manage how they share data, without risking leakage and ambiguity over responsibilities and ownership.
Land Ownership and Deed Management
It’s dismal how real estate market is exposed to severe litigation risks because state and central governments continue to struggle with outdated means and methods of information management. Blockchain, however, can solve the problem, by providing a reliable method for all stakeholders to verify the ownership of land by claimants. Also, important information such as the location and area of the land, and the dates on which important exchanges took place, can all be stored in the public blockchain.
More than a decade back, the digital media industry became huge, which led to maturation of the digital media usage related legal market. Today, we are at a point where there are tremendous opportunities for enterprising law firms to become experts in blockchain law, understand the implications of the technology on different markets, and identify stakeholders that will need representation. In the years to come, as the body of law governing blockchain matures, the demand for blockchain lawyers will surge.
Chain of Custody
Chain of custody refers to a carefully maintained paper trail for all evidence assets, which is maintained until the time the evidence is produced in court. If the chain of custody is not properly maintained, the defense attorney can easily file a motion to make the prosecution’s evidence inadmissible. Physical evidence’s chain of custody is a difficult enough problem for law firms; throw in digital evidence, and the challenges become even more complex. Here, blockchain can offer the dual solution of not only ensuring the maintenance of a reliable chain of custody (particularly for digital evidence) but also help in secure storage of data. This means that evidence management will cease to be a headache for law firms in the times to come.
From the discussion till now, it’s clear that blockchain will alter the legal market for the better, eliminating several operational bottlenecks as we know them today and opening new revenue generation channels for law firms. Also, because of the inherent information security capabilities of the blockchain, it’s expected that the technology will help law firms secure their information, and offer related services to a wide range of industries.
Author: Rahul Sharma