For lawyers, it’s time to raise the bar on blockchain
Technological innovation is shaping the legal minds of tomorrow, and today. So how does blockchain fit into the legal industry?
Over the past six months I’ve noticed an increasing number of members of the legal world are attending blockchain-related events. As I do with most other attendees of blockchain-themed presentations, I often ask what brought them to attend such a talk or event. The answer is often the same — to learn. At a time when many corporations are trying hard to integrate blockchain technology into their business models, the legal world appears to be more open to understanding the potential benefits this tech can have on their own businesses, as well as the potential risks it could bring if they do not swiftly adopt it.
When considering whether or not to adopt blockchain into their business models, lawyers could certainly focus on the cost and operational benefits the tech will provide (see 2017 McKinsey report). But more importantly, there are also ethical responsibilities that need to be addressed since private information, whether from an individual or corporate entity, should not be in the public domain. Therefore, a case can made that the legal industry would be served well to leverage blockchain technology to silo certain facts/data points and when appropriate, give permissions to certain parties to access only said facts/data points (i.e. Alice may read data related to X, but not related to Y).
For lawyers though, regulation is still a judicial quagmire. Thus, further boosting focus on blockchain at this early stage in the technology’s development will likely result in high demand for blockchain legal expertise, especially when considering if certain cryptocurrencies should or should not be seen as securities under U.S. law. Some clarity on this topic was recently seen on the heels of the U.S. SEC declaring Ethereum is not classified as a security. Yet other questions remain. For instance, there are over 1600 cryptocurrencies according to coinmarketcap.com. What about them? Also, should ICO’s be considered utility or security tokens? Sometimes there is a grey area. What then?
As more stringent regulation is put in place by international agencies, the timing seems right for U.S. lawyers to gain deeper knowledge about smart contracts, the mechanics of blockchain, and how the technology can help drive day to day life for attorneys. One area that seems a no-brainer would be the time savings blockchain can yield via the transferring of property ownership (hours/days vs weeks/months).
Additionally, according to the International Bar Association (IBA), young legal minds are being encouraged to be “to be legal ‘engineers’ and innovate within the legal services space.” This sort of increased technological focus could lead to greater uses of encrypted messages and public key infrastructure (PKI) which could help downgrade the risk for data being compromised. This has interesting opportunities because the emerging global digital economy requires immutable technology like blockchain especially since Law 360 reported in 2015 that 1 in 4 law firms are victims of a data breach.
The threat of data breaches, which may continue to rise with the tokenization of everything, is reason enough for to suggest that blockchain seems to hold much promise in the legal world. However, the potential to use the technology when dealing with advisory work and representing the average person, businesses and governments could also be quite useful for lawyers in other clearer ways, such as the handling of escrow accounts, wills, estate planning, divorce proceedings, insurance claims and dispute management (including use of smart contracts and secure data stored on a blockchain for royalty payments or accidents stemming from autonomous vehicles).
I’d be remiss not mention the possible use of blockchain as proof-of-ownership and authentication (i.e. jewels, sports memorabilia, designer merchandise) which could also be impacted by encroachment from cryptocurrencies and greater security stemming from deeper use cases for blockchain technology, something the legal community needs to be aware of, especially in dealing with cases of identity management and fraud, something more widely seen in mobile devices and via global phishing attacks according to RSA.
Also, it’s worth noting that according to a 2017 American Bar Association Tech Report, “Confidential data in computers and information systems, including those used by attorneys and law firms, faces greater security threats today than ever before — and they continue to grow!” That thought is even more frightening when you consider cybercriminal activity is predicted to cause damages north of $6 trillion per year according to the Herjavec Group.
Keep in mind, as cryptocurrencies become more popular in the mainstream market, clients may want to pay for legal counsel in cryptocurrencies. This further solidifies why the legal community needs to embrace blockchain as a secure means to retrieve digital payment and also communicate with members of their team and with clients. The latter is something Eth-Mail, a super-secure encrypted messaging application my colleagues at MIMIR Blockchain Solutions recently launched, could be very useful for. Also, our Eth-Watch offering which allows for push notifications to take place any time a transaction to or from your account is mined and written into a blockchain, could help lawyers securely track fund movement for clients and themselves.
At the end of the day, ethical standards, transparency, and security are all paramount for the legal community. The whole idea that data breaches can’t and won’t happen is archaic. This is something lawyers can’t be complacent about any longer. In an increasingly digital world, the legal profession can’t be too careful. So they must further look for technology to improve the way they conduct business, including protecting themselves before they can effectively protect others. This means the use of blockchain by the legal community is not a topic for summer reading. It’s a realism the legal world simply can’t avoid. Case closed.
Contact/Connect with us at:
Twitter || Facebook || Telegram || Website
DISCLAIMER: The content provided on this site is opinion and commentary on topics related to the blockchain universe. IT IS NOT INTENDED TO BE NOR SHOULD IT BE RELIED ON BY YOU FOR ANY REASON AND IS PROVIDED “AS IS” WITH NO WARRANTIES OF ANY KIND. You are responsible for your own decisions and for properly analyzing and verifying any content.
