Technology is continuously improving legal processes. It is easing the burden of administration, improving communication, and making the work of lawyers more efficient. This allows lawyers to focus on valuable and creative ways to serve their clients while minimising time spent on slow and costly routine tasks.
The Contract Management space is a crowded and turbulent one. Technology is being implemented in existing workflows to help with data ingestion and management. When we take a closer look, we recognise three main categories trending in the space.
Legaltech companies are now providing access to legal agreements without the necessity of hiring a lawyer. The legal documents include copyright registrations, wills, intellectual property, and other standard contracts. This increased accessibility and affordability of legal services is a major step in the innovation of the industry.
Document Assembly services offer DIY Legal Forms and templates to build contracts. It also encircles the design of workflows, allowing consumers to tailor a legal document to their personal needs.
Lastly, Artifical Intelligence is being utilised to review contracts. The software searches for risks and conflicts with the company’s predefined legal policies. It is trained to understand legal concepts, by being fed hundreds of thousands of documents. This drastically cuts down the costs of the Contract Approval process and acts as a first-pass review.
The New Kid on the Blockchain
With the emergence of Blockchain and Smart Contract Technology, a new player has entered the game. It enables the realisation of a new concept: Smart Legal Contracts. These are digitised agreements, with parameters readable by both human and machine. This opens the door for an automation of transactions, live visibility to contract state and other contract management processes like signatures and renegotiation.
Read more about in our previous publication.
High-Growth Use Cases
The transition from traditional, manual legal processes to a connected and automated environment, creates a plethora of new commercial use cases. I will now cover some specific use cases that benefit from the implementation of this new technology.
Covenant will serve as an application layer for Contract Management. The Smart Legal Contracts are built on Accord Project, a techno-legal foundation that provides an open source technology stack for developing these digitised contracts.
🏠 Real Estate
Buildings and other assets are being filled with sensors, creating an abundance of new data. Using this data as a source for Smart Legal Contracts, a wider range of activities and processes can be automated with lower risk, cost and enhanced transparency.
Ownnr is a unique digital platform for property management. Their solution aims to save time and money spent on managing real estate. They offer direct communication with tenants, real-time visibility to payments, property information, repairs, and other valuable insights. Users are also able to assemble electronic contracts and ultimately sign them with a Digital Signature, provided by Connective and itsme.
Integrating Covenant into this flow will valorise the contract by adding machine-readable parameters to the legal prose. In the image below, this is represented by the Smart Clause. The contract will listen to a predefined trigger, in this case, the signatures of the two parties. Once confirmed, the contract will automatically execute a predefined output. This can be a notification or a transaction.
To achieve a truly self-aware contract, the document can be connected to multiple data sources. ERPs, Blockchains and IoT Networks provide valuable, trusted information that enables contracts to show real-time status and react to key events that happen in the real world.
For example, local authorities often aim to influence economics processes through the provision of grants or subsidies. The Ownnr platform can be connected to a government API, screening for subsidies and automatically claiming them for the end users.
🏗️ Equipment Leasing
Devices are upgrading at an increasing rate. People and businesses are less incentivised to invest in new equipment because of this. They then proceed to invest in less technologically advanced devices, lowering their general productivity. Utilising performance-based financing or a pay-per-use financing plan, more consumers can enjoy the benefits of using high-end devices and machinery. This comfort gives small and medium-sized corporations a chance at competing with the larger players in the industry.
The Blockchain serves as an immutable record of the machine’s history. This data encompasses product usage, maintenance information, ownership, and lifecycle efficiency. The analysis of this data proves to be incredibly valuable to various stakeholders, including Original Equipment Manufacturers, consumers, and financers. In this scenario, Smart Legal Contracts can function as reusable, scalable and automated assets that handle the payments, micropayments and insurance of the leased equipment.
💡 Intellectual Property
The Internet has disrupted traditional media and has given birth to new channels, enabling consumers to create and distribute original content. Platforms like YouTube, Instagram and Medium are gaining popularity, allowing users to start a career as Content Creator. Simultaneously, complex legal challenges arise.
It is necessary to protect the Intellectual Property of these professionals, shielding them from copyright infringement lawsuits. Blockchain and Smart Legal Contracts offer a transparent and reliable way to claim ownership. The content can be stored on the blockchain, accompanied by a timestamp, licenses and other properties. This awards the producer with full control of the distribution and monetisation of his assets.
I am a 22-year-old Student-Entrepreneur with an expertise in Web Technology and Digital Product Development. My interests include innovation, design, psychology, philosophy and financial markets. I am currently doing a three-month internship at the amazing Blockchain Consultancy Startup TheLedger.
I am always open for a good conversation: Contact me.