Blockchain technology for the legal industry
When it comes to the legal profession, it appears that it takes longer for it to modernize and integrate new technologies within its modus operandi. Nowadays, only the most pioneer law firms have entered the blockchain market and benefit from its accessibility and economic advantages, even though it exists since 2009.
In simple words, the blockchain consists on a system to record all transactions made in cryptocurrencies across several computers linked in a peer-to-peer network. The way in which such system records the information makes it almost impossible to modify or hack. This brand-new technology offers a very secure infrastructure to perform deals between two parties without the involvement of a government or bank in the middle of the process.
The legal profession must be among the ones that need the most secure and protected systems to guarantee its clients the maximum confidentiality for its cases’ documents. Therefore, it is a fact that the blockchain presents an ideal framework to carry out such operations. In the following paragraphs will be pointed the benefits of integrating blockchain technology on a law firm.
To begin with, lawyers would be able to streamline and simplify transactional work, digitally sign documents and store legal agreements handily. It amounts to a 48% the time that lawyers have to invest nowadays into administrative tasks, the blockchain permits to swift to a more automatic and simple manner reducing the waste of time preparing contractual formalities, converted to smart contract and without losing any judicial authority. Not only the firm takes advantage of reduced costs here but also customers do.
Transparency will be another gain: all parties can share and access blockchain-based contracts, thus no surprises nor misinterpretations can be made. In addition, employing the blockchain eliminates all possible vulnerabilities derived from the emailing of sensitive data, using instead a decentralized and well-distributed ledger, which will track record of any modifications made to evidence. The parallel benefits that come along an increased transparency facilitate a better understanding of the transactions for those who don’t sympathise with technologies.
In another vein, the Enterprise Ethereum Alliance (EEA) has recently launched a report to help solve business problems. The EEA proposes a defined set of technical guidelines to provide the adoption of blockchain technology for businesses, facilitating the leverage of Ethereum (cryptocurrency) private chains and the public main net.
EEA has so many blockchain applications that encounter the legal industry. First of all, the electronic signatures that were mentioned before, accompanied by speed, efficiency and cost savings. Secondly, intellectual property together with property rights can get served from the blockchain architecture (as well as NFTs=non fungible tokens) to register a piece of content, undeniable proof of ownership, obtaining considerable reductions in transaction costs.
At the end of the day, it all comes to time and cost reduction, an essential quality to acquire in our current fast-changing and globalized society, where a firm that cannot adapt to such evolutions has no future in the market.
The chain of custody, evidence exchanges and arrival to court, presents a point of vulnerability that works in favour of interested parties to modify such evidence and then for defence attorneys to claim its futility as proof. With blockchain technology this won’t be a problem no more, providing track of unique evidence for every item of data. Similarly, tokenization implies converting rights to an asset into a digital token, then parties could be able to legally purchase and sell the token, like fractions of their asset.
The list of application doesn’t end here and extends to decentralized autonomous organizations (DAOs), limited liability autonomous organizations (LAO), automated regulatory compliance, machine to machine (IoT) payments and blockchain-based arbitration system.