Smart Contracts and the Legal Industry
Will Smart Contracts replace attorneys? I am among a number of those interested in blockchain technology who don’t believe so. Instead, I think it will bring developers and attorneys together to collaborate on solutions that will benefit their clients.
What is a Smart Contract? It is a computer program that directly controls the transfer of digital currencies or assets between parties under certain conditions. These contracts are stored on blockchain technology, a decentralized ledger. This is the technology which bitcoin and other cryptocurrencies are built on.
Smart Contracts have the potential to increase efficiency in the legal industry and law firms are beginning to take notice as smart contracts provide an alternative to traditional legal contracts due to their immutable and autonomous nature.
In August 2017, ten law firms and four legal institutions joined the Ethereum Enterprise Alliance Legal Industry Working Group to explore blockchain-based legal technology, develop standards for “smart” legal agreements, support emerging use cases, and tackle important policy issues regarding the technology.
In May of 2017, Frost Brown Todd (FBT), a 500+ attorney law firm based in the US, announced the development of a prototype smart contract to be used in software escrow agreements. FBT also has a Blockchain and Digital Currency practice group that helps clients prepare for the disruption with these technologies and those who are on the cutting edge with them.
At the August 2017 ILTACON conference, Bob Craig, CIO at Baker Hostetler, predicted that blockchain, more than any other technology, will drive the next wave of legal innovation and transform the business of law. Craig was at ILTACON to announce the formation of the Global Legal Blockchain Consortium, a group that will work to drive the adoption and standardization of blockchain in the legal industry.
There was a standing-room-only audience at the ILTACON session “Where Does Blockchain Fit in Legal?” which I believe indicates the need to prepare attorneys and firms to understand this emerging technology. This technology has the potential to impact every industry including legal. Attorneys, technologists and firms that are knowledgeable will provide solutions that will benefit their clients and attract new ones.
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