Deborah Enyone Oni
Blockchain technology has the potential to revolutionise various industries, including the legal industry. With its decentralised and secured nature, blockchain can bring a new level of transparency and efficiency to legal processes. It offers a lot of advantages which have seen a lot of improvement over the years and promises great increase in the coming years.
According to a report by Deloitte, blockchain can be used in the legal industry to improve contract management, secure document storage, and streamline legal processes. One intriguing part of blockchain in the legal sector is the ability to create smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. These smart contracts are stored on the blockchain and can be automatically executed when certain conditions are met, reducing the need for intermediaries and minimizing the risk of disputes.
Staying current with the trend, has become more important for the legal industry in the light of digitisation than ever.
This article seeks to highlight the benefits and challenges of blockchain, how it can be leveraged by the legal industry, stir up the minds of lawyers on the need to stay current with the emerging trend so as to find and create solutions that will help tackle some of the issues that plague the legal industry.
In delving into the subject matter, let’s have a recap of what Blockchain means.
Blockchain is a public ledger which can be applied to anything that would normally be saved to a database or spreadsheet. it is a decentralised and distributed data ledger which allows users to share ownership and management of the network through computer nodes.
Blockchain has emerged the top of discussion regarding tech and the future of tech in the legal industry and has great potential in revolutionising the legal industry.
Benefits of Blockchain
- Cost and time reduction: Deploying documents on the Blockchain helps to reduce the length of time and cost of drafting and amending legal documents.
- Transparency: Blockchain ledger is accessible to all parties thereby making it transparent. This makes it easier for lawyers and other legal professionals to access and verify important informations, leading to faster and more efficient processes.
- Efficiency: Blockchain can streamline and automate many processes in the legal industry without losing any of the judicial authority.
- Immutability: documents will not be subject to manipulation and change by individuals thereby guaranteeing data integrity as any alteration of evidence will be made visible.
- Increased security: Blockchain uses cryptographic algorithms to secure transactions, making it a secure platform for data storage and transactions. Hence, Legal documents and agreements can be stored on the blockchain, providing a secure and tamper-proof record of the information.
Challenges of Blockchain in the legal industry
Despite the potential benefits of blockchain, Its implementation in the legal industry faces certain challenges. The legal industry has been slow to embrace blockchain technology for several reasons such as:
- Regulation: The legal industry relies on clear regulations and laws, and the lack of clear regulations surrounding blockchain technology has made many lawyers and legal professionals cautious about embracing it.
- Technical Complexity: Blockchain technology is quite a complex and technical field that can be difficult for legal professionals to fully understand, but not impossible to understand.
- Lack of standardisation: The lack of standardisation in the use of blockchain technology across different jurisdictions and sectors can create compatibility issues and hinder the widespread adoption of blockchain in the legal industry.
- Legal uncertainty: There are still legal uncertainties around the use of blockchain in the legal industry, particularly with regards to issues such as jurisdiction, enforceability, and dispute resolution.
- Resistance to change: Legal professionals are often conservative and resistant to change, and may be hesitant to embrace new technologies like blockchain.
- Lack of understanding: Many legal professionals are not familiar with blockchain technology and its potential applications, which can make them reluctant to adopt it.
- Interoperability: Different blockchain platforms have different protocols and standards, which can make it difficult for the legal industry to integrate them into their existing systems.
- Data Privacy: while immutability is one of the key characteristics which makes blockchain useful, it acts as a double edge sword since data once stored on the ledger can neither be deleted not altered easily. The blockchain is automatically rendered non-compliant with data protection laws which makes provision for the right to be forgotten.
Use cases of blockchain in the legal industry
The Blockchain will help in simplifying most of the traditional processes, some of the ways in which the blockchain can help to revolutionize the legal sector are as follows:
- Smart Contracts: Blockchain technology can be used to create self-executing contracts with the terms of the agreement being directly written into code, reducing the need for intermediaries and improving the efficiency of legal processes.
- Document management: Blockchain as a distributed ledger with advantages such as immutability, precision, transparency and security can help to uphold the values of the legal industry and help in managing the documents with a guaranteed integrity.
- Intellectual Property Rights: The struggle by law to protect the intellectual property of individuals and corporation has not been an easy one, So much more in a digital age. Having the whole process of intellectual property rights application deployed on the blockchain will help foster innovation, save time and serve as proof of ownership.
- Land Registries: Blockchain can also be used to tackle issues such as fraud and corruption in the legal sector. For example, blockchain can be used to create secure land registries, reducing the risk of fraudulent activities such as fake property ownership claims.
- Evidence Management: Blockchain can be used to store and manage evidence in a secure and tamper-proof manner, making it a useful tool in legal proceedings and helping to ensure the integrity of evidence.
- Contract Management: Blockchain can be used to manage and track the lifecycle of contracts, from creation to execution, improving efficiency and reducing the risk of errors.
- Dispute Resolution: Blockchain can be used to automate dispute resolution processes, improving the speed and efficiency of dispute resolution while reducing the cost associated with manual processes.
Examples of blockchain-based solutions for the legal industry to leverage
There are some companies and organisations that are working on developing blockchain solutions for the legal industry, such as:
- Clause.io: This platform uses smart Contract to automate legal agreements.
- LawGeex: This company uses AI and blockchain technology to streamline contract review and management.
- JUR: This platform uses blockchain technology to create secured and transparent legal agreements.
- ChainRider: This company provides blockchain-based solutions for contract management and dispute resolution.
- OpenLaw: This platform allow users to create, manage, and execute legal agreements using blockchain technology.
The importance of Blockchain technology cannot be over emphasised as has been witnessed by the various use cases and benefits.
While Blockchain has the potential to revolutionise the legal industry and business operations, it is important to understand how the Blockchain works, the risks and challenges associated with it, hat the barriers are lifting, that the use of blockchain is still in its early stage and a lot of innovations around it are underway.