How Blockchain is Disrupting the Legal Sector

It goes without saying that technology is one of the biggest changes in society today. Living in the digital age has brought new adjustments to every aspect of our daily lives, from our relationships to the ways we sleep and eat. With every new technological discovery, society has to adjust in different ways.

One of the biggest technological shifts may be happening right now. With the advent of blockchain technology, new frontiers have opened in various fields and systems around the globe. Blockchain is a digital ledger where all transactions are recorded and managed by users across the world, making it fully transparent and independent. Initially used for cryptocurrencies like Bitcoin, the technology is now being applied to different fields. These fields include finance, politics, education, travel and transportation, and even entertainment. For further reading, check out our article on how blockchain technology may have impacted different industries in the Philippines.

While it’s been only a decade since blockchain first burst out into the scene, its impact on society cannot be overstated. Blockchain may be especially important for the legal field in the years to come. When it comes to the law, a layperson’s first impression may be that traditional legal systems are full of bureaucracy and unnecessary paperwork. Now, legal tech experts see the technology as a way to break through the bureaucracy and further streamline the profession. Here are some ways that blockchain has been disrupting the legal sector.

Smart Contracts

The days of fussing over contract renewals may soon be over, as legal tech experts are saying. Mick Atton from Thomson Reuters Westlaw recently provided an overview of what blockchain technology could be used for in the legal world, and one of the applications was what he called smart contracts. Smart contracts are essentially a set of terms and conditions that can be automated. These would be self-renewing contracts, such as for a lease for real estate, which would eliminate the need for a legal team and the corresponding fees. Certain clauses would essentially run themselves under the blockchain technology, and their repeated functions wouldn’t need curation or management by a human.

Long-duration Records

Another benefit of blockchain technology in the legal sphere would be longevity. Given the nature of blockchain as a self-renewing, self-regulating technology, its use as a medium for long-term recordkeeping is certainly possible. With the development of the Internet, enforcing intellectual property rights has become more difficult than before. Blockchain technology’s longevity offers one solution to this headache. The World Intellectual Property Organization wrote that blockchain can provide evidence of the creation and first use of intellectual property, as well has aid with rights management. It can also be used to track distribution, making a copyright lawyer’s job much easier.

New Legal Teams

The landscape of business is changing, and with it, the legal world. Young entrepreneurs now live in the digital sphere and are in need of alternatives to traditional lawyers. Instead of being impressed by traditional firms with fancy offices, these entrepreneurs are looking for cost-effective legal solutions. That’s where companies like Legal Nodes come in. Legal Nodes’s aim is the decentralization of law firms via the principles of blockchain technology. It’s an online gateway to relevant legal expertise, creating a “legal blockchain” that allows clients to digitally connect with “nodes” or legal experts from any part of the world. Businesses can “mine” relevant information just like in cryptocurrency. Legal Nodes also uses smart contracts for payments, ensuring that every transaction between both clients and lawyers is safe.

Corporate Filings

2010 saw over 27.9 million incorporated businesses in the United States alone, and that number is of course exponentially larger worldwide. The costs of incorporation can often be prohibitive, especially for smaller businesses. Luckily, places like Delaware are looking to make costs lower through blockchain technology. The state recently awarded IBM a single-bid contract to create a blockchain-based corporate filing system. In addition to this, Delaware’s business-friendly courts and transparent corporate legal environment, Delaware may be the first test of how blockchain technology can lower the cost of corporate filing.

Notarizations

Notary publics perform important legal services for mortgage, business, and payment settlement purposes. Blockchain technology has the potential to make these services more affordable and accessible. For example, two of the main functions performed by notary publics are document authentication and signature certification via witness. The authentication can easily be provided by the timestamps and hashes issued when a document is uploaded to the blockchain. The option of public and private keys can also help certify the true owner of a document’s contents. With the blockchain’s function as a public, decentralized ledger, it can serve as a guarantor of documents.

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