Why Lawyers and Legal Ops Need to Embrace Blockchain
The potential of blockchain for the legal profession, whether for private practices or corporate Legal Operations departments, is huge. Legal professionals need to embrace blockchain, not fear its impact on their job or business.
As our Emily Bogin recently explained, many lawyers are change-averse by nature, thanks to hundreds of years of meeting expectations of the part they play in society as advocates for stability and probity, “with their reverence for law and their aristocratic love of order.” When it comes to technology adoption, though, we’ve met many who realize the gains to be made by using platforms like workflow automation, though they’re discriminating and cautious in how they approach tech.
As we draw closer to CLOC’s 2018 Annual Legal Operations Institute event, it’s a good time to consider how one of those technologies, blockchain, will impact the legal profession, and why lawyers and other legal professionals ought to be embracing it, rather than feeling anxious.
Die ABA Journal dug into this topic, interviewing one blockchain services provider who says lawyers have a misconception about its nature and potential effects. Rather than being a new application, it’s a technology where a list of records, the “blocks,” are distributed across the web and linked and secured via cryptography.
The advantage for the legal profession is the fact blockchain records are impossible to tamper with, resulting in ironclad digital trust between parties who are part of a legal process or transaction. Intermediaries are removed from the process, making it even more secure.
“Lawyers have a misconception about the nature and potential of blockchain.”
Making an unavoidable impact
Blockchain and Distributed Ledger Technology will evolve, eventually becoming, as Law.com put it, “an arbiter in dealmaking, advisory, matchmaking, due diligence, assets transfer, financial crime prevention (AML), improving regulatory processes, and other tasks typically associated with legal experts.” These will be driven by blockchain-powered automated workflows, where consistency, standardization, data accuracy and compliance are maximized, and human error and manual intervention are removed.
Yet disruption doesn’t have to be threatening or costly for legal practitioners. A legal blockchain will only deal with the more menial and programmatic processes of legal services; the lawyer’s insight, expertise, and skill in representing their clients are still primary.
Blockchain is absolutely going to transform the nature of legal services, mostly for the better. So it’s incumbent on attorneys and their staffs to gain a pragmatic, unprejudiced understanding of the technology, and how they can put it to best use, before they find themselves too far behind the curve.
As legal tech advocate Justin Hectus put it, everyone in business – lawyers included – have to be ready for the changes a disruptive technology imposes:
“There are high-profile stories of companies that suffer under the delusion that their business model is impervious to change or competition from new models, but they don’t survive. Blockbuster versus Netflix. Kodak versus digital. Even Nokia versus the smartphone. Change is coming for us all, and those of us who are able to pivot quickly and adapt are going to do very well. Businesses, and I include law firms in that, that choose to maintain the status quo are going to be marginalized, will struggle and perhaps even go out of business.”