Monday, June 1, 2020

Blockchain in the Legal Industry

For blockchain developers, the legal industry is uncharted territory. There are numerous possibilities for how the technology could be applied to the various processes and systems in the sector. The following provides a look at a few of the blockchain proofs of concept that are currently being developed for law firms and legal organizations.

General Notary

Notary publics are the standard for verifying various types of documents and any signatures on documents. Historically, these documents have only been available in physical format. In other words, only documents that have the notary's stamps are legally recognized—no physical copies or digital copies. Blockchain is allowing this process to become more digital.

Instead of a rubber stamp, notary publics can use digital timestamps and fingerprints to notarize documents. These documents are then uploaded to the blockchain and are preserved there indefinitely. There is no need for a physical copy or to revisit a notary public to get a document notarized again.

Smart Contracts

One of the most popular applications for blockchain in law is smart contracts. The main reason that developers and the legal industry are investigating the potential of this use case that contracts are time intensive. They must be original documents that are physically signed. Additionally, many contracts require manual intervention. For instance, if two parties enter into a contract where Party A agrees to sell a commodity to Party B if/when a certain event occurs, Party A and Party B must still manually go through the process of buying and selling, setting up bank transfers and following through with the necessary documentation. Smart contracts simplify this entire process.

Blockchain digitizes contracts so that all signatures can be provided digitally, and the contract is coded to set the necessary processes into motion in a very automated way. In the example above, the bank accounts would be linked to the contract and money transfers would be automatically made, as would any necessary legal documentation. According to Medium, the new system for contracts would require less intervention from lawyers and provide more security with any contractual agreement.

Intellectual Property Protection

Much of the IP that exists in the world has been nearly impossible to protect. Music, digital art, writing, code, and more can be illegally downloaded and uploaded. Artists and other professionals that create this work go unpaid and are rarely asked for permission. In order to try and prevent this theft, lawyers are chasing individuals and businesses around, filing lawsuits, and collecting fines. Blockchain can do a lot to end this cat and mouse game.