Blockchain is a force that is fast changing the way every industry or sector functions across the globe. It can be said that, Blockchain is as ground-breaking as the internet. The soul of Blockchain is a technique to create an irreversible but transparent shared ledger where all the transactions would be recorded and stored.
The Legal industry is no exception, and Blockchain has brought it at a cusp of a major overhaul in the way it works. The way in which the law firms serve their client and how they conduct their operations will be completely altered. Since, most of the businesses are adopting Blockchain and getting splendid results out of it, the legal industry also wants to leverage the technology and harness its benefits. Experts believe that Blockchain technology is ideal for industries which involve continuous transactions between parties on a regular basis, and demands frequent authentication and verification.
There are 5 areas which the Blockchain has the potential to transform the legal industry:
- Smart Contracts:
When it comes to legal documents, authenticity is the key. Even today they are written in hard copy with physical signatures present on them. All this makes the process too time consuming and cost-oriented. The Blockchain technology companies have the potential to change this through digitization. The process is called ‘Smart Contracts’ which is a combination of the smart contract code and the usual legal terminology used. These contracts have in-built commands based on a computer code which can be executed and run on the Blockchain technology. The major difference between these contracts with the traditional contracts is that these are auto-executable when any event is triggered and call for minimal intervention from legal personnel.
- Title Searches:
For transfer of assets between the parties, especially in the real estate sector, there is a process called Title transfer. This process is time-consuming and cumbersome. Blockchain is all set to transform this process. Blockchain companies allow land records to be added to the system which enables access to the records in a more efficient and transparent mode. In a recent report, Goldman Sachs highlighted that about $2 billion to $4 billion can be saved annually if the real estate title search process can be shifted to the Distributed Ledger System (DLT).
- Digitization of cases:
While preparing for the cases, lawyers study plenty of case histories and search for citations of precedents in each case. However, with advancement in technology, the process is getting digitized. Today, the lawyers refer to a digital library which eradicates the need of searching across innumerable case laws. Blockchain technology companies are enabling the conversion of millions of case laws by using various legal terms. The Law Library of Congress in the US is an apt example of this.
- Eliminating Notary public:
At present, the Notary public confirms and verifies signatures on the legal documents like contracts, deeds and agreements. Blockchain can now be used to store these documents in a digital format as a part of the Digital Ledger. For example, a Blockchain company called Blocknotary applies the technology to notarise legal documents. It eliminates the need of the signature rubber stamp of today with “timestamps and fingerprints for media files”. Once the document is stamped and sealed, it cannot be changed in the future. Law Firms simply need to activate the smart contract to scan for any possible errors.
- Preservation of legal documents:
Blockchain helps to make completed, stamped and signed documents tamper-proof and unalterable. Once the documents become inviolable, there is lesser chance of disputes. Presently, there are many courts which accept the contacts and signatures on Blockchain as authentic. The technology behind the Blockchain solutions is fool-proof; the documents cannot be manipulated and hence and there is negligible chances of errors and clashes.
Though Blockchain has immense potential to transform the legal system, it is still in its nascent stages and it will take a lot of time to become a widely accepted norm. Hence, we can expect some teething issues until then. Moreover, unless every court, law firm and client uses the services of Blockchain consulting companies, it won’t be a standard process.
But the best part is that clients today are increasingly informed and aware about the technology advancements. So, if they insist other parties in the law chain have to adopt Blockchain practises sooner or later. Be it any aspect of the legal landscape, such as Intellectual Property, Title Transfer, Legal Documentation or notarization, Blockchain is the one stop solution for all.
ATG Blockchain services help clients to deploy Blockchain technologies through multiple frameworks such as HyperLedger, Ethereum, etc. It understands the unique client requirements and develops a customised solution according to the situation.