After years of tantalizing promise, blockchain is starting to show real applicability for the legal industry.
Then, Raczynski, a Manager for Technical Client Management, attended the Consensus technology summit earlier this summer. The third annual blockchain conference drew 2,000 attendees, more than ever before, and demonstrated that blockchain technology isn’t as abstract an idea anymore.
“There’s no question that blockchain is being spoken about all over the place right now when it comes to financial and risk, insurance and now legal,” Raczysnki. “It’s absolutely hit the mainstream.”
Not only that, but “people are starting to see how it could apply to their lives,” he added. “The rubber is starting to meet the road.”
Blockchain – a distributed, decentralized ledger that lets information be viewed but not copied or altered – promises to transform many industries, including legal. Raczysnki said he foresees blockchain both augmenting and supplanting the legal world’s way of doing things.
“This is the direction that a lot of law firms and corporations will eventually go,” Raczysnki said. “Blockchain will take the place of the way we do some things now, and it will change the way we do some things now. It’s going to touch just about everything , but to varying degrees.”
For example, at Consensus, Raczysnki saw Deloitte generate a landlord-tenant agreement with contract automation software and then load it into the blockchain. The tenant’s name, current address and move-in and move-out dates were automatically populated with the contract automation software, and then both landlord and tenant were able to digitally sign the document. If either wanted to access the document again, he or she could do so with a private key (a string of letters and numbers unique to that particular contract). If even a comma were changed by either side, the document would be void. Raczynski saw this as an illustration of how blockchain can improve the ease, swiftness and security of what are now fairly routine legal transactions.
Industry disruption is never any easy thing for any one entity to navigate. Some apprehension is natural, Raczysnki said, but it shouldn’t prevent lawyers from experimenting with working blockchain into their practices.
“Taking a step back from that, it is also a tremendous opportunity for law firms and lawyers to embrace the technology and get a head start on it,” he said.
Specifically, Raczynski sees benefits stemming from:
- Blockchain’s un-hackable security, which will make sharing secure documentation easier, thus providing a smoother and more hassle-free experience for clients.
- The less time needed to execute blockchain-assisted tasks, freeing attorneys to have more time to pursue additional clients and more business.
- The potential cost savings that may come from blockchain technology’s greater efficiency
“Yes, it’s going to disrupt, and yes, some people will get thrown off,” Raczysnki said. “But in the three, five, seven- year window, there’s going to be more business in this area.”
Sameena Kluck, a Strategic Account Executive for Thomson Reuters who works with large law firms, said she’s already seeing the most visionary firms incorporate blockchain technology into their practices.
“What I’ve started seeing from the most sophisticated practices at my firms is that they are not only preparing, but they’re already weaving it in,” she said. “That means being willing to experiment with blockchain to find its highest use, experimenting with drafting smart contracts, designating sources of information and insight on blockchain through the firm and looking across practice areas to pull together interdisciplinary blockchain-focused practice groups.
“It’s not just finance,” Kluck said. “It’s cybersecurity, it’s intellectual property, it’s insurance, it’s energy practices – the most innovative firms are being open-minded and taking a good, focused look at where and how blockchain can make them better and more efficient.”
“I think this is the future,” she added. “Some firms are already there, and some are playing catch-up. There’s just no ignoring it anymore now, though.”