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Realizing Blockchain’s Potential in the Modern World Legal Industry
As the role of innovative technologies is getting bigger in the legal services industry, the question of how and in what ways it would impact the law operations is one of the top concerns among legal departments, law schools and legal firms these days.
In the present world legal industry, keeping the historical records of the cases is one of the most challenging and difficult tasks for every legal advisor. Almost every lawyer is buried under the mountain of paperwork. Keeping that in mind, legal industries are looking to revolutionize their operations with the distributed ledger technology like Blockchain. It is considered a transformative force behind the changes that are set to take place in the legal industry in the coming future.
Today, Blockchain has become an eventful element that could disrupt almost every industry around the world. It is not just the latest technology that legal firms are using for client matters, but it has become a core way of how modern legal practice operates. It is a recent addition to the legal sector that has a significant impact on crucial law processes, including how law firms would serve the clients and which law practices would the firms adopt to make the most of this innovative technology.
Realizing Blockchain’s potential to streamline the legal operations has proven more elusive than expected. That’s why legal industries are interested in incorporating Blockchain to maintain an accurate chain of custody and other legitimate activities with the technology.
Here are some noteworthy benefits that Blockchain brings to the table for the legal industry:
Enhanced Security: As per the recent reports by the National Cyber Security Center, almost 60 percent of law firms have faced cyberattacks in 2017, which proves that the legal industry is the primary target for hackers. Keeping that in mind, law firms are heading towards the Blockchain incorporation so as to improve cybersecurity and reduce the amount of data loss due to cyberattacks.
Blockchain technology stores the information over a server network and provides complete data access to all the systems attached to it. This implies that a hacker needs to assault every individual PC to hack the entire server network which would be a tedious and troublesome task. As data flows across various parties in the legal industry, law firms need to exchange information with clients and contractors while maintaining strict control over responsibilities and jurisdictions.
This makes Blockchain the most secure and promising platform that could play a significant role in managing and sharing data without risking leakage and ambiguity over responsibilities and ownership.
Transparent Documentation: The biggest advantage of using Blockchain in the legal industry is the usage of smart contracts which makes the documentation and contracting process more efficient & transparent. Apart from that, trust is one of the major issues that smart contracts overcome. In the present world legal industry, lawyers perform the task of contract management and ensure that both parties physically sign contracts for binding a legal agreement. However, the manual processing of legal documentation could be vulnerable to human errors.
This is where Blockchain comes to aid and makes the legal documentation more accessible and clearer for both parties. Besides, it also reduces the cost of generating and securing legal documents by executing smart contracts. These contracts can be potentially created and executed directly between the parties with minimal lawyer involvement. Utilizing smart contracts could also help legal professionals to store and share digital information to the applicable parties in real-time by eliminating the need to draft contracts in courtrooms.
Dispute Resolution: There are several areas in the dispute resolution that could greatly benefit from Blockchain implementation. From law enforcement officers to parole officers, records created by this distributed ledger technology can be easily shared among all the players working in the system. The modern-day dispute resolution is very costly, complex and time-consuming.
As per the recent stats by Finra, almost 3,630 arbitration cases were filled in 2018, whereas 4,959 cases remain open and 3,129 cases have been closed during the calendar year. This report also shows that such cases could cost $100,000 per case while additional court costs, reporters’ fees, filing fees, and venue rental, etc. could also add to the overall tab of dispute resolution. Arbitration cases are an integral part of the business landscape but using Blockchain could lessen the impact of these issues by reducing time, effort and financial costs.
From the above-written facts, it’s expected that the Blockchain technology would definitely transform the legal market in the coming future by eliminating several operational bottlenecks and opening new revenue generation channels for law firms.
The implementation of Blockchain and its regulation poses no danger to the legal sector and will play a crucial role in the expansion of the legal industry. As this innovative technology is evolving and becoming more popular in the legal industry, it’s time for legal professionals and techies to work together to share and expand their expertise in the technology.
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