Due to its ability to store records on a transparent ledger with a high level of security, the implementation of blockchain for legal services is going to see a tremendous increase in the upcoming years.
The use of technology is increasing within the legal industry. Blockchain continues to be at the top of the conversation when it comes to discussions regarding the future of technology in the legal industry. Blockchain has already disrupted many industries such as media and entertainment, finance, and tourism. And the legal sector will be no exception to this trend. With a transparent, robust, and secure framework, blockchain has the potential to change the way the legal sector operates completely. From executing smart contracts, bringing transparency in legal paperwork, to simplifying most of the legal processes, blockchain is going to revolutionize the legal services sector.
Benefits of Blockchain in the Legal Industry
Blockchain will hugely benefit all the parties involved in the legal services. It can simplify most of the traditional processes followed in the legal sector and prove to be highly time and cost-efficient. With a decentralized framework, the transparency in legal procedures will improve to a great extent. Here’s a look at six potential benefits of blockchain for legal services.
1. Ensuring Transparent Paperwork
It’s no secret that the legal sector involves tons of paperwork. Keeping a historical record and maintaining the authenticity of legal papers involved in cases is a challenging task. Even though legal firms have switched to digital methods of storing data, it is mostly in the form of simple paper scans. There are instances of disputes over the legitimacy of the filed paperwork. With blockchain, legal firms will be able to maintain accurate custody of records and minimize the probability of disputes. Once the details of the legal paper are entered in the blockchain framework, they can’t be modified and changed by other people. Thus, the authenticity and legality of papers will become more transparent with the adoption of blockchain technology.
2. Executing Smart Contracts
Currently, legal contracts require physical signatures. The process can prove to be lengthy and time-consuming, depending upon the availability of parties involved. Also, manual processing of legal documents can lead to human errors. Blockchain can help overcome these issues as blockchain supports smart contracts. Smart contracts can be executed automatically when all the requirements pertaining to a legal agreement are met. This enables a more accessible and transparent method of creating and executing agreements. The involved parties can create a smart contract, and lawyers can validate the legal agreement if it adheres to the laws and regulations involved. The contract can then be sent to the signing authority, who can digitally sign the said agreement. Once the smart contract is signed, it can be deployed on the blockchain, which can be viewed by the parties involved. Thus, smart contracts can automate legal operations and helps to get rid of legal issues. Additionally, there will be no need to maintain physical papers as in the case of traditional paperwork.
3. Ensuring the Authenticity of the Chain of Custody
Collecting evidence is the essence of any investigation process. Validating the findings from a crime scene and documenting legal information is crucial, especially when the case can drag for years. Evidence collected in the initial stages of a case can become critical in the later stages. If the chain of custody is maintained and documented regularly and properly, it will become much easier for legal authorities to locate the information required. Maintaining paper-based documentation for the chain of custody can prove to be a complicated process, vulnerable to errors or modifications due to human intervention. Blockchain can help simplify this process. Authorities can look out and trace the details of evidence using the blockchain framework. The evidence collector will need to enter all the necessary details regarding the evidence on the blockchain. This makes it easy to trace back the evidence details even after years. The authenticity of the evidence is also guaranteed as the block details cannot be modified by other individuals. Therefore, due to the unchangeable and auditable nature of blockchain, authorities can be assured that the evidential information remains the same throughout the duration of the case.
4. Enabling an Easy Litigation and Settlement Process
Litigations comprise of various activities to be executed before, during, and after a lawsuit to impose legal rights. They may include negotiations, appeals, and arbitrations. Similar to other legal processes, litigations can be time-consuming and involve a tremendous amount of paperwork. The entire litigation process can be recorded on a blockchain. Lawyers can register on the blockchain platform by providing information regarding their license number, expertise, and contact details. The plaintiff can do the same and hire a lawyer to get legal support for the concerned litigation. After the litigation is filed, the defendant will get a notice to respond to the allegations. The defendant, too, can submit his response on the blockchain. This ensures that every bit of information is decentralized and not tampered with. It makes it much easier for the presiding judge to pass the verdict based on the information shared on the blockchain. Thus, the entire litigation procedure is simplified and leads to a significant reduction in the time required to declare a verdict, resulting in the quick settlement of cases. If, in any case, an old case re-opens with a new judge on board, the information stored on the blockchain can be accessed to gather all the documents and information required over again. Also, it will eliminate the need for maintaining long paper records over a long period of time.
5. Safeguard Intellectual Property Rights
The Law has struggled to safeguard the intellectual property rights of individuals and corporations alike. The US Patent and Trademark Office (USPTO) received more than 440,000 new trademark applications in 2017. A bulk of the filings have to undergo a manual review. The process proves to be lengthy as well as time-consuming. The USPTO took an average of about 16.3 months to complete the first action pendency and 24.2 months to perform a total pendency. Blockchain can completely transform the way patents and trademarks are handled. Content creators can upload their intellectual property on the blockchain for patenting purposes. The creator will need to upload his details such as name, address, designation, and the concerned patenting object. Since this information will be stored on the blockchain, the data can’t be disclosed to the public without the user’s consent. In case of a dispute, the patenting authority can track the authorship of the patented object. Due to the transparent nature of blockchain, every step in the patenting procedure can be time-stamped, and the details can be saved without the possibility of modification. This can tremendously bring down the time required to solve dispute cases as blockchain has time-stamped and auditable records. Thus, the process of patenting and guarding intellectual property rights are streamlined and become time-efficient.
The adoption of blockchain for legal services presents unique opportunities for law firms, the judicial system, and the ordinary citizen availing legal advice and services. However, it is upto the legal fraternity as to how quickly they embrace blockchain technology. The rise of blockchain in the legal industry is inevitable and will replace most, if not all the procedures in the legal sector.