In my first summer of articling at a litigation focused firm, it became apparent to me how slow, tedious, and outdated the litigation process in British Columbia is. Every summer student has had to suffer through sprinting to the registry to file an application in time or ensuring the opposition is served before the 4:00pm deadline. In addition to these two examples provided, there is also a separate issue of the lack of modernization within legal practice. Tasks, procedures, and practices can become obsolete and much more efficient with the adoption of blockchain technology. We live in an age where technology is exponentially growing, so, why has the legal community been slow to adopt and accept this revolution?

It takes time to learn and integrate new technology into a legal practice. I believe senior lawyers think that they can wait out the changes that are inevitably coming. This suggests they assume that they will retire before these systems are implemented. Furthermore, they hold the belief that adopting this new technology will impact their bottom line. This demonstrates lackadaisical thinking. Ultimately, a lawyer’s focus should be to provide the highest quality service to their client, at a price that is akin to the market. Therefore, if the market price of a service is under cut or reduced, the end user will likely seek change. Clients pay thousands of dollars during litigation, but with the adoption of blockchain, lawyers can reduce the costs to the client, allowing for more access to legal services. But, what is blockchain technology and how can it work within the legal sector?

Simply put, blockchain technology is a decentralized system that utilizes individual computers as data storage nodes, creating distinct “blocks” of data.[1] This storage will take place on multiple computers and create a “chain”. The blocks in this chain act to verify the integrity of the documents.[2] Traditionally when storing data, the documents would be stored on a centralized server. This server could be owned by google, apple, etc. Blockchain creates a chain of transactions, using individual blocks. When changes to a document are made, the blocks in the chain will verify the legitimacy of the new data. Further, there are different types of access that can be granted to blockchain technology. These are: public vs. private & permissioned vs. permissionless.[3] Each of these can be used in a legal practice in their own capacity. These are some of the appealing benefits of the adoption of blockchain technology by the legal profession. By decentralizing the storage of data, it creates further accessibility to legal resources.

Blockchain technology creates higher accessibility. This means the barriers to acquire legal services are reduced. It allows for safe and secure digital signatures and a storage method secure from alteration or change.[4] An  example is the notarization of a document, using the verification system in block chain. It would be unnecessary for a lawyer or notary to witness said signatures. Something that would generally cost a few hundred dollars could now become free! This can also be applied to transactional work, such as real estate transactions or the transfer of shares in a business. It eliminates timely tasks associated with completing these transactions. Further, automated, scripted, and smart contracts can reduce costs to the client. These streamlined processes create more accessibility to legal services, by reducing hefty legal fees.[5]

There are further avenues to reduce the end cost to the client. For example, automation allows for several administrative tasks (i.e.; filing, formatting, grammar review, etc.) to be done using a simple algorithm.[6] Most technology can seamlessly integrate into existing management systems. Further, a cost-efficient algorithm can be used to manage escrow (trust) accounts. This can reduce the risk of lawyers in British Columbia violating trust accounting rules. The algorithm will significantly reduce the costs associated with the manual management of trust accounts.[7] Reducing costs to the end user will increase the size of the market for legal services. This will theoretically help to balance the losses that firms and individuals will face by adopting this new technology.

There are several methods that will allow for blockchain technology to both modernize and revolutionize the way that we practice law. Cost efficiency and accessibility are at the forefront. In many ways, the lack of technological innovation in the field of law could classify our profession as “prehistoric” when it comes to our use of technology. I am not suggesting that we allow computers to replace lawyers, nor do I believe that they will. I am suggesting that by mending the apparent inefficiencies, that it will both benefit the user, as well as the practitioner.

[1] Consensys, “Block Chain in the Legal Industry”: https://consensys.net/blockchain-use-cases/law/

[2] Ibid

[3] IBM, “Basic Blockchain Security”: https://www.ibm.com/topics/blockchain-security

[4] Supra note 1.

[5] Sascha Mehlase, “Legal Tech: How Blockchain Can Easily Transform the Legal Profession”: https://www.abclegal.com/blog/legal-tech-blockchain

[6] Ibid

[7] Ibid, and Supra note 1.