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Blockchain and the Law: Opportunity comes for those who are prepared.

Blockchain and the Law: Opportunity comes for those who are prepared

by Ashwin Gupta

In 2014 I remember agonizing over investing in bitcoin or trying my luck in the stock market. I invested in the stock market because, at the time, traditional wisdom dictated that it was a “bubble” and I was unprepared to learn the mechanics.  To offer some perspective, bitcoin was valued at $770 US in 2014, and its current price is over $29 000. Over the years, I watched some of my peers enriched as bitcoin increased in value exponentially. This choice taught me the value of being prepared in an evolving digital future (and that traditional wisdom can be unreliable).

The legal profession has historically resisted digital implementation.[1][2] But as the legal system is forced to adopt a digital future by the pandemic[3] and technological advances,[4] professionals who are prepared for these changes will have the most opportunity to set the standards for this adoption. The standards set this juncture will impact countless aspects of the legal system like access to justice and legal procedure. As an incoming law school graduate, my interest is no longer merely financial. I see opportunities in improving our legal system through this adoption —assuming I’m prepared.

Preparation

In ushering in the digital future, it’s imperative that legal professionals familiarize themselves with digital tools. I foresee three tools that will drive changes in the legal system:  1. Blockchain 2. Artificial intelligence and 3. Software development. Since this blog isn’t going down anytime soon, I predict that in 20 years or less some level of familiarity will be required with each of these tools for lawyers. At least, in the same way that lawyers are expected to be familiar with the interface of E-mail, but most do not understand what an e-mail provider like Gmail does behind the scenes to keep it all running. I’ll explain why I think so with regards to Blockchain, and I’ll justify my prediction for AI and Software development in the comments to keep the post short.

Blockchain

A blockchain is a distributed database that is shared among the nodes of a computer network.[5] Nodes could refer to multiple systems across the world or a localized system depending on the structure. But essentially, it’s a digital cloud without a centralized storage. The main advantages of having a blockchain to store data is that its immutable and transparent meaning that no one can tamper with the data without leaving a trail and verifying their right to access. Since the data is stored on nodes instead of a centralized system, it’s secured from cyber-attacks. Decentralized security has become an invaluable feature due to a recent increase in cyberattacks.[6] Blockchain could have countless applications to the law, which takes advantage of these features. A few obvious applications which come to mind are: blockchain land title registration, smart contract storage, tokenization, and chain of custody tracking.

Land title registration is a fitting use for blockchain. Currently a property lawyer is tasked with sourcing and verifying all the transfers of title leading up to a novel transfer to verify the integrity of the novel property (liens, covenants, easements, fraudulent transfers etc.). A blockchain storage utilized by the Land Title Office would be able to build those requirements into the system, eliminating needs for lawyers to go through the verification entirely. Although there are significant challenges here, like labor required to digitize those documents in a manner appropriate. If done correctly, this would significantly decrease legal costs for property buyers.

Smart contracts automate the execution of an agreement when all predetermined conditions are met, so that all parties can be certain of the outcome without any intermediary’s involvement or time loss. A corollary to the utility of smart contracts is e-signing. Ethereum currently runs a e-signing feature that costs less than that of DocuSign, and the signatures are independent of the contract being signed which guarantees that all parties receive and sign the same document regardless of timeframe.[7] The smart contract feature has tremendous utility in supply chain, as orders require all parties to be on the same page and typically hinge on conditions that can be predefined for a smart contract purpose. Blockchain based contracts have baked in compliance and there’s no room for misinterpretation. Use of smart contracts reduces legal disputes with vendors, freeing up legal resources for other matters. Use of e-signing reduces costs and frees up time for lawyers and their clients. [8]

Tokenization is fascinating and has the potential to change the landscape of property rights. It allows us to take real world or digital products and place their rights in a digital token. These tokens are traded via smart contracts and are stored on the blockchain. This allows token holders to liquidate and invest in segments of assets otherwise indivisible such as artifacts, artworks, collectables like bottles of wine and many others. This includes many other real and digital world products in the investing market.[9] For perspective, the court could’ve tokenized and divided that infamous Popov v Hayashi[10] game ball instead of forcing a sale. These tokens are already being used for a wide variety of purposes and I’d suggest property lawyers should get very comfortable with how these Non-Fungible Tokens (NFTs) work. [11]

These are just some of the obvious use cases of blockchain in law, but it’s my logical inference that integration and day to day use of these utilities will require local legal professionals (judges too) with some level of blockchain based education. Osgoode hall has a certificate program intended for lawyers called “Blockchain Law”, University of Windsor & UofT offer blockchain courses, and most critically University of Ottawa has a blockchain legal lab (with a twitter account). Passionate students that make good use of these opportunities will be prepared to seize any blockchain opportunities throughout their careers and could help shape a transforming legal system.

Citations

  1. “Impeding Technology – Legal Culture and Technological Resistance” (2020), online: https://theitcountreyjustice.wordpress.com/2020/06/28/impeding-technology-legal-culture-and-technological-resistance/
  2. Ben Mears “Legal Innovation: 5 Experts Predict Future Challenges and Opportunities” (2020), online: https://www.collectivecampus.io/blog/legal-innovation-5-experts-predict-future-challenges-and-opportunities
  3. Clive Rich The Future of Law: Rise of the Digital Lawyer (2021), online: https://www.law.com/international-edition/2021/05/27/the-future-of-law-rise-of-the-digital-lawyer/?slreturn=20211019231524
  4. Vivek Wadhwa, “Laws and Ethics Can’t Keep Pace with Technology” (2014), online: https://www.technologyreview.com/2014/04/15/172377/laws-and-ethics-cant-keep-pace-with-technology/
  5. Luke Conway, “Blockchain Explained” (2021) online: https://www.investopedia.com/terms/b/blockchain.asp
  6. Mirdula Shan, “Blockchain & Healthcare: How CyberSecurity Saves Lives” (2021), online: https://harvardtechnologyreview.com/2021/08/23/blockchain-healthcare-how-cybersecurity-saves-lives/
  7. “Blockchain in the Legal Industry”, online: https://consensys.net/blockchain-use-cases/law/
  8. “What are Smart Contracts on Blockchain”, online: https://www.ibm.com/topics/smart-contracts#:~:text=Smart%20contracts%20are%20simply%20programs,intermediary’s%20involvement%20or%20time%20loss.
  9. Riddle & Cole “TOKENIZATION 101: HOW TOKENIZATION OF PHYSICAL ASSETS ENABLES THE ECONOMY OF EVERYTHING”, online https://www.riddleandcode.com/tokenization-101
  10. https://www.lexisnexis.com/community/casebrief/p/casebrief-popov-v-hayashi

12.Supra note 9.

[1] “Impeding Technology – Legal Culture and Technological Resistance” (2020), online:  https://theitcountreyjustice.wordpress.com/2020/06/28/impeding-technology-legal-culture-and-technological-resistance/

[2]Ben Mears “Legal Innovation: 5 Experts Predict Future Challenges and Opportunities” (2020), online: https://www.collectivecampus.io/blog/legal-innovation-5-experts-predict-future-challenges-and-opportunities

[3] Clive Rich The Future of Law: Rise of the Digital Lawyer (2021), online: https://www.law.com/international-edition/2021/05/27/the-future-of-law-rise-of-the-digital-lawyer/?slreturn=20211019231524

[4] Vivek Wadhwa, “Laws and Ethics Can’t Keep Pace with Technology” (2014), online: https://www.technologyreview.com/2014/04/15/172377/laws-and-ethics-cant-keep-pace-with-technology/

[5] Luke Conway, “Blockchain Explained” (2021) online: https://www.investopedia.com/terms/b/blockchain.asp

[6] Mirdula Shan, “Blockchain & Healthcare: How CyberSecurity Saves Lives” (2021), online: https://harvardtechnologyreview.com/2021/08/23/blockchain-healthcare-how-cybersecurity-saves-lives/

[7] “Blockchain in the Legal Industry”, online: https://consensys.net/blockchain-use-cases/law/

[8] “What are Smart Contracts on Blockchain”, online: https://www.ibm.com/topics/smart-contracts#:~:text=Smart%20contracts%20are%20simply%20programs,intermediary’s%20involvement%20or%20time%20loss.

[9] Riddle & Cole “TOKENIZATION 101: HOW TOKENIZATION OF PHYSICAL ASSETS ENABLES THE ECONOMY OF EVERYTHING”, online https://www.riddleandcode.com/tokenization-101

[10] https://www.lexisnexis.com/community/casebrief/p/casebrief-popov-v-hayashi

[11] Supra note 9.

Technology as a Barrier to Justice: Cautioning Legal Tech Designers

Harjote Sumbal

Technology alone is not the complete solution to Canada’s access to justice problems. Usage of technology can encounter resistance, the measures may ultimately be unsuccessful, and the approach can actually result in the creation of new barriers to access. Professors Roger Smith and Alan Paterson identify “digital exclusion” with its three “digital divides” as a good place to start in assessing challenges of technological reform: (1) physical access to the relevant technology, (2) the technical ability to use the relevant technology, and (3) the cultural inclination to use the relevant technology.[1] Designers of legal tech would do well to anticipate the barriers to justice their applications may create so that they can address them before they manifest. Addressing the second divide – technology itself as a barrier – should drive legal app design to ensure implementation of technology does not widen the access to justice gap further.

A successful application is driven by user demand, which in turn requires trust. Technology can indirectly risk undercutting the administration of justice and compromise user trust. Mistrust of the legal system is a noted barrier to access,[2] so the security of technological processes is essential to make user adoption a possibility. For example, Abedi, Zeleznikow, and Brien have identified three core “facets of security” Online Dispute Resolution (ODR) systems must ensure: (1) information security and confidentiality, (2) privacy of the parties involved, and (3) authentication of parties in transactions and communications.[3] If technological reforms are implemented without due consideration of security issues, legal tech may serve as an additional barrier for wary users rather than increasing access to justice.

Digital divides in accessing technology can serve as significant barriers to access. While cultural resistance speaks to the acceptance of technology by the existing legal industry structures, physical access and technical ability are both barriers for potential users that may actually want to engage with legal technology. While these digital divides can affect any given individual, their impact is likely to most strongly affect vulnerable groups like lower socioeconomic communities, elderly people, Indigenous peoples, and those with language barriers, whether they are refugees, immigrants, or citizens.[4]

In some cases, it is possible to address these barriers within the technological tool’s infrastructure. For example, the Civil Resolution Tribunal (CRT) attempts to address potential language barriers by providing information on the CRT, its process, limitation periods, and available help resources in multiple languages.[5] It also provides additional resources for Indigenous users and directs those without computers to ServiceBC locations or paper forms.[6] The CRT’s recognition of potential technological barriers is an important start. However, not all technology platforms are constructed in the same manner, nor are they as comprehensive as ODR platforms tend to be. Justice apps are more individualized in their scope and user design. For example, the MyLawBC website is designed, amongst other capabilities, to allow users to construct their wills, but offer none of the language, Indigenous, or general helper resources of the CRT described above.

The need for accessibility tailored to vulnerable populations is apparent. A 2008 Law Foundation of Ontario report stated those in vulnerable populations “need to receive direct services rather than rely on self-help”, as legal trouble often piles on to the barriers they already face.[7] As self-service is one of the key features of user-targeted legal technology to save paying legal fees, tools that are too daunting to use are essentially useless. Without specific consideration of vulnerable populations and their userability, technological reforms risk creating a further divide between users and access to justice.

Technological tools like ODR and justice applications have great potential. However, the design and conception of technological tools must consider the specific needs of vulnerable populations or they risk exacerbating the access to justice problem. In order to successfully facilitate greater access to justice, legal tech designers must exercise empathy with target populations when conceptualizing solutions.

[1] Smith, Roger & Paterson, Alan, “Face to Face Legal Services and their Alternatives: Global Lessons from the Digital Revolution” (2014), online (pdf): Strathprints <https://strathprints.strath.ac.uk/56496/1/Smith_Paterson_CPLS_Face_to_face_legal_services_and_their_alternatives.pdf> at 19.

[2] Tania Sourdin, et al, Digital Technology and Justice: Justice Apps, (Milton: Routledge, 2020) at 23.

[3] Fahimeh Abedi, John Zeleznikow & Chris Brien, “Developing Regulatory Standards for the Concept of Security in Online Dispute Resolution Systems” (2019) 35 Computer Law & Security Review 1.

[4] Sourdin, supra note 2 at 66.

[5] Civil Resolution Tribunal, “Resources” (2021), online: < https://civilresolutionbc.ca/resources/>.

[6] Ibid.

[7] Sourdin, supra note 2 at 68; See Karen Cohl & George Thomson, “Connecting Across Language and Distance: Linguistic and Rural Access to Legal Information and Services” (December 2008), online: The Law Foundation of Ontario <https://lawfoundation.on.ca/download/connecting-across-language-and-distance-2008/>.

BLDC 2020

Today I had the opportunity to participate in the 2020 Boston Legal Design Challenge (#BLDC2020). It was the first year this competition was held online, and they were therefore able to include teams from outside of Boston proper.

Throughout the day we were invited to participate in exercises with our team members. Our team, the TRU Legal Architects was the only team from Canada. We were accompanied by a facilitator from Liberty Mutual Insurance in a zoom breakout room. Our facilitator led us through a collection of exercises where we collaborated through Mural.co in order to strategize and discuss what we were going to pitch to the judges.

At the end of the day, we competed against the 9 other teams and presented our idea to a panel of 3 judges. Ultimately we pitched the idea of an automated legal consultant who would provide assistance to small firms and sole practitioners looking to digitize their practice at little to no cost. We wanted to provide a resource that would help facilitate a seamless transition online for those who do not have the same resources available to them as would be found in a larger firm. We were thrilled to come in 3rd overall.

A lot of the presentations focused on access to justice and products that would help move the legal profession into the future. It was a very valuable experience and I think the people who participated will undoubtedly do great things for the profession in the future.

Zooming in on Legal Tech in 2020

It happened: I got old.  I don’t know exactly when it happened. Maybe it happened this semester. Maybe it happened over the summer. I suppose it could have happened last year and I just didn’t notice.

I’m not even thirty yet, and still, somehow, I have found myself at the optometrist getting fitted for bifocals so I can read the tiny print in the textbooks without giving myself a massive headache. I got a super ugly pair of orthopedic slippers. I also had set up my work station in a way that didn’t hurt my back and I had to stop using my phone so much, because oh my god, my thumbs were cramping so badly.

I have no idea how to talk to my teenage siblings anymore. They want to do all these phone-based things with me, but I spend so much time staring at a screen, that I find myself asking if we can just go play outside like we did back in the olden days.

A year and a half ago, I was working in a support role at a law firm and was running around the office helping with computer setup, database issues, software problems, whatever. But something changed.

Now, my girlfriend (who is a whopping 6 months younger) cannot understand why I don’t know how to use all the new Instagram features.

I used to be baffled by the baby boomers in my workplace who didn’t know how to edit a word document or conduct a basic document search on the firm database.

But now, I must say, I get it.

Sometimes, the font is just too small. Sometimes, the program set-up, or day to day functionality, is just so complex or so filled with bugs, that it can feel impossible to use. Sometimes, the program just isn’t intuitive, and the setup or navigation process is more complicated than the task you need the program to complete. Sometimes, the help line is closed and you’ve got a thousand other things on your plate that needed to be done yesterday.

I never thought I’d say this, but boomers, I get you.

I get you and I’m sorry for shaming you for your technological deficiencies. I now understand that in order for the field of law to step into the 21st century, we have to make legal tech more user-friendly. No senior partner is going to want to relearn their entire work system at a point in their career when they are experiencing peak success.  If I ever find myself in a web design role, I promise to make the font adjustable and organize the contents logically so that you can easily find whatever it is you need and get back to your shuffleboard game.

To my young gen z friends: you can laugh at me and my reading glasses and my misuse of snapchat filters all you like, but remember, you’re next.

Big Issues for Small Town Law

Bryce Gardner 

Discussions related to access to justice often discuss the unaffordability of lawyers to a regular person,  or the over-complexity of the law to the non-legal mind. These issues become irrelevant though when there simply are not any legal resources available in your area, a problem all too common in today’s small town Canada.

Nationally, only 8.7% of new lawyers (having less than five years of experience) practice in a rural setting. A survey of the Law Society of British Columbia found that most students would leave the province before considering practicing in a rural area. [1] Of those lawyers who do work in small towns, most are nearing the age of retirement. In B.C. the typical age of a lawyer is about 48, but that can skew to upwards of 52 in smaller communities. In Castlegar, B.C. it’s 65. [2] This makes sense. Most law students come from the city, and why would they ever want to leave the bars, malls and restaurants of the big city to live in a town that only has two traffic lights and the only night club is the 24/7 McDonald’s lobby?

On top the lifestyle issues, there are many obstacles that present themselves to a future small town lawyer. Small town law firms do not have nearly as many resources to recruit and hire potential successors compared to their bigger counterparts. Small town lawyers often have to provide much more general advice on a broad range of topics, something that is hard to do in a legal world where people are encouraged to specialize. The biggest obstacle is the financial aspect. Small town firms often have to start from the ground up and law schools do not teach much in terms of practical business operations. Small town lawyers often earn less than a Vancouver or Toronto lawyer but work fewer hours. As with any obstacle, however, all that is needed to overcome these issues is some creative thinking and innovation.

The Canadian Bar Association’s Rural Education and Access to Lawyers Program (REAL) has already tried to fulfill some of the demand for small town lawyers across BC. By helping find summer positions and providing funding, this program helps to give law students a taste of small town law with the hope that they will stay.  In 2010, the Law Society of Manitoba introduced a program to offer a limited number of law students the opportunity to have their student debt forgiven (up to $25,000 per year of tuition and living expenses) if they work in an underrepresented community. [3] These programs do not do enough though, as they often only entice law students who already came from small towns. Enticing those born and raised in the city is much harder.

If the Canadian Bar Association wants to get more lawyers in small towns, I recommend they should try the following:

1)  Use lessons learned from this pandemic about working remotely. So many people have been working from home and so many people will not want to return to their commute once things return to the (new) normal. Many of the small town lawyers I have met work out of home offices and never had a commute to begin with. Additionally, many lawyers have been forced to conduct research online rather than relying on a physical library. Let people know that if they like working from home it is all the more possible as a small town lawyer.

2) Establish a legal incubator within relevant communities that would provide legal and business training to articling students and new lawyers while at the same time providing affordable and accessible legal services to people in rural and remote communities. [4]

3) Better educate law students about the benefits of small town lawyer life, such as more affordable housing and lower living costs, fewer working hours (on average) and generally more meaningful work right out of law school (rural lawyers often have complete control over an entire case).

4) Provide law students with shorter programs (such as one week) to job shadow rural lawyers and see what life is like, without having to commit several months over a summer.

Perhaps I have now convinced you to give small town law a try (though statistically, probably not).  Like any access to justice problem all we can do is think about it and try to figure out solutions. If anyone wants to discuss further I’ll be at McDonald’s tonight having a drink.

Sources:

[1] Tonya Lambert, “Promoting the Practice of Law in Rural, Regional & Remote Communities” (January 7, 2020), online (blog): Law Now <https://www.lawnow.org/promoting-the-practice-of-law-in-rural-regional-remote-communities/>. 

[2] Jim Middlemiss, “Small communities struggle to pry lawyers from Canada’s big cities, despite promise of jobs”, National Post  (Oct 1, 2013) <https://nationalpost.com/news/canada/small-communities-struggle-to-pry-lawyers-from-canadas-big-cities-despite-promise-of-jobs>.

[3] Lambert, supra note 1.

[4] Ibid.