The reason is pretty simple: most of the legal sector practices are linked to bureaucracy and its well-known long procedures. Especially when it comes to technological innovations, laws and regulations always feel outdated and inadequate to support changes in society. While in some jurisdictions it is easy to tackle such issues, in many countries is still quite difficult to implement Blockchain. The conflict between the immutable nature of Blockchain and GDPR, difficulties in implementing smart contracts in some jurisdictions, and the low amount of crypto-friendly banks in Europe are clear examples of this trend.
How can Blockchain help the legal sector?
Blockchain is based on a distributed ledger that creates records of any digital transaction without the need for a central authority (except in rare cases). The reason why it works is the fact that this technology is widely accepted, and this happened because it was initially praised for its transparency and immediacy in recording transactions.
In this moment of history, law firms have many challenges to face, such as quickening bureaucratic procedures and saving money at least for recurring operations, such as renewals or terminations of contracts, which often consist of a series of operations that do not really need the attention of a human to be performed. Operations that could be automated by implementing smart contracts.
At the same time, applications of Blockchain in the legal sector can guarantee a better tutelage of users’ data and the chance to access to data that cannot be manipulated, so having shared, safe databases at their disposal would help, too.
Are applications of Blockchain in the legal sector safe for everyone?
Blockchain is appealing large firms in the sector because it is secure and fast, but if law firms want to work with it, they need advice from consultants with the right expertise: Blockchain is still a new technology, and there are very few people who really know how it works and its real implications.
In fact, while in the USA and Asia, big firms with research & development departments are already working on it, here in Europe there is still uncertainty around it, although something is changing.
Repercussions of Blockchain are still uncertain, and legal companies have questions that will likely remain unanswered until Blockchain becomes widely used.
Many law firms who have implemented Blockchain and smart contracts admit they have been billing fewer hours,
Insurance companies also experienced a drop in claims, and clients changed their habits, calling lawyers only when they really needed.
On the other hand, requests of assistance from big companies to law firms increased with the implementation of Blockchain. This means that all Blockchain is doing is satisfying a natural demand coming from the market: companies need quick and easy legal services, and Blockchain is the key to deliver them.
Applications of Blockchain in the legal sector are really changing this kind of relationship, and the next generation of lawyers will need to be ready for it.