Forward-thinking law firms, in-house legal teams, and ALSPs aren’t wrong for keeping blockchain on their radar. After all, there’s no harm in staying aware of nascent technology that may impact the industry a little too soon rather than too late.
Where we Currently Stand:
Recently, Bettina Warburg, Technology Investor and Visiting Professor at University of Texas, gave an interesting and informative talk on blockchain at LegalTech 2020. She basically laid out the stages of technology innovation as such:
- Infrastructure
- Middleware
- Applications
With the internet we know, infrastructure was everyone agreeing to build the world wide web using TCP/IP; middleware was the development of the different coding languages used to create pages on that infrastructure; and applications are just that — the tools we use to do certain tasks. Warburg said that with blockchain, “We’re currently at about the same place we were in 1995 with the internet.”
She went on to discuss three areas blockchain is most likely to impact the legal industry, once applications are developed and adopted.
eDiscovery:
This seems an obvious one, in that any new source of electronic data – especially if it’s used for enterprise or corporate purposes and thereby is subject to civil litigation – will need to be discoverable. So in the same way that technology vendors were figuring out how to collect, process, and review emails in 2006, the same will have to happen for blockchain-based applications. And along with the technology, guidelines like the Federal Rules of Civil Procedure (FRCP) and accompanying court-rulings and case law will shed light on how our current processes and solutions will change.
Compliance Innovation:
Currently, compliance is carried out by sampling percentages (of a supply chain, engagement, enrollment, etc). Because blockchains are immutable and transparent to everyone, compliance can be carried out for entire businesses in real time, rather than a sample at intervals. On the flipside of this issue, blockchain tech isn’t GDPR compliant for the same reasons, which would require some type of blockchain pruning, so that people can opt out of sharing their personal information, even though it still exists within the blockchain.
Code as Law:
Because blockchain technology allows machines to conduct business and transact currency within the parameters of their coded directives, it could set the precedent of machine code being adopted into law, with machines themselves then being able to carry out arbitration. If this is beginning to sound like sci-fi, you’re not alone. But then again, we thought the same about pocket computers / communicators straight out of Star Trek not so long ago.
Conclusion:
There’s a lot of potential yet to be understood from blockchain. But if you think about the early legal tech companies that were around in the 90s, they were doing very different things and solving different problems than we have today. The successful were able to take that foundation and experience in the industry and pivot into the needs and challenges that came in the aughts and teens. And the same will happen in the coming decade.
As Olga V. Mack, CEO of Parley Pro, said in a recent Above the Law piece about blockchain and AI, “Your focus must be on whether a solution solves your problem and allows you to do things better, not what technology powers it.” Which is why we must keep a clear perspective on emerging tech and stay focused on the very real challenges the eDiscovery industry is still facing every day, like how to effectively deal with Slack data or helping the corporate legal department move from being a cost center to enabling business growth. When we start knocking these things out of the park, then maybe we’ll be ready for blockchain.
Published February 21, 2020.
