A law firm in New York is reviewing how the use of the blockchain technology can remove many of the manual steps that are required when it comes to executing smart contracts.
The law firm, Hogan Lovells, is considering how smart contracts and the blockchain can automatically execute agreements without the need for human interaction, thus helping to free up lawyers time.
In a blog from the Wall Street Journal, the use of smart contracts will ensure that terms of a contract are enforced in a faster time; however, this also means that there needs to be a closer relationship between the lawyers, clients, and the computer programmers who will be writing the smart contracts.
According to Ted Mlynar, a partner at Hogan Lovells, there is currently a big divide between those involved.
The programmers think in terms of bits and bytes, while the contracting parties have been doing these types of agreements for years. They don’t understand each other.
To solve the issue of traditional contracts and smart contracts requires a lawyer or lawyers who are able to present the necessary expertise regarding a deal in addition to the technical expertise to understand the code within the smart contract and how they can work together.
For now, though, paper contracts are likely to remain in place for years to come. However, while lawyers are still experimenting with smart contracts, if done right they could potentially present the ideal answer to helping free up lawyers time when it comes to agreements between parties.
Could Smart Contracts Threaten Jobs?
Of course, many think that the use of blockchain-led smart contracts could threaten thousands of jobs.
In June, one of Australia’s top law firms, sent a report to its clients informing them that the future of the business model that lawyers profit from due to an absence of trust in organizations working with each other was under threat from the blockchain and smart contracts.
Others were preparing themselves that the technology was likely to threaten jobs and the role of lawyers intermediating negotiations and disputes.
Another factor to consider is the fact that the use of blockchain and smart contracts brings its own legal issues.
These include how terms are interpreted, how they are written, and how smart contracts interconnect with legal areas already established. It requires lawyers to have the expertise to go through a area, such as the laws governing insurance contracts, and understanding how a blockchain smart contract would work.
It remains to be seen, however, whether the role of smart contracts will be applied in law firms or whether paper contracts will remain the contract of choice.
Featured image from Shutterstock.
You may be interested
JPMorgan Chase Scores Another Bitcoin Technology PatentBrian Evans - Jul 22, 2018
Banks have shown a keen interest in Bitcoin technology over the years. Various patents have been filed by these financial institutions to explore new potential business use…
Crypto Markets See Solid Upswing, Bitcoin Pushes $7,500Brian Evans - Jul 22, 2018
Crypto markets seeing mostly green today, with total market cap up over 2% and Bitcoin pushing $7,500
Bitcoin Makes Major Headway: CFA Exam Will Now Include Crypto TopicsBrian Evans - Jul 22, 2018
Cryptocurrencies and blockchain technologies are making serious headway in the financial industry, the most recent sign being the decision by the CFA Institute, which offers the Chartered…