Can lawyers be replaced by smart contracts?

financedude85's picture

Ignorance of the law excuses no one. Every business has to be aware of and abide by regulations that concern their operations. It’s not only large corporations who should be aware of certain legal liabilities and issues.

Ventures exploring innovation may touch on legal gray areas and even small businesses still have to deal with routine compliance. Having legal input is necessary to mitigate exposure and risks down the line.

Unfortunately, legal expertise is often seen as a luxury especially by startups and small enterprises. Legal services aren’t exactly cheap. However, forgoing legal consultations can be quite the risky especially for businesses operating in highly litigious societies.

Any hint of bad service can be seen as an opportunity for a lawsuit. Suits, no matter how frivolous, can be unnecessary burdens for growing operations.

Technology is starting to offer solutions to this concern. Blockchain, the technology that powers cryptocurrencies like bitcoin, provides secure and immutable record keeping.

This capability makes it promising for legal applications. New blockchain platforms are now also capable of enabling smart contracts – software that could record the terms of agreements on the blockchain and even automate their fulfillment as conditions are met.

As such, smart contracts appear poised to take over certain legal functions. But will they be enough to replace lawyers?

Smart contracts made easy

Many ventures are already embracing blockchain. Secure and immutable records are crucial in most business functions so applications of blockchain are now explored in a variety of industries.

Even large enterprises and traditional financial institutions have embarked on their respective blockchain projects. Gartner projects that blockchain and smart contracts will be in use by more than 25 percent of organizations worldwide by 2025.

The emergence of blockchain platforms such as Ethereum allows for wider access to smart contracts development. Developers can even use these platforms to create their own smart contracts and cryptocurrencies.

However, as software, smart contracts have to be developed and tested properly. This requires technical expertise to accomplish. Due to the current demand, hiring blockchain developers can command be quite expensive and such costs could very well offset the supposed advantage of using smart contracts over traditional legal services.

Fortunately, new blockchain ventures seek to remedy this. For instance, Jincor solves the technical complexity of smart contract and cryptocurrency development by “attempting to provide digital jurisdiction for B2B interactions”.

Jincor’s platform allows organizations to implement these functionalities through user-friendly and affordable means. The platform is also set to further extend the platform’s capabilities to enable companies to facilitation of contracts on the blockchain environment.

This would also allow for users to settle disputes through decentralized arbitration.

“Each company created in Jincor ecosystem has its own digital profile, which can be verified by its business partners (like banks, brokers, legal service providers etc.), listing of participants and one or few cryptocurrency accounts so that they can instantly perform regular financial operations automatically.

In the long-term, Jincor is meant to become a unique environment for implementation and development of various blockchain enterprise applications,” wrote Vladislav Kirichenko, the CEO and co-founder of Jincor.

Smart contract advantages

The ability to implement smart contract that could readily benefit organizations. For small to medium enterprises (SMEs), contracts are essential in defining the scope of transactions such as deliverables and costs.

Having these details in writing offer businesses protection in case disputes arise from transactions. Smart contracts leverage blockchain’s transparent and immutable records making them potentially more secure than traditional legal documentation.

Because of this, smart contracts could even allow for large transactions to be conducted purely online. For example, real estate transactions have mainly been face-to-face and offline.

They also require several intermediaries such as brokers, lawyers, and banks to facilitate each step of the process.However, since smart contracts could already keep track of the terms of an agreement and automate enforcement, third party involvement may not be necessary anymore.

Blockchain and smart contracts can be a difference maker to organizations. Accenture estimates that investment banks could save $12 billion a year on infrastructure costs by using blockchain and smart contracts.

Not only do smart contracts have the potential to offset intermediary costs, but automation could also improve overall business efficiency leading to better experiences for customers.

Admissibility and enforceability

Perhaps the greatest hurdle for blockchain and smart contracts is regulation. As an emerging technology, blockchain has yet to enjoy widespread legality. General admissibility and enforceability of smart contracts is still a work in progress.

Despite this being the case, smart contracts as technology can readily be used to automate transactions. Businesses could already benefit from the reduced friction in the fulfillment phase of agreements.

Various territories are warming up to blockchain as a technology. Japan has declared bitcoin a legal payment method. Sweden is also testing blockchain for its land registry. In the US, Arizona passed a law recognizing smart contracts and blockchain signatures.

Vermont and New Hampshire are also working on similar legislation.

Platforms like Jincor also help organizations to immediately be able to use smart contracts despite the slower adaptation of regulations. Jincor verifies the identity of individuals and companies that use the platform to ensure that transactions occur between legal entities.

Jincor also lends its own legal expertise to users concerning the use of the service. This way, companies could have confidence in delegating their legal requirements to the platform.

Disrupting legal services

Smart contracts offer much potential as legal and business tools. The ability to transparently note the terms of an agreement and automate fulfillment could significantly streamline business processes.

More importantly, the technology can effectively take over the roles of various intermediaries in transactions leading to faster and cheaper fulfillment.

The technology surely has much potential taking over legal activities such as documentation and contract enforcement. Current and future developments in the technology also promise easier adoption and implementation for businesses.

The participation of blockchain startups and services will also help push mainstream use of smart contracts and allow more organizations especially SMEs to readily enjoy the benefits of the technology.

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Dixie Vixen's picture

I would love to hear your thoughts on the Atlanta City Bribery Scandal.

Mainstream media called it a prolific corruption scandal.

E R Mitchell Jr and Charles P Richards Jr are two highly connected contractors in Atlanta. They are buddies with several high level City officials who are in a position to select vendors in the Atlanta Hartsfield/ Jackson International Airport.

This goes from the mayor's office through the road works.Mitzi Bickers who had  held 2 different positions with the city accepted a confirmed bribe from Mitchell  with the understanding it was going to a government employee who would show his company Fannie with government contracts...

Shandarrick Barnes a known thug with ties to Bickers is found guilty of leaving dead rats on the front porch and vehicle of Mitchell. This after word got out that Mitchell was under investigation and wear fully cooperating.

Bickers gets around word is she was involved in some sort if sex scandal several years back in Mississippi politics.

Now to my point... This Bickers is also tied to two Henry county commissioners. Bruce Holmes and Dometrice Clemmons are heading up trying to turn a local battlefield eligible for registry of historic places into a petting zoo in order to run it out if business...

Clemmons appointed the adjoining land owner of this property as her director of parks and recreation.

This much we know for fact... But my theory is...

There is a multi million dollar corporation who exports grains.

They own farms and processing all over the country except in one region.

The southeast.

Resolutions have already been passed to widen the roads between the interstate and this property.

This is a working farm. And Atlanta is the major transportation hub in this country.

Heiskell Corporation has a top level executive on a some sort of committee governing the grain industry along with an Atlanta company big wig. 

The adjoining land owner also happens to have ties to a corrupt Commissioner in Lafayette GA whose name just so happens to be Bebe Heiskell.

My thought is that the farm fails to produce income. Clemmons send the land for pennies on the dollar to the land owner Swanson. Swanson then send it to the Heiskell Corporation for a huge profit, splits the spoils with Clemmons and her name is free and clear and everybody but we the people comes out smelling like roses.

Thoughts?

Glassport's picture

I guess my density is up today.  These "smart" contracts only seem to be related to financial instruments.  In my line of work, we contract to build hard assets or perform design work.  How in heaven's sake can a blockchain arbitrate management of change, force majeure, etc.?

williambanzai7's picture

Good luck with this gibberish.

LawsofPhysics's picture

Maybe, but you are going to have to hire a lawyer to find out!!!

See the problem yet?

Reaper's picture

Judges are lawyers.  Courts are their racket.

mastersnark's picture

A smart contract is just a fancy way of saying "written contract." It doesn't give the parties any special legal knowledge about the enforceability or likely legal effect of the terms in the contract.

Making a smart contract without the assistance of a lawyer is the same as making a plain written contract without an attorney. And if things go sideways, a smart contract does not magically grant either party the ability to litigate the issues.

LightBeamCowboy's picture

If my computer doesn't like what your computer is doing it will send my autonomous robot over by driverless car to pull the plug on your computer. Meanwhile, we can both stay on the beach sipping our margaritas and pondering how we all became so useless.

Irish Yoga's picture

You do realize that it is the lawyers, law makers, and other parasites that are the problem in the first place? We get along just fine without the middleman. I'm a big boy, all grown up, and can handle my affairs without scum lawyers taking a cut.

hoytmonger's picture

Jordan Peterson gave a lecture on the disappearance of lawyers, low IQ and on-line legal services...

https://www.youtube.com/watch?v=jlG_Cwxnpx0

NoDebt's picture

We'll see the end of unions before we ever see the end of lawyers.

 

Irish Yoga's picture

How about we just kill all the fucking lawyers? Case closed, your disHonor.

truthalwayswinsout's picture

Now this article is total amazing bull shit. It is nothing but bull shit.

Did you know that anyone who has tried to make smart contracts has been taken to task for the unauthorized practice of law???

Yes, the lawyers and the judiciary sue you out of business.

Did you think for one second the powers to be would allow you to invade their sole bastion of keeping the masses in line?

 

Creepy_Azz_Crackaah's picture

"Did you know that anyone who has tried to make smart contracts has been taken to task for the unauthorized practice of law???"

Not completely true.  If you represent someone else in the matter then you are participating in "unauthorized practice of law."  If you represent yourself you are pro se and it is perfectly legal.  It is even encouraged by some courts.  I've done it a fair number of times to the point of writing the memorandum of law and arguing my case in court.  The judge was happy to have an non-lawyer presenting his case to her.  I've also done a fair number of contracts on my own. All perfectly legal.  I'm a rocket scientist, not a lawyer.

StackShinyStuff's picture

I was thinking that as I was reading as well.  Bullshit.

SmittyinLA's picture

We have a corrupt judiciary, smart contracts won't work, isn't the US constitution a smart contract?

You can't sue a crooked government out of power, they won't let you.

Banana Republican's picture

Can accountants be replaced by tax reform?

A. Boaty's picture

To the extent the US Constitution functions as a contract, it binds only those who signed it and no one else.

Joe Davola's picture

We'll be eternally free and eternally young, whoooo