Blockchain: A Boon for Companies Focused on Legal Projects

Blockchain :

A Boon for Companies Focused on Legal Projects
By Dr Prakash Sharma, Technology Evangelist

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Most legal professionals prefer to have an absolute secrecy maintained with reference to their cases and ensure the documentation is preserved and stored in lockers with restricted access to the same. However, once a case is documented, registered in any jurisdiction, few or all its content is also publicly available depending on various approvals of the plaintiff and defendant teams.

Can Blockchain secure the documents as well as seamlessly integrate with an approval system?

Let us understand what exactly is a Blockchain.
Blockchain is a database system which stores encrypted chunk of data blocks and then chains it in a chronological way to get the full truth of the data. The data is distributed across the system rather than creating multiple copies of a singular piece of information. This becomes the most foolproof way to manage legal documents. For the technical resources, imagine it is a way to have a pointer reference connector connecting timestamped blocks.

Blockchain Features

The benefits are accessibility, integrity, transparency and most importantly reduction of cycle time of documentation. As per the CLIO survey reports, over 80% of the global law firms want to improve the organization efficiency by using any relevant technology to reduce cycle time of operations. It could be a mix of Robotic Process Automation, Artificial intelligence, or Blockchain to centrally manage transaction ledgers. Updating client trust ledgers take significant time and Blockchain technologies provides a solution for the same. There are multiple hackers who wait for an opportunity to get confidential data and the decentralized and distributed ledger is a way forward for legal firms to embrace Blockchain technology. Blockchain provides authenticated electronic signature system using Ethereum which reduces the manual paperwork and ensures a legal digital signature mechanism which is legally valid in a court of law as per the Indian IT Act, 2000. Blockchain ensures using hash and cryptography technology effectively for digital signatures.

Some of the use cases where Blockchain is effectively being used are as follows:

  • Contract Management
  • Dispute Management
  • Property Documentation Management
  • Document Notarizations
  • Intellectual Property Rights
  • Chain of Custody

image The Government of India is making all attempts to embrace Blockchain. Refer figure 2 which demonstrates a way forward for helping organizations evaluate the need to implement Blockchain solutions within the organization.

To summarize, Blockchain can address the secured document management needs of legal organizations. By using artificial intelligence, the content can be effectively analyzed using NLP to deduce meaningful information of the case. The intelligence lies in effective tagging to get more context of the documents and artificial intelligence can be used for such requirements.

There is a felt need by global legal companies to embrace Blockchain technology and as mentioned in Disrupter daily, it is being used in multiple use cases. From the Indian context, SEBI regulates the Blockchain policies for capital market, RBI for crypto currency transactions and IRDAI for Insurance relevant transactions. Blockchain usage is yet to mature in India.


image 10 Ways Blockchain Will Transform Legal Service & Regulation

Many countries have already adapted Blockchain for legal processes. Surveys indicate that over 50% of legal firms would leverage Blockchain for smart contracts and transactional legal services as human errors can get reduced because Blockchain uses its own protocol codes.

Many legal firms in India still use excel and word document-based approach to record data and documentation management is restricted to maintaining folders in a lawyer’s desktop or a laptop. The consequences to loss of data are huge and hence there is a felt need for organizations to embrace technologies like Blockchain coupled with workflow automation to improve efficiencies.

Workflow automations can be used for strengthening the approval system and improving the notification mechanism. In the USA, law firms were hiring legal assistants for manually notifying their clients on various aspects of legal requirements. All of this has been replaced by using automation. Blockchain is a way forward to organize and maintain documentation and cryptography helps in providing secured restricted access to the legal documents. Blockchain technology enforces contracts without the need of any intermediary, can verify transactions, or perform background checks. It creates a digital trail of transactions which is most vital for legal firms as everything is governed by objective evidence and hence surely is a boon to legal firms.