Blockchain is an essential technological advancement, conceptualized in the year 2008. It has brought significant positive impact among many industries, including Banking, Real Estate, Healthcare, Education, Legal sector, and more. Through this article, we’ll understand the importance of blockchain technology and how it plays a vital role in revolutionizing the legal industry.
Importance of Blockchain Technology
It is a challenging task for law enforcement authorities to keep track of historical records and maintain all the legal documents manually. Blockchain technology has great potential to disrupt the legal industry. It helps lawyers to record and manage various types of legal matters. The secure and transparent nature of this technology serves a wide range of ledger-based activities, including court records, legal opinions, UCC filings, and more.
Let’s read-on following use cases to understand the impact of blockchain technology.
The legal industry is known for maintaining paper-based documentation work. Traditional contract systems are written with physical signatures, which require a significant amount of time to accomplish legal agreements. Manually written contracts are more prone to human-errors.
Smart contracts provide a secure and efficient platform for storing and accessing legal information. Blockchain technology can make the legal documentation process more accessible and transparent, thereby leaving no space for disputes. Moreover, Smart contracts enable blockchain to create a decentralized and automated ledger to record all the contractual transactions.
Intellectual Property (IP) Laws
Intellectual Property is undoubtedly one of the challenging fields of law practice. Matters such as Patents, copyrights, licensing, trademark law, are included in IP law practices. For instance: Copyright owners hold exclusive rights, and the commercial use of any copyrighted work without the permission of the owner is considered as an infringement.
Now imagine a bulk of such intellectual property (IP) to undergo manual administrative tasks and multiple reviews, which results in a time consuming and lengthy approval process. It involves the hassle of registering new IP, transfer ownership, and update filings.
Blockchain technology drives efficient operations and enhanced collaboration by reducing the time spent on administrative tasks and maintaining IP records accuracy. It also helps to streamline the anticipated process for searching the intellectual property.
Chain of Custody
In the legal industry, it is pervasive that the duration of many cases lasts for many years. And for this, the ability to validate evidence and proper documentation is very crucial. During the investigation process, the evidence which was found in the initial stage of a case may come out to be essential in later stages. So, if the chain of custody is documented accurately and regularly, it becomes easier for the legal authorities to locate vital information. Chain of custody contains paper-based documentation that involves human intervention and is vulnerable to human errors. Moreover, maintaining a large scale of literature can become a very cumbersome practice.
Blockchain technology provides a platform to transform the chain of custody procedures and helps legal authorities to make quick decisions. A crime evidence collector collects the pieces of evidence and uploads the related information to the blockchain network. This information gets distributed across every node, thereby removing the possibility of a single point of failure. Blockchain possesses immutable and auditable characteristics that protect historical records from the threat of modification from anyone. Hence, it helps law enforcement authorities to access real-time files of the information from anywhere, at any time.
Property management includes buying, selling, and renting real estate properties. The process involves signing a legal document for the ownership of the property or legal rights. As this field regards deeds, it contains tons of paper-work, ledgers, and more, and it has a relatively low rate of technological adoption. But the rise of Blockchain technology addresses such challenges by developing a system that can store data much more efficient and is lesser prone to tampering. It also helps to keep track of all the deed transfers to simplify the process for conveyances and liens. Automatic alert notifications from the system can even notify the registered property owner with events related to their property.
Notary services are essential for businesses, mortgages, and other payment settlement purposes. It provides two primary functions – authenticating document and signature certification via witness. Blockchain technology offers a unique digital identifier of independent timestamps for authenticating documents. The private and public keys identify the valid owner of the report.
Benefits Of Adopting Blockchain In The Legal Industry
- More Accessible: Legal Authorities can leverage blockchain technology to simplify and streamline their transactions and immutably store all the legal documents. It reduces a significant amount of time spent in preparing and maintain law documents by using smart contracts and automated contract management systems.
- Higher Transparency: Blockchain uses Distributed ledger technology (DLT), which records the transactions of assets digitally, making it accessible to all the parties. Hence, it makes the legal industry more transparent, leaving no space for misinterpretation.
- Cost-Effective: Blockchain technology offers an automated system that has replaced numerous manual tasks. It significantly reduces the time spent in drafting and amending legal documents. The introduction of smart contracts has reduced the cost of transactions between the parties. Moreover, the decrease in overall expenses increases the overall accessibility and demand for legal services.
As blockchain technology is maturing, legal professionals will continue to explore how more complex transactions can be moved to this technology. Adoption of Blockchain technology in the legal industry is the need of an hour. There are a lot of legal software options available with different features, and it is very imperative to choose the right software for legal document management based on your organizational needs.