Blockchain For Lawyers: Development And Use Cases

Blockchain technology (known for its ability to store information and data in a transparent and immutable ledger), many industries are adopting this decentralized technology as it offers businesses a high level of precision. 

Legal industries are not far behind and are looking for a way to revolutionize their operations by leveraging blockchain technology. 

Blockchain helps lawyers maintain an accurate chain of custody and other legitimate activities by enabling them to store and validate records of transactions. From property records to court records, funds transfer to contracts, there can be a wide range of ledger-based activities in the legal industry.

Explore the use cases, development steps, and the required tech stack to understand how you can leverage blockchain technology to transform your legal practice in an enhanced and efficient way.

Use-Cases Of Blockchain In The Legal Industry

Blockchain technology can improve various aspects of the legal industry by enhancing security, transparency, and efficiency. The use cases of blockchain in the legal sector are as follows: 

1. Smart Contracts

A self-executing computer program providing transparency, immutability, and efficiency in the legal framework.

As more industries integrate smart contracts into their operations, lawyers should educate themselves on the workings and risks of these blockchain-based contracts. Also, lawyers must learn how to combine smart and traditional contracts in a legally binding document.

A law firm may automate, or even eliminate, the escrow process by deploying a blockchain contract that transfers funds to the appropriate parties once the obligations under the agreement are performed. If one side fails to perform, the smart contract could return funds to the other party.

Also, smart contracts and blockchain technology allow firms to record data securely, such as client information, case files, and transaction histories. 

Moreover, smart contracts strengthen the protection of sensitive client information by keeping these records in a transparent, immutable, and secure manner.

2. Intellectual Property 

Blockchain helps law firms establish the authenticity of ownership rights, combat counterfeiting, license property through smart contracts, and efficiently register trademarks by creating unalterable data.

The decentralized technology can serve as an intellectual property registry that provides users with secure digital certificates, verifying the nature of work and the origination time. 

By registering newly created intellectual property, such as a work of art, a piece of music, or a design, on a blockchain-based registry, an owner can establish permanent ownership of the work’s copyright.

Moreover, it would be easier to register new intellectual property, update filings, and securely transfer ownership at any time by replacing traditional centralized registration systems with decentralized systems.

3. Proof Of Service  

Blockchain technology provides lawyers, courts, and other parties access to verifiable, tamper-proof information about proof of service. 

The record may often include records of images of the papers served and the way they were delivered by offering them a unique blockchain ID, which can accessed by anyone with access to the blockchain platform. 

Traditional proof of service methods can be time-consuming, costly, and prone to disputes where there is a requirement for a more secure and verifiable method to track the delivery and receipt of legal documents.

Implementing a blockchain-based proof of service system to record can simplify the service verification of legal documents by bringing transparency, security, efficiency, cost savings, and global reach to the legal system.

4. Corporate Filings 

Blockchain technology can greatly improve the corporate filing process by increasing transparency, security, and efficiency on blockchain platforms. 

The decentralized record makes it possible to have every corporate document and transaction recorded for having an immutable record of all corporate acts.

Governments may even facilitate blockchain platforms for companies to submit corporate documents and registrations, enabling businesses to have a permanent, immutable, and transparent record of any changes. 

However, to advise clients on the logistics, benefits, and risks of corporate record-keeping through blockchain, corporate lawyers may need to learn about blockchain technology 

5. Litigation And Settlement  

By leveraging blockchain technology, law firms can streamline and enhance various aspects of litigation and settlement processes in the legal industry. 

Litigation is resolving disputes or legal conflicts by following procedures such as plaintiff and defendant, court proceedings, and Resolution. 

On the other side, settlement is the resolution of a legal dispute outside of the courtroom, where the parties involved negotiate an agreement, typically with the assistance of lawyers or mediators. 

However, traditional litigation and settlement processes are often lengthy, costly, and subject to disputes in the legal industry. Implementing a blockchain-based system for managing litigation and automating settlement processes can increase transparency, security, and efficiency.

To ensure successful adoption and compliance with existing legal frameworks, it is essential to have a successful collaboration between legal experts, regulators, and technology specialists. 

6. Chain of Custody

Chain of custody details the collection, transportation, storage, and handling of electronic evidence. However, storing electronic evidence in the centralized database raises security concerns. 

This can be tackled by enabling time-stamped cryptographic records by bringing traceability to the system with blockchain technology, as it will be easier to locate vital information for the legal authorities with a decentralized chain of custody.

7. Blockchain-Based Arbitration  

Arbitration is a popular method for businesses to resolve disputes by allowing parties to select expert adjudicators in their field to specify the rules, arbitrators, and procedures for dispute resolution.

With the help of smart contracts, many aspects of the arbitration process, such as documentary evidence, transmittal of correspondence, and satisfaction of awards, could be automated. 

Arbitration proceedings can be conducted using a blockchain-based platform that provides transparency to all parties involved. Each action and communication can be recorded on the blockchain. Tracking the progress of the arbitration in real-time using a blockchain-based platform is easier, as it provides transparency to all parties involved. 

However, arbitration should be implemented carefully by considering legal and regulatory factors and the specific needs of the parties involved in the arbitration process.

8. Accepting Legal Fees In Cryptocurrency  

Some law firms are already accepting payment in cryptocurrency. However, cryptocurrencies can store value and are more like valuable forms of property like stock certificates, gold, art, and other assets. 

Therefore, legal firms should consider cryptocurrency as valuable assets rather than money, as it cannot be stored at an ordinary bank. 

It is necessary to obtain a wallet for the cryptocurrencies you plan to accept, such as Bitcoin or Ethereum, for processing cryptocurrency transactions within your law firm. Also, consider utilizing cryptocurrency exchange to convert any received cryptocurrencies into fiat, enabling you to convert your assets into traditional currency. 

Crypto conversion into fiat will enable you to deposit the funds into your business account for the payments you receive in crypto.

Examples Of Blockchain-Based Businesses In The Legal Industry

There are many emerging businesses and startups committed to delivering exceptional blockchain services in the legal industry. Here is a list of companies offering legal solutions in the blockchain/crypto space.

1. WordProof & Trusted Web

A Netherlands-based company that uses blockchain technology to protect copyrights and enables creator to timestamp their post on WordPress. This serves as proof that the creator owns their content on WordPress.

The company also provides a “Time Machine” functionality, enabling users to see a complete history of all modifications and changes that occurred to specific pieces of content.

Started in	2018
Founded By	Sebastiaan van der Lans
Headquarters	Netherlands, Amsterdam
Industries	Identity & Reputation, Supply Chain & Logistics, HealthTech, Legal

2. BrainBase

Based in Los Angeles, BrainBase offers a licensing management tool for enabling companies to bring licensed products. 

This allows their companies to market faster with powerful collaboration tools, sales and royalty reporting tools, smart contract management, and secure digital asset management.

Also, companies can track essential metrics like sales performance and rights availability with tools provided by BrainBase.

Started in	2016
Founded By	Nate Cavanaugh
Headquarters	United States, Los Angeles
Industries	Legal, Artificial Intelligence & Machine Learning

3. Legal Nodes

An online platform that helps early-stage tech startups resolve their legal challenges by making the legal process a lot more affordable, simpler, and efficient. 

The company provides “Legal Manager”, who is an expert from a global network of tech-savvy lawyers for startups to work on their legal tasks. 

Started in	2018
Founded By	Margarita Sivakova, Max Maliuk, Nestor Dubnevych
Headquarters	United Kingdom, London
Industries	Legal

4. DLA Piper Group

A global blockchain group, offering strategic regulatory and transactional guidance to companies coming from a diverse range of industries.

With the collective experience of lawyers from corporate, securities, tax, IP, regulatory, and other practices, DLA Piper Group helps businesses navigate and simplify their legal landscape.

The company also offers strategic advice to address business needs and implement blockchain technology solutions. 

Started in	2005
Founded By	Thomas Townend Dibb
Headquarters	New York, US
Industries	Consulting & Advisory, Legal

5. Agrello Foundation

Agrello is a blockchain development startup that focuses on creating digital identity and smart contract solutions for businesses across various industries.

The company was founded by a team of Estonian lawyers with the aim of creating digital contracts that will transform the way people interact and interface with legal authorities. 

Agrello offers various blockchain-based solutions to businesses such as smart contract creation, digital identity verification, legal document automation, etc. The company also aims to revolutionize the legal industry by providing tools and technologies to enhance transparency, security, and efficiency in legal processes.

Started in	2017
Founded By	Teddi Rull
Headquarters	Tallinn, Estonia
Industries	Legal Contract Management on Blockchains

How To Start Blockchain Development In The Legal Industry?

From contract management to evidence preservation and identity verification to payments, blockchain technology can revolutionize various aspects of the legal industry. 

If you’re a lawyer seeking to develop blockchain solutions for the legal sector, here are the steps to get started:

1. Identify Use Cases

Figure out the specific aspects and use cases for your law business that could benefit from blockchain technology. Common use cases of blockchain in law may include smart contracts, digital identity, document verification, intellectual property protection, and notary services.

Also, you can define the requirements for your blockchain solution, like what problem you are trying to solve and what features and functionalities are necessary. Based on your business needs & legal requirements, you can identify potential use cases of blockchain in the legal industry. 

Also, it is recommended to work with experienced blockchain developers who specialize in the legal industry from the very beginning stage of your blockchain development journey to simplify the overall development process. 

Here is more information about how to hire blockchain developers in 2023.

2. Choose A Blockchain Platform.

Select a blockchain platform that suits your needs. Ethereum, Hyperledger Fabric, and Binance Smart Chain are popular options. Consider various business factors for law firms like scalability, privacy features, and development tools to select the Appropriate blockchain platform that suits your needs. 

Binance Smart Chain, Ethereum, and Hyperledger Fabric are some of the ideal options you can choose for blockchain development.

3. Design The Legal Solution

Determine how you will utilize blockchain development to revolutionize legal operations, such as how data will be stored, how smart contracts will be written, how users will interact with your system, etc. 

After determining the specific blockchain development purpose, you can work with blockchain developers to develop and implement the appropriate solution for your legal firm.

4. Develop Smart Contracts

If your use case involves smart contracts, develop them using the appropriate programming language (e.g., Solidity for Ethereum). Ensure that the code is secure, and conduct thorough testing.

Smart contracts are a crucial aspect of the legal industry as they facilitate various legal operations between lawyers and their clients. Consider using popular programming languages such as Solidity for smart contract development.

5. Improve Security And Perform Testing

Implement robust security measures like access control to protect sensitive legal data and encryption to ensure security and privacy for your legal firm and clients. 

Also, for identifying and resolving any vulnerabilities or bugs, you can consider testing smart contracts, transactions, and the overall system for reliability and security in your legal firm.

Moreover, you can consider conducting a pilot test with a small group of users to validate the effectiveness and usability of your blockchain-based legal solution.

6. Add Compliance and Legal Framework

As your firm will handle sensitive legal information, ensure that your blockchain solution complies with relevant legal and regularity requirements.

You can consider complying with your platform with KYC and anti-money laundering by implementing robust identity verification and due diligence processes. Also, you can involve legal experts familiar with blockchain to ensure your solution complies with legal standards and regulations.

7. Do System Maintenance and Monitoring 

To ensure the blockchain solution remains secure and aligned with changing business needs, consider continuously maintaining and updating the blockchain solution.

Also, implement monitoring tools to track the performance of your blockchain application and make data-driven improvements by gathering analytics with appropriate tools.

Tech Stack To Start Blockchain Development In Law

To ensure that the system is secure, efficient, and able to meet the specific needs of legal professionals, there is a requirement for the selection of an appropriate tech stack.

The recommended tech stack for the efficient implementation of blockchain technology in the legal field is as follows:

1. Blockchain Platform

• Ethereum
• Solana

2. Smart Contract Development

• Solidity
• Vyper

3. Identity Verification

• Sovrin 
• uPort 

4. Decentralized Storage

• IPFS (InterPlanetary File System) 
• Filecoin

5. Blockchain Development Frameworks

• Truffle 
• Hardhat 

6. Blockchain Explorer

• Etherscan 
• Blockdaemon
• Anyblock

7. Consensus Mechanism

• Proof-of-work (PoW) 
• Proof-of-stake (PoS) 

8. Blockchain Wallets

• MetaMask 
• Ledger   
• Trezor

9. Blockchain Platforms

• Ethereum 
• Hyperledger Fabric 
• Binance Smart Chain 

10. Smart Contract Development 

• Solidity 
• Chaincode (Go) 

11. Development Tools and Frameworks 

• Truffle 
• Remix 
• Hyperledger Composer 

12. Web3 Libraries

• Web3.js  
• Ethers.js 

13. Identity Management

• uPort 
• Cryptowatch

14. Consensus Mechanisms

• Proof of Work
• Proof of Stake
• Byzantine Fault Tolerance 

15. Security Auditing Tools

• Mythril 
• Truffle Security 

16. DevOps and Deployment

• Docker 
• Kubernetes 

17. Testing Frameworks

• Mocha 
• Chai 
• Jest  

18. Frontend Frameworks

• React,
• Angular  
• Vue.js  

19. Cloud Services

• AWS
• Azure 
• Google Cloud 

Conclusion

Blockchain can revolutionize the legal industry by increasing efficiency, transparency, and security and offer benefits in terms of document management, automation, and record-keeping. This makes blockchain a promising tool for lawyers seeking to serve their clients better and resolve complex legal landscapes. 

However, regulatory hurdles, scalability issues, and education and training among legal professionals are some challenges to overcome. 

By working with a team of blockchain development experts experienced in the legal industry, these challenges are likely to be addressed. The development team can help you identify and develop appropriate blockchain solutions for your legal business.

You can contact our team if you are looking for a trusted partner in blockchain development for the legal sector. With our cutting-edge blockchain solutions, we are committed to enhancing and transforming the way you deliver legal services.

We’ll work closely with your team to provide a competitive edge in the legal market by identifying and developing the ideal blockchain solutions that align with your business goals.

Schedule a consultation call to discover how blockchain technology can transform your legal practice by working with our team of blockchain development experts.

FAQ

Q. What does a blockchain lawyer do?

A. A blockchain lawyer specializes in blockchain technology-related legal matters and provides legal guidance, and advice to businesses, organizations & individuals operating in the blockchain and cryptocurrency space.

Q. What is the legal use case of blockchain?

A. Smart contracts, chain of custody, corporate filings, proof of service, intellectual property litigation and settlement, and blockchain-based arbitration are some of the legal use cases of blockchain.

Q. What are the benefits of blockchain in the legal sector?

A. There are various benefits of blockchain in the legal industry, such as electronic signatures, intellectual property, property rights, chain of custody, tokenization, etc.