Blockchain is spreading its wings, as the distributed ledger technology gains traction beyond early iterations in the cryptocurrency realm. In recent months, more industries have begun to build solutions that use the technology’s foundational elements to improve data integrity and security; Blockchain is moving beyond financial transactions to ensure trust in documents, identity and other digital assets.
The legal industry is a good example. There are many in the industry who believe that Blockchain represents a big opportunity for law. This was the thinking behind Integra Ledger, a standardized, Blockchain-based foundational utility that will improve the security, integrity and interoperability of legal software and stakeholders (e.g. digital signatures, contracts, clauses or firms and their clients) in the global legal industry. Integra is based on Hyperledger Fabric, an open source Blockchain originally developed by IBM and donated to Hyperledger, which is part of the Linux Foundation.
Because identities on Blockchain and related technologies are immutable, it provides “a ground of truth” says Aileen A. Schultz, director of Network Intelligence for Integra. “Right now, the industry is facing issues around version control and encryption. Blockchain will get rid of many of those.”
“Blockchain is such a beautiful technology for this industry because it can provide a new foundation for security and integrity using distributed technology, allowing secure, private and enduring access to information,” said Amy Ter Haar, president of Integra Canada. “As an immutable ledger, it can facilitate a whole range of complex operations, from mergers and acquisitions and litigation, to deed management and identification certification, while saving costs and reducing complexity.”
In a recent interview with Legal Technology Now, David Fisher, CEO of Integra Ledger, explained how Blockchain can potentially benefit industry partners. “We can see how Blockchain enables an underpinning of integrity and trust in the legal realm.” In a Blockchain world you get rid of the dependencies on intermediaries. Anything that has a digital representation can have a Blockchain-based identity, thereby creating a ‘society of trust’. If everything can be uniquely confirmed and identified, document management processes can become more resilient to threats on their integrity from software or other third-parties.
A unique characteristic of the Integra Ledger is that it is not an application layer; rather it’s a backbone, ter Haar stressed. “We do not do app development. It’s the applications built on the Integra backbone that will really showcase what is possible with Blockchain in law. Part of what we are doing is creating APIs that can be easily integrated into existing back end systems – much like a salesforce.com model. It will make for easy plug-ins for functional matters that require trust in the software.”
Many law firms are not that familiar with Blockchain, however, or its benefits to the legal community, she added. “While many have heard of it, there is still need for industry wide understanding of how it can be applied in a legal context, and a deeper understanding of the benefits and efficiencies that can be gained.”
An important stepping stone in achieving Blockchain acceptance throughout the community is the establishment of standards, she added. “There has to be a governance structure to support the integrity of a system like this. We also need to build a community that is necessary for adoption.”
To that end, Integra is a key member of the newly formed Global Legal Blockchain Consortium which is aligning a wide range of stakeholders, from technology leaders to educational institutions to legal firms. Founding members in the GLBC include IBM Watson Legal, Baker Hostetler and Orrick.
“One of the barriers to Blockchain use in legal is that there has not been any standardization to date or any regulatory body around it,” said Schultz. “The industry needs to establish a direction, and then work collectively to manifest it”.
Blockchain in law is now at the cusp of wider adoption, Schultz noted. “Really, just within the last couple of years, have firms truly began talking about these things and seeking solutions. The next wave is actual adoption and app development, as well as onboarding and integration. As this is done systematically and at large across the industry, the magnitude of value will really start to show”.
In terms of how Blockchain will transform the industry, it will be subtle, Schultz explained. “It’s an answer to an infrastructural gap, not a replacement for a tool or app already being used.”
This means among other advantages, that adoption can happen in stages – starting, for example, with contracts, Schultz said. “But before anything happens, you need organizational-wide acceptance.”
“This will become as ubiquitous as the Internet,” ter Haar said. “There are several proof of concepts already in existence, and law firms are interested in learning more. Blockchain is on pace to transform the industry. This is all happening now and in a very real way.”