Crypto use beyond speculation
As Scott Chamberlain previously wrote, Blockchain has the potential to profoundly change how we interact with one another. Its impact wouldn’t merely be generational, but civilizational.
“Think of eBay (fair and consistent terms and conditions, rapid and costless dispute resolution, and insurance against fraud), but without eBay in the middle. Now apply that to… almost anything…”
Naturally, as with anything else in life, the Blockchain movement isn’t without skeptics:
“Another new kid on the block is Blockchain. It will continue to be mentioned in passing at legal technology conferences in 2018 but again clarity on what your average lawyer will be able to do with it will be scant...”
While the above isn’t untrue, I feel it misses the mark a bit. After all, it isn’t merely about what an average lawyer will be able to do with Blockchain.
Rather, we have to understand how the Distributed Ledger Technology, underpinned by Digital Assets, will transform the way business is being done (or how individuals share value).
The transformation will certainly impact legal professionals as well - in ways we still have to understand.
After all, the legal industry exists solely to help facilitate commerce and interpersonal relations.
XRP Ledger transactions visualized in November 2018 by Thomas Silkjaer
Can lawyers use Digital Assets in their business?
They certainly can. In fact, they already do.
As reported by John Grimley, law firms around the world started to accept cryptocurrency as a means of payment (more details below). However, this is not THE use case you should be excited about.
In addition to accepting digital assets for legal fees, you may...
Monetize your Legal Knowledge Products
Imagine if you could package your legal knowledge into digital products? And then sell it online under the “pay as you use” billing model.
This is EXACTLY what Coil helps its users and content creators do.
Subscribers to the Coil platform have access to premium content. In turn, content creators receive micropayments in real-time - for every second Coil Members enjoy their content.
This is the concept of “streaming value”. Today, you CAN stream value the same way you are streaming music or movies.
And while platforms like Coil are still nascent (and none explicitly tailored to the law industry per se), it is not hard to imagine specialized legal niche monetization tools sprouting in the near future.
Charge clients as you deliver legal service
Picture the following:
You start your workday, open up your laptop, and start editing transaction documents for your client.
You are using a Coil-like ILP enabled platform, which has inbuilt document editing and management modules. At the same time, the platform has a value escrowing function and is able to release funds upon meeting certain pre-set conditions.
The value itself may be delivered in a form of Digital Assets (e.g. XRP, ETH, or BTC - to name some). Alternatively (if you can’t stomach the volatility), you may choose to receive EUR, USD (or other) IOUs, that are issued on the underlying distributed ledger technology.
While you edit the document, the platform streams you value (in EUR for example).
If you agreed to bill your client by the hour, your compensation is streamed directly from the client’s escrowed funds to your e-wallet as you work. That is you would receive micropayments every second or so.
If you agreed to some other form of payment (e.g. fixed fee payments upon certain milestones), the principle is the same. The platform would recognize that a condition was met, and your funds would be released programmatically.
Above are just one out of many possibilities. Use-cases aren’t limited to traditional legal billing tools. It is both tempting and challenging to picture what we will be able to accomplish once Blockchain gets wider implementation.
Create your own jurisdiction on Blockchain
And just as yesterday (as of this article publication) TechCrunch reported about Aragon Project aiming to create digital courts.
“Aragon provides the framework and tools needed to create decentralized autonomous organizations (DAOs), ranging from structures created for thousands of users to simple ones designed for just a handful of people…”
Impressive. In the not so distant future, you will be able to execute fully automated M&A transactions - complete with Due Diligence - by simply handing over your private keys.
“Aragon, founded by entrepreneurs Luis Cuende and Jorge Izquierdo, aims to create what they call the world’s first “digital jurisdiction,” providing tools for the management of digital organizations, as well as an online dispute resolution service.
It’s so-called “court system” can handle subjective disputes that require the judgment of human jurors…”
How lawyers use digital assets today
As the crypto and blockchain industry mature, the regulatory framework gets set up one step at the time. In parallel, law firms grow more open to accepting cryptocurrency in exchange for legal services.
Take note of the following examples:
US (inter)national law firms
“More large law firms are accepting bitcoin payments for their legal services, signaling the digital currency’s firmer foothold in corporate America...” - Sara Merken
Merken detailed how Steptoe & Johnson LLP, Frost Brown Todd LLC, and McLaughlin & Stern LLP have begun accepting digital assets in order “to meet the demand of clients that deal with cryptocurrency assets…”
Merken also reported that being open to digital assets helps said firms attract new clients.
Law Firms in Switzerland and PwC Luxembourg
As Switzerland gets positioned as a global hub for digital asset regulation, local law firms get warmed up to cryptocurrency. Baer & Karrer and Froriep are some of such law firms.
Furthermore, PwC (a Big4 accounting firm which also renders legal services) Luxembourg accepts Bitcoin.
Law Firms and Big4 in Asia
Some law firms and Big4 accounting firms are now accepting virtual currency in Asia. Namely, US law Steptoe & Johnson LLP (noted above), which operates a Beijing office, accepts digital assets. PwC Hong Kong also accepts payments in bitcoin.
Piper Alderman in Australia
As the law firm details on its’ website: “We are proud to be the first major Australian law firm to accept bitcoin payments for legal services and from October 2019 have expanded to cover other major cryptocurrencies”.
In July 2019, Malaysian law firm MahWengKwai & Associates detailed in an article on its’ website that it is “now accepting payment for legal services [in] virtual currency”. “To the best of our knowledge”, the firm explained, “we are the first law firm in Malaysia to have implemented a virtual currency payment system for clients to make payment for legal fees”.
The firm’s Managing Partner Raymond Mah explained: “We have asked our clients to partner with us to protect and grow their businesses. For clients growing rapidly in the fintech industry, it is important that we have a real understanding of their goals, challenges, and technology. We have come to believe in the underlying blockchain technology and supporting the industry.”
The firm also explained how it “has partnered with Coinify – a Copenhagen-based cryptocurrency exchange and payments provider – to power our virtual currency payment system. The Coinify platform allows us to securely accept established virtual currencies including, but not limited to, Bitcoin, Ethereum, Litecoin, and XRP”.
Photo by Muzammil Soorma on Unsplash
Digital Assets give rise to new business models
While Crypto markets are still volatile, one can’t ignore all new business models that Distributed Ledger Technology will enable.
Accepting crypto payments is perhaps the first step in understanding how Blockchain can help you monetize your legal knowledge, packaged as products.
It is very likely that legal tech tools of tomorrow won’t resemble those we know and use today. Not even close.
John Grimley is Editor & Publisher of AsiaLawPortal.com and an advisor to law firm management teams around the world on best practices in international business development.
He’s a licensed attorney in the District of Columbia and holds a Juris Doctor from the University of San Diego School of Law. Between 2002 and 2008 he established and directed an EU focused business development initiative of US AmLaw 100 law firm Patton Boggs LLP.
John's views on law firm management issues have been published by The Lawyer, Law360, Bloomberg Law and Beaton Capital.
Ivan Rasic holds the Transnational Trade Law and Finance LLM, a program by Universidad de Deusto (Bilbao, ES), Universiteit van Tilburg (Tilburg, NL), and Goethe Universität (Frankfurt, DE). After his work in law firms and inhouse, he started a legal tech company.
Nowadays, Ivan leads STP Informationstechnologie AG's Sofia RnD center with project/development management, culture, strategy, and special project initiatives.
Ivan is an Ambassador at European Legal Tech Association (ELTA). He closely follows and writes on future of law, legal tech, ALSPs, and new ways of delivering legal services.