A coalition of legal professionals, academics, technologists, and business executives has established the Blockchain + Legal Industry Group to enhance awareness and understanding of the legal and regulatory complexities surrounding blockchain technology. The group marked its public launch by releasing the first in a planned series of white papers designed to disseminate its knowledge and insights.
Formation and Mission
The group’s formation was spearheaded approximately a year ago by Epiq, a global provider of technology enabled legal services. Founding members include representatives from notable organizations such as Ava Labs, Coinbase, Cornell Law School, Cravath Swaine & Moore LLP, Grant Thornton LLP, IBM, Icertis, Norton Rose Fulbright, and Pitney Bowes.
Roger Pilc, president and general manager of Global Legal Solutions at Epiq, explained the foundational rationale. Pilc noted that when new technology emerges, Epiq collaborates with corporate legal departments to ensure implementation adheres to legal requirements, including discovery, preservation, and information governance. As blockchain adoption increased, Epiq sought to help corporate counsel, law firms, and other stakeholders fully grasp the legal implications, following a pattern established with previous emerging technologies.
Pilc observed that the group quickly expanded as law firms joined, driven by client inquiries regarding cryptocurrency and blockchain. Technology companies followed suit as their customers sought clarification on legal and regulatory matters.
The group is now engaging publicly to broaden the reach of its educational initiatives on blockchain and cryptocurrencies, and to diversify its membership for a greater depth of experience and perspective. Pilc emphasized the collaborative nature of the initiative, stating that the generated knowledge is not proprietary. The goal is to create a useful body of knowledge for members serving clients and for corporations or legal departments seeking to understand the regulatory and compliance issues, which their boards will inevitably inquire about during technology implementation.
While the initial focus was on helping corporate legal departments manage and mitigate risks associated with the technology (playing defense), the group has since expanded its scope. It now also explores how corporate legal and compliance departments can leverage blockchain to improve operations and transform how they fulfill their duties. Pilc cited examples of legal and compliance departments utilizing blockchain to implement regulatory compliance requirements within their supply chains.
First Publication and Future Plans
The white paper released this week, titled Blockchain and Mitigating Corporate Risk, represents a significant portion of the group’s initial work product. Authored by Alison Wisniewski, chief legal officer at Epiq, it addresses issues of governance, data privacy, and e discovery as they relate to blockchain within corporate legal departments. The paper incorporates input and review from all group members.
Wisniewski specifically addressed the implications of blockchain for e discovery. She highlighted numerous unanswered questions that require attention, such as: “How do you collect from a blockchain? How do you have experts around what’s in the blockchain? From a data privacy perspective, what data goes into the blocks?”
The group intends to publish a continuous series of white papers to share its collective knowledge on legal and regulatory issues related to blockchain. Additionally, it plans to host a series of forums to discuss critical topics, featuring speakers from both within and outside the membership. The inaugural forum is scheduled to focus on smart contracts, examining their nature, function, and necessity.
Diana Dowling, innovation and strategy consultant at Epiq and organizer of the forums, said the aim is to provide practical, real world knowledge on how to approach these challenges.
Focus on Education Over Standardization
In 2017, the now disbanded Global Legal Blockchain Consortium was formed with one of its goals being to drive standardization for blockchain within the legal industry. However, establishing standards is not the focus of this new group.
Wisniewski clarified that the current group was formed to analyze blockchain, identify potential risks, explore future uses, and act as an advisory resource to the market. She noted: “The purpose wasn’t really to sit back and develop certain rules and regulations around that, because I think it’s still ever changing.” Wisniewski believes that prioritizing knowledge sharing over rule setting will contribute to the group’s longevity and success. “It’s more, ‘This is what we’ve seen, and this is the advice that we’re giving, because this is our experience.'”
Broadening Membership
With the public launch and release of the first white paper, the group is actively welcoming applications from new members. Pilc hopes to further build on the 360 degree perspective the group currently holds. The diverse composition of the group—including technology vendors, service providers, law firm professionals, and financial advisors—offers a comprehensive view necessary to navigate these unchartered waters before formal standards and operating procedures emerge. Dowling emphasized the invaluable nature of this diversity: “One of the key elements of the group that’s emerged is the fact that everybody comes with a different point of view and a different perspective.” Continuing to expand this landscape, across different industry verticals and perspectives, remains a primary objective.
Stephen Aschettino, who leads the US fintech practice at Norton Rose Fulbright and is a recent addition to the group, believes part of the mission is to help legal professionals understand how blockchain applies to their specific practices. While blockchain is not new chronologically, Aschettino stated, “I think we are in the early stages, though, in terms of educating lawyers and legal departments on its potential uses.” Many professionals are distracted by the crypto world or specific use cases and fail to see the personal applicability.
Aschettino also anticipates the group’s work will involve identifying and addressing the potential risks of the technology. This process will entail “helping to identify what those risks are, developing a solution to them, and then educating to take away whatever hesitation there may be to actually employ blockchain technology.”
Reaching a Tipping Point
While an earlier prediction in 2017 that blockchain would drive the next wave of legal innovation did not materialize, Pilc believes the industry has now reached a tipping point regarding blockchain in the legal sphere. He stated, “It feels that the degree of adoption in the last 12 months has perhaps hit that tipping point where it’s kind of the exact moment in time to be addressing these legal and compliance and regulatory issues.”
Aschettino similarly suggested that wider adoption is imminent. Successful test cases will expose the viability of blockchain solutions and demonstrate how law firms can partner with clients to promote efficiency and better client service. Aschettino stressed the seriousness of this current effort, distinguishing it from prior hype. “I think that right now we’re bringing together a group of very serious educated stakeholders to really help the industry as a whole move forward,” he said. This means focusing on the practical challenges and regulatory struggles that may have held back innovation, performing thoughtful analysis, making recommendations, and potentially engaging in pilot projects.
