Are you ready for the Metaverse? Probably not, but please bear with me, because the legal implications will be enormous. Open your creative mind first, and at the very end apply your critical thinking legal intellect. Here we go.
Imagine, if you will, a world resembling our physical one, but a completely virtual, immersive, colorful, all-encompassing one with land, rivers, houses, farms, people, animals, full cities, stores, businesses, concerts, and everything else contained in our physical world. Sauntering down a bustling city street, minus the smells, is as easy as walking on a moon that orbits an earthlike place. Platforms with full replication of our physical world are being built through a wearable device to create this Metaverse. Why? That seems a tad ridiculous.
Yet, before the iPhone was launched 14 years ago, we didn’t imagine the myriad of things we could accomplish by simply touching a piece of glass-faced, hand-held technology today. It would have been a leap of faith to see where we sit now. Thus, the Metaverse is that next leap.
Over the next 18 months, following an era of Zoom and Teams virtual meetings on laptops and mobile devices, Apple will be releasing the first mixed or virtual reality headset, allowing for people to interact virtually. Initially the focus will be on new Zoom-like meetings with far more immersive business engagements, but then it gets more profound. Wait for it.
Concept of virtual reality glasses
The Metaverse, or Web 3.0, is developing, but what led us here? First came layer one: blockchain, an immutable database to store information, in concert with the proliferation of cryptocurrencies, an ability to transfer value akin to currency initially, but later representing all assets. The tokenization of assets is a seminal concept and means that anything physical, or more important in this instance, digital, can be proven and has authority via code on an immutable ledger.
The latest manifestation of this authenticated representation of ownership are NFTs (Non-Fungible Tokens), and their popularity is the slippery slope of the Metaverse. Initially, people are buying digital art. In building out the Metaverse, art will be displayed on the walls of homes. However, the assets, living in smart contracts on the blockchain represent all assets. Homes, offices, land and even designer clothing of this world — legally represented by deeds, contracts, and leases — have been tokenized. This means you can buy digital land, homes, and other objects on a platform like OpenSea, to prove you own it. That value creates a network effect, enabling interactions within an ecosystem, and therefore a new Metaverse (world) is born.
Digital land for sale on Decentraland
Indeed, OpenSea is just one of several marketplaces where individuals can buy the future of asset ownership in the Metaverse. All asset ownership, both digitally and physically, could be ported over to an NFT on blockchains. All of these critical pieces are then layered on top of a platform of animation — the actual space inside the headset, which has been with us for many years. It is the asset tokenization that makes this paradigm shift most pivotal. Transactional attorneys should beware, and litigators should feel their eyes widening at the possibilities ahead.
The virtual spaces being developed have cities in which you can buy almost anything. Land, upon which you can build your house, then you can fill that house with pieces of art (via NFT), and wear an outfit that is a verifiable Ralph Lauren suit with Nike shoes. The concert you attend requires a ticket (another NFT), and the subsequent music you want to purchase is also digitally saved and copyright enabled. Again, all of this is purchased from companies with underlining NFT ownership.
These digital worlds will likely be our future in the next decade, and a substantial amount of your time will be inside of these worlds. I know, it’s terrifying. If you are skeptical, however, note that OpenSea processed transactions of more than $3.3 billion in August alone, and this is just the beginning.
In the Metaverse, people will interact, transact, own assets, have relationships, build things and companies, create intellectual property (IP), have copyright issues, and advertise. Further, crimes may happen, insurance likely will be developed, and a massive host of other IRL (In Real Life) concepts that now all now require will evolve — and that will require legal professionals to be involved.
Not to mention the scaling of DeFi (Decentralized Finance), which has already begun and will continue to ramp up. Clearly, this is a burgeoning market. While I have been engaged in this space for several years, a recent white paper from Reed Smith on the Metaverse underlined its importance for the legal industry. It is a worthy read if you wish to continue down the rabbit hole.
What is on the horizon as we move into the Metaverse? DAOs, for one,
DAOs (Decentralized Autonomous Organizations) are entities that have been built by humans. Likely a business initially, but once the code has been written, the code acts as the law and it runs the business autonomously. These DAOs will proliferate both inside, but more importantly for the foreseeable future, outside of the Metaverse. They are already very successful, supporting $25 billion on one DeFi DAO right now. (I will examine the magnitude of DAOs in an upcoming post.)
The implications of the Metaverse for the legal community and within the regulatory community as well as every other facet is enormous. While this space is being built, it is still early. Over the course of the next several years, the Metaverse and all its implications will move from the fringe to a more important arena for lawyers to contemplate and eventually address. Now is time for those lawyers to apply their critical thinking legal intellect.
From the producer… This week, Joe takes a break from legal futurology and tries his hand at being a pub singer. We’re here for it. And so (much to his horror) is Andy Wishart – Chief Product Officer at Agiloft and all round technology guru.
Joe and Andy discuss the beginnings of Contract Express, Andy’s 21 years in legal tech, and the changes and challenges he’s seen along the way. They also chat about the power of document automation, how the legal industry has evolved alongside this technology and Andy’s rather cool career journey.
If you’re one for tech leaders in band t-shirts, Scottish accents (good and bad) or just want to know more about lawtech’s underground karaoke scene, this episode is for you. You’ll also hear some rather excellent efficiency advice too.
This was a ton of fun! I had the chance to record this “holding Joe’s feet to the fire” 😉 conversation about the future of legal industry and where we all may be going with dynamic duo of Marlene Gebauer and Greg Lambert. Thanks to both of them for the opportunity to go down the rabbit hole of technology and the legal industry!
From the producer… The achievements of this episode’s guest have been celebrated by the Council on Foreign Relations, Harvard Business Review, The Economist, The New York Times, Forbes and Wired. Joe is talking to the founder of P-TECH, and author of Breaking Barriers, Stan Litow.
They begin by discussing Stan’s early career – working for the mayor of New York City – which opened his eyes to issues in the education system. This stuck with Stan through roles in public service, the not-for-profit sector and into IBM – where he created “the private sector version of a Peace Corps”.
P-TECH is a global program that blends high school with higher education and on-the-job learning. It bridges the gap between employment and academic systems that lack the provision of workplace skills. These opportunities are available to all students, regardless of race or financial status, in a way that benefits the private sector as well as society. This episode is for lawyers who want to see change in the industry but aren’t sure where to start.
It was a ton of fun recording this podcast with the omniscient and ever engaging Joseph Gartner at the ABA Center for Innovation – (full transparency, I sit on the Council). With Joey’s new role as Director and Counsel, we chatted all things #blockchain, #cryptocurrencies, and #NFTs and their impact on the legal industry. It is fantastic to be a part of a group pushing on #innovation in the legal industry at the ABA with Chair, Don Bivens and the entire Center for Innovation Governing Council.
Question: What do the Iranian national football team, NFTs, Hotel Rwanda and tennis great, Andy Murray have in common?
Answer: Stevie Ghiassi, Co-founder of Legaler and Legaler Aid. And my guest this week!
In this episode, Stevie chats with me about his unlikely journey from running a chain of souvenir shops to becoming a legal tech entrepreneur. He also talks about the important work that Legaler Aid is doing, and ways in which legal tech and blockchain have helped them pivot after Covid took away traditional fundraising streams.
Yet again we’re seeing innovative ways that cryptocurrency and blockchain are being used, and how they offer real opportunities for the legal industry.
Decentralized Finance (DeFi) is a multi-billion-dollar movement that may end up changing the way we all bank
Imagine a time where banks are not needed. Think about all the financial instruments we use today — currency, loans, insurance, bonds, credit cards, stocks, futures, options, interest bearing accounts — being converted to a new model, one that doesn’t require a traditional banking institution.
This is happening now. For those of you who sit on the bleeding edge of technology with me, this has been looming for a few years. However, I have purposely held off writing about it until the data was sound. Now, we have the data.
Decentralized Finance (DeFi) is a multi-billion-dollar movement involving several intermingled concepts. At its core it is blockchain-based and uses an immutable, trustless computer network that verifies transactions without human intervention. The most established platform on which DeFi is built is Ethereum, which was the first major blockchain to move beyond a simple currency replacement, such as Bitcoin. Instead, Ethereum has moved toward completely revolutionizing our ability to automate actions with the introduction of smart contracts, which themselves enable code to facilitate actions stored on that blockchain public ledger.
What is pivotal here is that you can establish complex financial ecosystems that run based on rules; thus, eliminating the need for traditional third parties, like banks and brokerage houses. These rules can dictate action, lock-in value, automate transactions, and create immense efficiencies in the marketplace at a fraction of the cost of our current systems.
There are hundreds of examples of DeFi applications on the Ethereum ecosystem today. For context, Ethereum has a $475 billion market capitalization, just shy of JPMorgan Chase and Visa, making it the 14th largest company in the world. We are extremely early, and I project Ethereum to be the most valuable asset in the world within the next few years; and there is $90 billion invested in Ethereum-based DeFi protocols as of this writing. Addressing concerns since its inception, the platform is currently being upgraded to speed transactions — that is, provide scalability — as well as moving from proof of work to proof of stake, meaning that the previous maladaptive environmental impact will be reduce dramatically.
Prepping for DeFi
Practically speaking, how does this all work, and where is it going? Your blockchain-based “digital wallet” — such MetaMask — is your new on-ramp to DeFi. This will be a nearly universal tool all over the world in the coming years. And while the majority of people in this space now use a wallet stored on a centralized exchange, the path forward will be to “own your own keys”, meaning the private and public keys (which are essentially two elongated number-letter strings) that prove you own that wallet. The private key is akin to your password and should never be given out, while the public key is your address (like your mailing address) to where people can send you assets.
When you use a central exchange, like Coinbase, you do not own your own keys. Once you own your wallet you can load any number of assets into that wallet, including Non-Fungible Tokens (NFTs). Soon this wallet will contain all your assets, including deeds to your house, car, health information, your own digital identity, and much more.
How do you interact with DeFi?
To navigate this process, you begin with an asset (like Ethereum, or ETH, for example) in your wallet. Now you have countless possibilities to go bankless. With that token, you can simply hold it and hope its value appreciates. Each token has a fluctuating value in currencies from around the world.
Another option would be to “stake” that token, which means you are paid to offer that token up as collateral to participate in the network which confirms transactions from one person to another. When you stake a token, a binding smart contract is being created on the blockchain. You are committing to offer your 1 ETH to the network for a set amount of time, and during that time, you may get 10% or more interest. The legal contract is in the code.
Progressing down the complexity scale of DeFi, nearly all financial instruments can be leveraged on this platform through various applications. You could loan out that 1 ETH and receive a yield, which tends to be very high these days, at around 7% to 100% per annum. There are hundreds of tokens on the Ethereum platform that have distinct purpose, although there are other competing blockchain platforms in this space. These platforms too are building out DeFi solutions.
One of the most prominent examples of DeFi is Uniswap. It is the most popular Ethereum-based decentralized exchange (DEX), which allows people to swap tokens that run on the Ethereum network. What is special about Uniswap is that it is an Automated Market Maker (AMM), which means it uses algorithms to price assets instead of buy and sell orders. Individuals can also earn money on the platform by providing liquidity by locking up tokens they own; others can then borrow the tokens and pay interest to the liquidity providers. All of this is using smart contract code without human intervention. All of these assets can be sent from one wallet to another without a bank — this DeFi in action now.
But what does this mean for the legal industry? In short order, government agencies, law firms, corporations, and others will be impacted by DeFi. Each party will need to look at it through their own lens, examine the benefits and understand the risks as well.
If you are a law firm with a big bank as your client, partial short-term disruption is a risk. DeFi offers firms the opportunity to leveraging this technology for the “banks” of the future, which of course, will be code-based. The long-term disruption to the traditional banking sector is real. Unless banks can figure out how to compete when code can facilitate what they’ve been doing for the last 200 years.
For government agencies that provide guidance, this technology can usher in opportunities that previously were only available to the wealthiest people and organizations. The vast amount of “unbanked” individuals — those without access to a bank or credit — can now participate in the economy. However, these same agencies need to determine if there are enough regulatory rails to prevent harm to individuals or businesses.
As for corporations, if they see themselves as “middlemen” that facilitate loans or provide currency, bonds, credit cards, stocks, futures, options, or interest-bearing accounts, they might have to pivot.
DeFi will change the way we bank and interact with assets of all sizes. This shift is as large as the move onto the internet with the tokenization of all assets and value represented digitally.
The legal industry needs to lean into the conversation now, to better digest how to help their clients, and possibly properly guide regulation for the coming codification of our financial world. Because the next iteration of this space will be Decentralized Autonomous Exchanges (DAOs), which will not only impact the financial industry, but will carry over to any entity — firm, business, or government agency — that can and will be run by code.
What do you enjoy about your Amazon experience? Likely everything. The company’s success is derived from a few simple words of company CEO Jeff Bezos’ ethos: “Delight your customers.”
Yet, when you think about innovation, what does that look like inside a law firm? To be honest, it’s probably very different than perhaps it should look. These were the headline topics of discussion at last week’s Legal Geek Uncertain Decade Summit held virtually with Mark Cohen, Executive Chairman of the Digital Legal Exchange, and Richard Susskind, President of the Society for Computers and Law. In their respective lectures, they laid out in stark fashion where they believe law firms are missing the mark on innovation for their clients.
As was artfully illustrated by Cohen in the first of the two talks, Amazon is a corporate conquistador whose North Star is its customers. His premise is that law could learn a great deal from Amazon, and one day be as much of a disrupting force as the Seattle colossus.
What Cohen suggests the legal industry do, is think more like Bezos. While technology is a core component to the company, it is only an enabler. Where Amazon excels is with data. That means, law firms must get to know their clients much better, in order to delight them, Cohen explains, and that means everything must be measured. “You need to know your customers better than yourself,” he adds.
Unfortunately, very few law firms are operating under this ideal, according to Cohen.
If you think about the entire beginning-to-end process of engaging with that client, can you anticipate how they may feel through each gate? “It’s about what happens when they buy something,” Cohen states. “It’s how they buy something, what they want, and when they want it.” Ultimately, it is an end-to-end customer experience, and tech is an enabler to make it happen.
And Cohen did warn — if you read the clouds forming on the horizon — that Amazon law could enter into the legal industry, noting the company’s early inroads into legal with its IP Accelerator, a trademark registration arm that automates IP registrations for people and or companies. Cohen also mentioned Amazon Marketplace, where legal technology companies can add their wares to a legal app store to be downloaded and used. That means that even though Amazon isn’t involved in the practice of law, it is integrating into this space by enabling legal technology as part of delighting customers.
In the second section of their talk, Susskind takes law firms to task on innovation, saying many of them have overpromised and underdelivered. Over the last five years, lawyers have spoken a lot about innovation, he said, but it was often vague as to what that meant. For some firms, innovation means process improvement, for others it means transformation, and for yet others it means marketing.
Susskind outlined 10 features that separate law firms on innovation, placing them in two different camps — second-generation innovation firms that baked innovation into their planning; and first-generation innovation firms that just want “quick wins”.
Here, according to Susskind, is what second-generation firms are doing:
1. Process improvement first, rather than new business models — Often law firms are thinking of innovation as “process improvement”, but that is not enough. Firms need to think bigger and ask themselves, “How might we reinvent the business model to delight our customers?”
2. Marketing noise rather than progress — One of the most popular first-generation innovation models is the marketing bullhorn. Many law firms still churn out noisy press releases declaring various “process improvements” as innovation. However, if you pull back the layers, “there isn’t much there,” says Susskind, adding that the focus should be on real innovation, with major steps forward in re-examining their business model.
3. Automation v. transformation — Automation is certainly popular and important, but transformation is even more critical. In the second-generation mindset, the lens is on the long-term vision for the firm — and that’s better for the firm and its clients. With second-generation innovation, the goal is to transform the business and the practice of law.
4. Pilot programs rather than fully operational systems — Pilot programs are playgrounds to learn, even if many of these pilots never make it beyond the jungle gym. And while that is naturally the case with pilots, Susskind emphasizes that second-generation innovation firms push to go beyond the playground. On this new plain, the goal is to learn and create new fully operational systems.
5. Little impact on figures as compared to serious revenue profits — Another concept Susskind discusses is the idea that innovation will have little impact on returns. Attorneys tend to believe revenue generated from innovation is inconsequential. Yet, if an organization pursues the second-generation path, there can and will be serious revenue profits from these new approaches if they’re done thoughtfully.
6. Arguments v. evidence — Many firms are still in the mindset that they can argue for or against the importance of innovation. Indeed, there are many firms that argue against it. Instead, the focus should be using evidence to support the case for innovation, and that evidence is all around us. However, it needs to be uncovered, cited, and then used to support innovative movements inside the organization.
7. Minority of partners involved rather than majority — In the early stages of innovation, it is usually the stakeholders that support it, Susskind says, but that is not always enough. When a firm sees the majority of partners actually buy in, that is when the real innovation takes place. Firms need a collective majority.
8. Intellectual grasp, rather than emotional grasp — In a very relatable narrative, Susskind talks about stakeholders who “get it” intellectually, but again, that is not enough. As he physically pounded his chest with his fist, Susskind says he knows when firms “get it” because that’s when they get emotional about it. You can see that firms leaders feel it in their guts and understand the importance of innovation at its very core. Then they will make sure it is the lifeblood of the organization.
9. Avoiding competitive disadvantage rather than seeking competitive advantage — In first-generation innovation, firms are generally attempting to hold their own against their competition, Susskind describes. They simply try to emphasis preservation, such as asking, “How can we stay alive in this pitch?” Second-generation innovation means firms are thinking differently, and asking “How can we steal the business from our competition?” The latter is far more aggressive as a result of baked-in firm innovation that came from long-term planning.
10. Preference for short-term ‘tactical’ v. long-term ‘strategy’ — Most of the firms that are just wrapping their arms around innovation still think in the short term and tend to be more tactical. Instead, firms should be thinking of how they can think differently along a decade-long strategy rather than a year-to-year outlook that’s focused mainly on profits per partner.
Cohen summarized the landscape in regard to innovation within the legal industry. “We are at the foothills now, and our clients are scaling the mountain.” Both Susskind and Cohen agree that most law firms are lagging behind where they should be in transforming themselves through innovation. And they feel that the Amazon ethos of delighting your customers should be emblazoned on the border bezel of every attorney’s computer.
Indeed, the acceleration of change is only increasing, and law firms face increasing competition from alternative legal service providers (ASLPs), and the Big Four consulting companies. Clearly, the clock is ticking.
“Don’t wait to change your model when you get pressure to do so by your competition,” Susskind warns. “It will be too late.”
Attorneys look to precedent to solve today’s legal problems. “Steeped in tradition” is how we often describe the legal profession. As result, it’s no surprise that there is inherent tension between emerging technology and the legal profession. The American Bar Association’s 2020 TechReport, which surveys firms and tracks attorney use of technology in their practices, reported that only 7% of attorneys are using tech tools, such as Artificial Intelligence (AI), for document review and research. Firms with more than 100 attorneys are more likely to use AI, as well as firms that engage in mass tort litigation. Despite promises of increased efficiency, productivity, and profitability, a significant number of attorneys cite distrust of the technology and underlying algorithms.
Even though the legal services market is estimated to be a $1T industry globally, Forbes reports that it is also one of the least digitized:
That is, until the COVID-19 pandemic forced the legal community to remote hearings, yoga pants, and dining room tables seemingly overnight. Prior to the pandemic, the ABA’s 2019 TechReport estimated that the vast majority of law firms of all sizes – other than solos – worked in traditional law firm environments. Now, many managing partners are rethinking their office space needs because technology allows attorneys and staff to work from home. Cloud-based document storage doesn’t demand the physical space once required for the paper detritus of the legal practice.
According to commercial real estate brokers with expertise in law firm office space, firms have been downsizing for some time – and the trend is expected to intensify post-pandemic. It’s anticipated that firms will increasingly implement a hybrid model where employees schedule the use of a community workspace or a conference room, but otherwise work remotely. This provides the opportunity for collaboration and meetings with clients in a professional and inviting setting – think chic hotel lobby – while reducing the real estate footprint and attendant expense.
Despite the occasional mishap of appearing in virtual court as a cute kitten, the legal profession has progressed in dog years with respect to the use of technology during the pandemic. Remote hearings provide greater access for certain types of cases and hearings. Litigants and their attorneys are saving time and money by not having the hassle of travelling back and forth to court. It’s easier for litigants to attend hearings remotely without having to take off as much time from work or to arrange for child care. Corporate clients are now accustomed to remote environments and online meetings. Many companies, such as Salesforce, American Express, and Microsoft, have reverted to permanent work-from-home arrangements for some employees. A silver lining of the pandemic is that the legal industry has had no choice but to embrace technology. So, what will the practice of law be like in the next twenty years?
Fortunately, we don’t have to guess how technology will transform the legal profession in the years to come nor do we need to rely on a DeLorean time machine with a mad scientist sidekick. Thomson Reuters Corporation has a forward-thinking technology specialist on the payroll with the title of “Futurist.” Joseph Raczynski is a Technologist & Futurist, Manager of Technical Client Management for the cutting-edge legal products and services company. Raczynski, who is based in Washington, DC and focuses globally specializes in the future of technology and its impact on the legal profession. He has expertise in cybersecurity, blockchain, artificial intelligence, cryptocurrency, and drone technology. Raczynski also hosts a popular podcast, The Hearing, which focuses on legal innovation.
After talking with this fascinating tech expert via halo-conferencing (not really, but made you wonder), it’s clear that technology will play a significant role in the future of the practice of law. While firms were pushed to adapt and use new technology during the pandemic, some firms that have operated for decades with little change, may revert back to that mindset. Firms, however, that buck the system and invest in technology will thrive in the long term. According to Raczynski:
Firms that are willing to embrace technology will provide better services for their clients. They will be better able to quickly sift through and digest immense sums of information. “In the decades ahead, data and services to understand that data will reign supreme,” Raczynski predicts. Facing pressure from corporate clients to cap rates and reduce billings, some firms are incubating legal tech companies to speed development of software and other products to facilitate the efficient delivery of client services. Those that are successful will license their internally developed tech services to other firms or sell the technology to companies. Either way, these entrepreneurial firms are generating new revenue streams while developing tools to better serve their clients. For example, national plaintiff personal injury firm, Parker Waichman, developed case management software, which it licenses to other firms to help them manage mass tort litigation. Not to be left out, smaller firms are banding together in collaborative settings to invest in technologies together that they wouldn’t be able to manage financially on their own.
With insight from Raczynski, let’s zoom ahead for a glimpse into the future.
Raczynski predicts that current roles undertaken by attorneys will change significantly over the next twenty years. “Much of the rote work being performed now, will be gone,” he says. “That said, many new facets which we haven’t even conceived will likely supplant some of those activities.” Certainly, AI imbued eDiscovery tools will be the norm for document review. This technology eliminates the “amounts of eyes on pages,” he says.
AI and machine-learning will continue to facilitate and expedite research and trial practice. Raczynski describes how attorneys will have computer applications at their . Research platforms will have semantic and nuanced understanding of the actual meaning of legal opinions and will go well beyond key-word matching. The applications will quickly access every case and ruling on point and “spit out decisions,” which will likely be “the final decision,” or at the very least be “augmented intelligence” to assist the judge or jury, he predicts. Litigation will become less burdensome and more efficient for the majority of cases. Perhaps, too, this will result in significant financial savings to clients. Interestingly, Raczynski anticipates that technology will reduce courtroom drama as finders of fact will make decisions based on data – and be less influenced by attorney performance. Courts will be virtualized with mixed reality 3D glasses for the judge and jury that will bring crime scenes, accident reconstruction, and other cases to life.
Outside of the courtroom, Raczynski anticipates that technology will automate transactional work. While contract negotiations will still exist, “everything will be interactive, voice automated, templated, intuitive, and securely stored on a blockchain,” he says. Blockchain creates an immutable, digital record of transactions. It eliminates human error, which is commonplace in contract drafting. Retinal scans will be used to confirm the validity of executed documents.
Blockchain technology, according to Raczynski, will be run so that triggering language on this platform will automatically negotiate deals or execute contractual obligations. “What we are talking about is fully codified contracts,” he predicts, “with the ability to interact with factual data and either negotiate on its own, based on Party A’s and B’s preferences, or even self-litigate when something in the code goes awry.” While blockchain is still somewhat nascent and the stuff of computer scientists, it will transform global commerce and the practice of law.
Technology will also transform law practice management and allow attorneys to spend more time serving clients instead of handling administrative issues. Thomson Reuters conducted a study on time management and reported that with smaller firms, approximately 61% of their time was spent practicing law. The balance of their time was spent on the business of running the firm, which is crucial, but not a billable activity. The larger the firm, the less time spent on administrative work. In the future, law practice management will be facilitated through the use of a decentralized autonomous organization or DAO. This is a business model structured on self-executing smart contracts that function without the need for in-person decision-making. Smart contract governance doesn’t require boards of directors or firm management committees to meet, analyze data, and make decisions. Rather, a DAO outsources the analysis through smart contracts allowing for token-holder network consensus. Voting attorneys would hold tokens based upon their seniority, billings or pecking order status.
Admittedly, much of this technology is difficult to explain let alone visualize in practice. However, there are steps that law firms should be taking now to better position themselves to be able to leverage emerging technology. “Opportunity abounds in the legal market right now,” Raczynski says. He portends a golden age for the practice of law: the intersection of where the legal industry marries technology. While firms of all sizes were once reluctant to spend disposable income on technology – even on network security – large firms, in particular, are starting to increase their IT spend and budget for the future. Planning and budgeting for the proactive use of technology are key first steps.
There has been a significant shift in law firm operational budgets allowing for an increase in technology spending. As attorneys have become more technologically advanced, there has been less need for clerical staff to draft pleadings and correspondence, perform filings, mail letters, and other tasks. Younger lawyers, who have never used a Dictaphone or fax machine, have long been drafting their own briefs. Since the recession in 2008, firms have been increasing attorney-to-clerical ratios and spending less on clerical support staff. A legal secretary, who once supported one or two attorneys, is now working with eight or more. As described earlier, firms are spending less on their office leases by reducing square footage. Technology has filled the void left by these drastic operational changes, while freeing up cash for reinvestment in IT products and infrastructure.
Importantly, technology also levels the playing field. Solo and small firms are poised to benefit as the cost of technology decreases. “If they decide to embrace technology, Raczynski says, “it enables them to automate, find answers quickly, and respond to their clients with aplomb.” He recommends that solo and small firms connect with the growing LegalTech community to see how they can learn, interact, and leverage new ideas to benefit their practices. Additionally, law schools are excellent sources for technology training and incubating new ideas.
In Tomorrowland, there will be significant opportunities for tech forward iGeneration attorneys. Law school graduates, who grew up with mobile devices in their strollers, will have key leadership roles. Attorneys with degrees in engineering, network security, computer science and coding will be valuable hires. As technology is second nature for them, they can undertake important IT operations and reverse-mentor firm members who aren’t as tech savvy.
Finally, corporate clients aren’t going to wait for their hometown attorneys to become comfortable with emerging technology – especially when some firms are deploying high tech tools in their practices. Corporations are investing in their own technology infrastructures and expect the same commitment from their professional service providers. They also expect law firms to engage in vigorous network security to protect sensitive client data from malicious actors, which is a real threat. Ideally, law firms will automate routine research, drafting, and discovery review, so that attorneys can focus on customer service, including responsive and timely communications, learning about their clients’ unique business needs so they can be proactive instead of reactive, and cultivating new client relationships.
There is no time like the present to prepare for the future. Attorneys should attend technology conferences, network with legal service vendors, join cyber law committees, and connect with futurists like Raczynski to gain a better understanding of the technology that is already transforming the practice of law. Learning something new will feel uncomfortable at first, but it will get easier. The DeLorean is idling out front and ready when you are.