Monday (8/14/17), the Etherum Alliance announced that ten law firms and four legal institutions that focus in block chain technology have joined the group; Cooley, Debevoise & Plimpton, Hogan Lovells, Holland & Knight, Jones Day, Morrison Foerster, Perkins Coie, Shearman & Sterling and Cardozo Law School’s Blockchain Project.
The new members have also joined the alliances legal industry-working group, headed by Aaron Wright, co-director of the Cadozo Law School’s Blockchain project. Though, Julio Faura the chairman of the Enterprise Ethereum Alliance board of directors reported that the law firms will be working to make sure that blockchain-based technologies are more than just compliant with the financial system, but also compliant with the telecommunications and power delivery industries.
Faura, head of blockchain research and development at Banco Santander, stated: “If we’re going to represent all of these things using smart contracts, and we’re going to mimic the same properties that we have in the corporate world using smart contracts, then it’s very important that we do it in a way that is compliant with today’s laws and today’s policies.”
Coming just weeks following the U.S. Securities and Exchange Commission (SEC) announced its first formal game plan on blockchain-based assets that may also be securities, the development of the working group indicates the desire by some parts of the industry to play by the rules.
Last month, the Legal industry Working Group is hired to educate the legal industry about the potential of blockchain technology, and to create and standardize private versions of the ethreum blockchain.
Working in collaboration with several existing members – BNY Mellon, Intel and JPMorgan Chase – the group is designed to make sure that ethereum smart contracts and assets comply with regulations and are legally binding.
He continued with: “We’re not trying to change the whole economic fabric from traditional systems to a blockchain. What we are doing is we are trying to use blockchain to reflect the reality that we have in our system, in the economic world in general.”
“I’m sure this is going to have a big impact on all aspects of using blockchain in real-life situations,” he added.
Advantages for Attorneys
Though members still firmly believe the finance industry, power delivery systems and telecommunications businesses could be digitized and put right into blockchain, the pros for attorneys may not be as clear.
But founding member, Lewis Cohen of Hogan Lovells, argues there are advantages for legal institutions. There’s a learning aspect, one that his clients don’t want to pay for but expect him to know, especially as state governemtns around the globe continue to chime in on blockchain.
There’s a necessity to know the difference between ethereum, Corda and any of the other distributed ledgers will only expand. Cohen reported the working group is a way for him to stay on the cutting edge for his clients, stating:
“I think it’s incumbent for lawyers in this space to educate themselves, and there’s no better way for lawyers to educate themselves than to be a part of this working group.”
Since the beginning days of blockchain tech, when people debated that code was law, coders and attorneys both have become more educated on the topic. Aside from the expectation of smart contract code, the workflows within institutions are being re-created. And as smart contracts are entrusted with increasingly difficult tasks, Faura expects lawyer’s roles will enhance, not get smaller as some have feared.