How Blockchain Technology is Disrupting the Legal Industry

  • 27 October 2017
  • Jnana Settle

When most of us hear the term “blockchain” it’s Bitcoin that immediately springs to mind. Certainly, Bitcoin has been the first “product” to utilize blockchain technology. The banking and finance world has been turned upside down by the rise (and some would say, the recent fall) of Bitcoin, but other industries are also taking careful note of the opportunities and implications of both Bitcoin and the blockchain. Among these is the legal industry, which is already foreseeing both practical and innovative uses for blockchain that many say are poised to disrupt the roles of lawyers and the ordering of legal processes.

The Origins of Blockchain

Essentially, blockchain is a network of linked computers that serve as a public ledger to record transactions. It can be helpful to think of it as serving the same purposes that a database or spreadsheet would, only the ledger entries are decentralized and public. Data is uploaded to the blockchain but shared among thousands of users, whose hardware comprise parts of the blockchain. This allows parties to the transaction to view the blockchain in real time and stay in perfect sync, so that each knows what the other has uploaded. Where Bitcoin is concerned, the blockchain maintains a digital currency system recording and facilitating monetary exchanges, and the ledger aspect maintains a history of any and all transactions that have ever occurred on the computer network.

Building Trust in the Sky

The amazing characteristic of a blockchain system, the aspect that causes this technology process to be able to disrupt an industry as traditional and stable as the banking world, is that in a blockchain no one person controls all of the data. Instead, responsibility is shared among the network, creating a trust in the system even though no trust necessarily exists between users. One wouldn’t naturally think that a network with no trust between users could function as an efficient exchange of currency, but add in universal transparency and a system of control so spread out that it is impossible for any user to change, control, or defraud entries, and it functions as smoothly as a vending machine. A dollar goes in, and confirmation comes out. As legal technology writer Joseph Raczynski puts it, blockchain is “a spreadsheet in the sky,” maintaining a collective history of every transaction to take place in it. At once transparent, yet virtually infallible.

Beyond Bitcoin – Finding New Purposes for Blockchain


The legal industry, long resistant to technology in general, is slowly admitting that blockchain is likely to revolutionize the ways that the public uses lawyers, lawyers use firms, and firms represent the public. Not only that, but some aspects of blockchain, and some extrapolations of its likely future use, might do away with the role of the lawyer altogether. From property records to smart contracts, the future of blockchain in the legal industry is just around the corner – at least, according to the experts.

Property Records

A blockchain system for recording interests in real property could soon prove much more efficient, and less prone to tampering, than current paper-based systems. Ideally, a blockchain system supporting property records would simplify the process for conveyances and liens, guard against loss by physical means such as fire or theft, and cross-check records automatically to let users know if an attempted conveyance was done incorrectly. A system of this type might even be set up to automatically alert a registered owner of property that a conveyance has been filed, enabling real-time fraud alerts similar to those currently used by credit bureaus and credit monitoring companies. Lawyers and firms who assist clients in the title business, as well as those representing buyers and sellers of real property, would need to become instantly familiar with a system of this type.

Intellectual Property

Chris Titze/123RF

Copyrighting and trademarking could soon move into the public information sphere as part of a blockchain. Registrations could take place on a global scale, with blockchain automatically scanning for prior marks or works that are too similar to existing copyrighted material. Like anticipated processes for property land records, intellectual property searches could be streamlined and some of the tasks currently performed by lawyers might instead be automated. In fact, the initial intersection of blockchain technology and copyrights has already come to pass in the form of Proof of Existence, a service that allows users to anonymously store an “online distributed proof of existence” for any document. Users upload their document through Proof of Existence’s web portal, however only a cryptographic digest of the file is stored on the blockchain, not the entire file itself nor ownership information. This preserves the privacy of the person uploading and the confidential nature of the document itself while providing a way for the user to prove in the future that the document existed within their possession at a certain time by later matching the document to the cryptographic digest. As News BTC puts it, Proof of Existence is “essentially a notary public service on the internet” using the same distributed computer power that makes Bitcoin function smoothly.

Smart Contracts


Blockchain could revolutionize the way contracts are made and used, the way financial information is shared, and even the way proceeds from wills and trusts are disbursed. Imagine a world where a script uses automated Google searches to monitor local, national, or world events and then disburses trust proceeds or buys and sells stocks on the open market. While transaction amounts are public knowledge on the blockchain, the processes don’t reveal the names or locations of buyers, sellers, or beneficiaries. Fortune Magazine believes this will pave the way for “loans without banks, contracts without lawyers, and stocks without brokers, executed and recorded across hundreds of servers at all corners of the earth.” While it may take years to see blockchain technology make a dent in smart contracts, or in the legal industry as a whole, there’s no doubt that the time is coming. And when it does, all lawyers and legal professionals will need to understand the basics of blockchain in order to advise clients – and themselves.

About Jnana Settle

Ma Jnana Settle is a Texas-licensed attorney who was born and raised on the island of Maui, Hawaii. Since graduating from law school at Southern Methodist University’s Dedman School of Law in 2016, she has pursued two careers simultaneously. As a lawyer, her law firm is situated in Wylie, Texas, a suburb of Dallas. She practices in the areas of real estate, estate planning, and small business law. In addition, she is a prolific legal content writer and avid legal tech nerd. Her articles have been published by the State Bar of Texas and the American Bar Association, in addition to her articles on Disruptor Daily. She ghostwrites legal content for other lawyers that ends up as blogs, legal articles, and continuing legal education programs throughout the U.S. She can be reached at