Emerging smart contracts offer possibilities and risks
“Smart contracts” soon may change the way many lawyers practice.
The agreements are permanent, self-enforcing and certifiable. They require only that the parties agree upon a third-party — called an “oracle” — who collects external variable data. Once this oracle verifies information and confirms that the terms have been met, the contract executes automatically.
Frost Brown Todd attorney Matt Schantz works primarily with intellectual property matters, including patent and trademark applications and technology licenses. He said he foresees a new, but equally important, role for the know-how a lawyer can provide — even with a smart contract.
“It might not be as dramatic, but when horses on the roads gave way to cars, there were fewer jobs in the buggy whip industry, and more jobs in the tire and car assembly and engineering industry,” he said.
Gorham said he compares the coming change to the introduction of services such as LegalZoom. He said while self-serve clients can now quickly and cheaply set up LLCs with such programs, attorneys still have a place — even if they aren’t billing by the hour for the same services they used to.
“Lawyers are just going to have to adapt a little bit and still offer expertise,” he said. “I actually think that … there will be more opportunity for lawyers to get involved because we have to draw more clear boundaries and definitions. … You need to take more diligence on the front end to draft the smart contracts properly.”
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