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Hail, hail the blockchain kings!

Canadian law firms are tripping over themselves to be identified with the growing blockchain bandwagon and be seen as a leader in this rapidly emerging field.

If you don’t believe me, check out some recent blockchain announcements.

In October, Gowling WLG announced the creation of a dedicated blockchain and smart contracts practice group, claiming to be one of the first of its kind in Canada.

In November, Bennett Jones joined the Enterprise Ethereum Alliance, an open-source blockchain group, while Dentons in December announced it was the first Canadian law firm to join the Global Legal Blockchain Consortium, which is pushing for the use of blockchain technology to enhance the privacy, security, productivity and interoperability within the legal industry ecosystem.

In January, securities law boutique Wildeboer Dellelce LLP upped the ante, putting its money where its mouth is by announcing it would accept crypto-currency payment for legal fees. Crypto-currency relies on blockchain technology.

Heck, even Ontario legal insurance provider LawPRO got in on the action, posting a video and infographic in January that explains blockchain basics for lawyers.

I won’t explain blockchain technology in any great detail other than to say it is “smart” computer coding that creates a distributed form of secured record-keeping among a group of parties that form for a common purpose. Members of the group are encouraged and incentivized to share information and advance the safekeeping of the ledger that records transactions among group members, whatever those may be. Because the ledger is distributed among the group members, whose job is to verify and update it as business progresses, it is considered more secure than a central ledger controlled by a single party.

So, is “blockchain law” a passing fad that will wither on the legal vine (remember Y2K litigation practice groups or the early e-commerce practice groups)? Or is it an emerging new practice field that will fill law firm coffers with crypto-currency gold?

Beth Wilson, CEO of Dentons Canada, hails blockchain as a “new and emerging area,” likening it to cannabis, which is also experiencing a similar gold rush, as law firms elbow each other to be seen as the regulatory leader in this fast-developing sector. “This is not a passing fad at all,” she says of blockchain. “I really believe that blockchain is going to have exponential impact on so many areas.”

Geoffrey Cher, a lawyer at Wildeboer, likens it to double-entry bookkeeping, which “changed the way that businesses operated.”

The technology is about transparency, he says, and taking things such as tracking the value of goods and audit functions to the next level. It will create safer, new environments for doing business. Integrate artificial intelligence into the group’s mix and it will take innovation among organizations to new heights in a digital era.

A June 2017 podcast from Futurethinkers.org identified 19 industries or fields that will be disrupted by blockchain technology.

Among the biggies are banking, insurance, retail, energy services, the public sector, transportation and health care. Areas such as supply chain management, cybersecurity, capital raising and even voting will evolve, thanks to blockchain.

Blair Wiley, a corporate lawyer at Osler Hoskin & Harcourt LLP, who advises clients on the regulatory aspects of blockchain and crypto-currency, says blockchain technology “allows multiple parties to exchange value and record information” in a secure ledger that “no one owns or controls.” He says it “will change the way that businesses interact.”

“We are still in the early days” and he expects new business models to spring up using blockchain that go well beyond uses, like crypto-currency and crowdfunding.

However, “describing yourself as a blockchain lawyer is like describing yourself as an internet lawyer,” he says. Rather, blockchain involves a comprehensive discipline of legal talent to sort through the issues.

Legal work is needed to draft the contracts that will govern these new business models and how groups will use blockchain to further their goals. There are intellectual properties issues, privacy questions, contractual and financing hurdles and much of it involves applying old laws and thinking of new ways of doing business in a purely digital environment, not to mention the legal work needed to support the new startups that are entering this field, which are often already well financed.

More interesting, though, remains blockchain’s potential. “Some of the more interesting and profound applications of blockchain haven’t been thought through yet,” Wiley says. Some argue that blockchain technology has the potential to disrupt controlled social networks such as Google and Facebook, where users sign in to participate and give up control of their personal information and data about their habits and patterns. Wiley says some blockchain proponents are now trying to “disrupt” that and return control and power to individuals over how their personal information is stored and used. “Whether they will succeed or not remains to be seen.”

Imagine dislodging Facebook and all those annoying status updates I get each day? Now that sounds like a practice group that is worthwhile and one that I could get behind.

Jim Middlemiss is a principal at WebNewsManagement.com.