Blockchain remains a hot topic, including in legal, but I have long wondered when we would see the first instance of blockchain for law practice management. (I contrast that with the impact blockchain is having on law practice, namely a growing number of lawyers who advise on it. See for example my August 2016 post, Blockchain – Will It Affect Your Practice or Firm?)
ThinkSmart offers workflow automation software that can “automate any business process.” The company first came to my attention this summer via a case study of ThinkSmart at the Yahoo law department. In a conversation with the company, I learned that ThinkSmart has multiple legal customers, especially in legal operations for high tech customers.
A press release today explains the “launch of BlockAudit, built on blockchain technology, a first in the Digital Transaction Management industry.” It continues by saying
“Using smart contracts, BlockAudit allows workflow audit trail data to be seamlessly stored in the blockchain. BlockAudit’s private blockchain utilizes a system of record-keeping that is verified by a network of computers. The blockchain keeps a permanent record of all transactions, making it the perfect ledger for different actions that have taken place within a workflow.”
In the press release, CEO Paul Hirner, explains that this enhances security and compliance and will change how companies sign and manage contracts, reducing cost and providing greater capability to validate transactions.
So, why I am writing this? As far as I know, it is the first instance of blockchain being used in software targeted, at least in part, to legal operations and law practice management. (As always, contact me or comment if you know of released commercial software for law practice management already incorporating blockchain.)
This press release is not for the faint of heart (a sentiment I shared with a ThinkSmart communications contact). And I am not entirely sure what to make of it. I am not sure precisely what problem BlockAudit solves for law departments. The answer that follows is pretty techie. The metamessage is that blockchain is not as easy to understand as many articles suggest. Be sure to read my closing paragraph for what all this may mean.
To answer what to make of this, I spoke with Michael Concannon, Co-Founder. He said that
“As organizations move to more software as a service (SaaS), key records and audit trails will no longer reside within the enterprise. With BlockAudit, an immutable record of transactions will exist on the blockchain accessible to multiple parties who hold appropriate permissions. An example of where a legal organization might want an immutable record is in a reduction of force. With a RIF, having an unassailable audit trail of notices sent and received has value. Today, internal email can provide that. But in an increasingly SassS world, the enterprise might not own the logs. With BlockAudit, they will have the record.”
In sum, Concannon reports that BlockAudit offers more security and a better audit trail than existing systems.
As you think about blockchain, keep in mind that the duty of tech competence many US states establish for lawyers may someday include being able to understand the details here. Let’s hope, however, that when the blockchain spreads to daily life, it becomes more like the Internet today. In the early days of the Internet, it helped to know what HTTP stood for and how the net actually worked. Today, most of us don’t worry about that. Blockchain is not yet at that stage.