K&L Gates is making a bet on blockchain, a technology that could take on a major role in contracts and other legal applications.
The Pittsburgh-based global law firm has put a plan in place to develop blockchain capabilities in-house, eventually allowing the firm to launch its own private blockchain.
While it has a number of applications, blockchain became widely known through the spread of the virtual currency Bitcoin, which relies on the still-evolving technology. K&L Gates plans to start with smart contracts, which use encrypted information on blockchain to implement the terms of a contract automatically.
To begin, K&L Gates is working with Chainvine, a technology company based in the United Kingdom and Sweden, to provide its lawyers with blockchain modules so they can learn the technology. That will allow K&L Gates lawyers to become familiar with using blockchain in a “sandbox” environment, said partner Judith Rinearson, who co-chair’s the firm’s fintech practice.
From there, they will work with clients and Chainvine to create “use cases“—a set of steps for each type of action—and eventually establish a private blockchain, she said. It will likely take about a year to reach that point, Rinearson said, with the sandbox stage lasting three to six months.
“Our lawyers are all really excited about this,” she said. “Until you actually touch [blockchain] yourself, it’s really hard to get a handle on it.”
According to K&L Gates, few if any law firms have gone as far as creating a private blockchain. Some other kinds of businesses have done so.
Rinearson said she and her colleagues considered other options that would give them access to the technology, like joining a consortium, but they ultimately chose to take a more “hands-on” approach. The firm will likely expand its use of blockchain as it becomes more familiar, she said.
“We’re unusual for a law firm. We do have coders on staff,” Rinearson said. “It’s the very beginning of this new technology, which many people believe that it’s going to make a profound change in how we do business and how we service our clients.”
Combined with artificial intelligence, blockchain has the potential to change how lawyers work with clients, particularly on contracts, she said, but it’s doubtful that lawyers will be cut out of the process.
“Things like negotiating a contract, understanding the terms, all those pieces I don’t think you’re going to be able to replace,” Rinearson said. Still, she added “these are changing times and that’s why I think as a law firm serving clients it’s important to understand it and be on top of it.”
Several firms have created blockchain legal practices.
An associate at Morris, Manning & Martin in Atlanta recently started his own practice area focused on blockchain-specific issues. Perkins Coie and Cooley also have blockchain practice groups, which include securities, tax, corporate and technology lawyers.