NEW GBI USE CASE SERIES – Solving problems and delivering value.
With our new Global Blockchain Initiative Use Case Series we will take a look at different concepts in various industries and in various domains. Starting off with this first Chapter, Ivica Kuzmic from our Switzerland Hub presents a #legaltech use case leveraging Hedera Hashgraph’s technology.
Ivica has developed a #concept for a #decentralised application for legal service delivery that will empower the user to better control legal costs and reduce the complexity of the overall process.
“Whereas many of the mentioned issues require sweeping changes on the global and institutional level, some legal service delivery issues could be immensely improved immediately by adopting distributed ledger technologies. The further development of distributed ledger technologies promises to revolutionize legal services delivery by significantly changing the way clients interact with their (traditional) legal advisers.Therefore, the proposed solution aims at excluding third-party intermediaries from client interactions and thus, leads to technology-enabled enforced trust between the contractual or agreement parties.”, says Ivica
The legal service profession is at its crossroads and is undergoing profound change.
In recent years, we have witnessed an increasing number of legal proceedings dominated by complex, international issues. Globalization, cross-border trade and co-operation, and complex products and services require a comprehensive, multidisciplinary legal review and more flexible delivery of legal services. Yet, the deliberative response by the legislators and legal service providers has remained surprisingly reactive.
Moreover, the traditional legal business model is no longer viable as the recent economic crisis has brought many national and multinational companies to the verge of bankruptcy. The new reality forced these companies to look for predictive, cost-effective, scalable, and agile delivery of legal services. To understand their client ́s needs, lawyers must now demonstrate business, technology, project management, data analysis, and psychology abilities. However, legal training is still lacking as it mainly focuses on preparing students for a traditional career at a customary law firm.
Latest technology advancements have affected legal services delivery and caused a gradual shift towards affordable and standardized solutions. As clients got used to technology and legal and quasi-legal solutions provided by non-law firm providers, the demand for traditional legal services decreased. As a result, a new group of alternative legal service providers emerged that specialize in breaking the “traditional” process down into many different services, e.g., contract management, document drafting and review, or investigation and litigation support. They enabled clients to save money on repetitive legal tasks and focus on more complex processes and issues. For this reason, customers are no longer willing to pay hourly rates for services that could be delivered en masse. Consequently, traditional legal service providers must now offer the exact cost-efficient technology solutions while retaining the same profitability level.
Whereas many of the mentioned issues require sweeping changes on the global and institutional level, some legal service delivery issues could be immensely improved immediately by adopting distributed ledger technologies. The further development of distributed ledger technologies promises to revolutionize legal services delivery by significantly changing the way clients interact with their (traditional) legal advisers. Therefore, the proposed solution aims at excluding third-party intermediaries from client interactions and technology-enabled and enforced trust between the contractual or agreement parties. This will facilitate automated delivery of highly repetitive legal services and allow lawyers to concentrate on more complicated legal problems that require deeper legal analysis. Due to their properties, digital ledger technologies also enable the management of immutable records, which is another feature that plays well with the provision and delivery of legal services.
The proposed solution is the next-generation technology that will enable both natural persons with modest incomes and large multinational corporations better manage their legal costs. At the same time, they will enforce their legal rights and will have the capacity to automatically store critical documentation for evidence purposes and provide it at a moment ́s notice. This immersive and intuitive multi-device end-to-end solution with a powerful interface has been designed as a decentralized application built on Hedera Hashgraph as the underlying technology. It will guide users from the beginning till the end of the contract or agreement signing process, with transaction records and critical documentation being stored automatically and available at all times.
The market analysis identified three main user categories as possible service beneficiaries: natural persons and legal entities, legal service providers, and judiciary officials. It revealed their motivation, goals, frustration, and needs, which helped build the powerful solution to exactly answer those needs. As a result, two different versions of the solution now answer “Single User” and “Enterprise User” issues. The “Single User” version contains more straightforward solutions best suited for natural persons and small companies who do not require intensive usage of the . The “Enterprise User” version of the service includes more advanced and flexible features best suited to accommodate large client ́s individual needs.
Given its features, potential, and innovative design, the dApp will be priced at a premium. It will generate the majority of the income by selling subscriptions with an option to ask for commissions at a later stage. A comprehensive lead generation strategy has been designed to raise the awareness of the project. It requires developers and senior business team members to present the solution at FinTech and RegTech conferences, participate in startup pitches, and write articles, blogs, and social media posts.
Finally, the financing and the decision about underlying technology have been meticulously considered to enable the long-term and sustainable development of the dApp. Although the team identified three possible fundraising strategies is has decided to offer a partnership to a leading organization from the legal industry first. Not only is this dApp an excellent investment opportunity. The synergies between this solution and the legal organization ́s know-how are a perfect opportunity to provide clients sustainable, cost-efficient delivery of legal services while maintaining the same or even improving profit margins.
After careful consideration of the envisioned features and current stand of DLT, the third generation DLT Hedera Hashgraph provides the best platform for the long- term success of the decentralized application. It meets the need for a stable, fast, secure, and cost-efficient solution capable of withstanding cybersecurity attacks best. Given these features and its flexibility, Hedera Hashgraph is projected to stay relevant and competitive compared to other DLTs, at least for the foreseeable future. Ultimately, the solution demands a network capable of handling the exponential growth of both users who require competent and secure delivery of legal solutions and the total number of forthcoming contracts, agreements, or other services. Hedera complies with this requirement as well, given that it is already as fast and efficient as current legacy systems.
Keywords: blockchain; legal services; Hedera Hashgraph; entrepreneurship; use case; law
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About the Author
Ivica Kuzmic is a Senior Legal Consultant at EY Law. He is based out of Switzerland, where he advises large, multinational banking clients on complex cap- ital markets and digital transformation issues. His areas of expertise also include IP, data protection and privacy law, and contract and DLT/Blockchain Law.
Ivica is passionate about Blockchain technologies and actively supports initiatives aiming to help bank- ing, insurance, and government organizations realize its potential and versatility. He holds Master’s Degrees in Business Administration, Law, and Blockchain Technologies and is currently enrolled in a DBA program.