eDiscovery Daily Blog

Understanding Blockchain and its Impact on Legal Technology, Part Five

Editor’s Note: Tom O’Connor is a nationally known consultant, speaker, and writer in the field of computerized litigation support systems.  He has also been a great addition to our webinar program, participating with me on several recent webinars.  Tom has also written several terrific informational overview series for CloudNine, including his most recent one, Will Lawyers Ever Embrace Technology?, which we covered as part of a webcast on November 28 of last year.  Now, Tom has written another terrific overview regarding blockchain and legal technology titled Understanding Blockchain and its Impact on Legal Technology that we’re happy to share on the eDiscovery Daily blog.  Enjoy! – Doug

Tom’s overview is split into six parts, so we’ll cover each part separately.  Part one was last Monday, part two was last Wednesday, part three was last Friday and part four was this Monday, here’s the fifth part.

Blockchain in Legal Technology and eDiscovery

Sure, those are a couple of great examples and there are a lot of general use cases for blockchain.  But, this is also an article about its impact on legal technology and electronic discovery.  How does it impact those areas?

General Legal Technology Impacts

Because blockchain is secure, immutable and transparent, it enables attorneys to record and authenticate many types of legal matters including contracts, real estate, corporate filings, intellectual property rights, or any other activity conducive to being ledger-based.

Contracts, in particular, are starting to benefit from blockchain.  We have smart phones, smart watches, even smart thermostats and smart appliances, right?  With blockchain, we have smart contracts which not only define the rules and penalties contained within an agreement, they also automatically enforce those obligations.  This article by Caitlin Moon in Law Technology Today goes into considerably greater depth into various implications of blockchain for legal professionals.

Impacts on Electronic Discovery

With regard to eDiscovery, blockchain has several potential significant impacts, some of which are priorities even today:

Source of ESI: One obvious impact of blockchain is that it is another source of ESI that needs to be addressed and you need to have a plan to account for it.  This includes a strategy for preparing and responding to discovery requests.  Just as you need to expand your eDiscovery strategy to incorporate data from mobile devices, Internet of Things (IoT) devices and social media (and other cloud-based platform) data, you now need to include blockchain in that strategy as well.

Investigations: In some respects, blockchain can aid in investigations since every transaction is immutable, verifiable and open to examination.  However, because identities are protected, blockchain also complicates the process of tying monetary transactions to specific entities.

Document Preservation: Because blockchain records are immutable, blockchain is more verifiable, easier to authenticate, and more reliable than other data sources.  Blockchain’s immutable nature would certainly reduce the potential of ESI spoliation since potentially relevant information can’t be erased.

Document Production: Blockchain could also be an improved, more-technology focused method of labeling productions than the Bates numbering system still used so widely today, in that it could make discovery productions more secure.

Chain of Custody: Because of its immutability and reliability, blockchain can provide an indisputable chain of custody.

Forensics: Even forensics can benefit from blockchain.  Forensics expert Johnny Lee of Grant Thornton related in the article mentioned above that “…the ability of blockchain to replace the need for a centralized trust authority to authenticate transactions is perhaps its greatest promise for the forensic community.”

The Epiq blog has more information about impacts to eDiscovery here.  And, HaystackID conducted a two-part webcast series that discusses the basics of cryptocurrencies and blockchain (part one) and gets into the impact on legal technology and eDiscovery (part two).

We’ll publish Part 6 – Conclusions – on Friday.

So, what do you think?  Do you understand blockchain and how it can impact the legal profession?  If not, keep reading!  And, as always, please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.