Global law firm Herbert Smith Freehills has formed a Digital Law Group to advise clients on the risks and opportunities that come with digital transformation, putting a particular focus on smart contracts.

The new global group comes as both clients and Herbert Smith Freehills itself face significant digital transformation, chief executive Mark Rigotti said.

"Our people need new skills to be able to provide our clients with the advice they need in this new, evolving business environment. We know that this isn't something that can happen in just one part of our firm – it has to happen across the whole business," he said.

The Digital Law Group will provide the firm's lawyers with more skills and support them with technical experts who have an understanding of the opportunities, risks, ethics and regulatory requirements brought on by digital transformation, he said, noting that the most pressing current hotspots are artificial intelligence, data, digital assets, robotics and automation.

The group is made up of a permanent team of senior lawyers, supported by a rotating cohort from across the firm.

"Because digital expertise is increasingly 'business as usual', we want as many of our lawyers as possible, including graduates, to participate," Rigotti said.

One of the key initial focuses of the Digital Law Group will be smart legal contracts, which HSF describes as contracts that are able to self-execute, because their operative provisions have been replicated in computer code and "plugged in" to a secure, digital ecosystem that effectively performs the contract, including recording performance, making payments and giving notifications.

All contracts can be made smart, and in time most will be, HSF said. This complex but inevitable transition will require new skills, new collaborations and new processes. The new group will help clients draft smart legal contracts and advise on the legal issues around them.

"The next 10 years will see an unprecedented level of change in the way legal services are delivered. The primary tool of our trade – the contract – is being digitised," said Herbert Smith Freehills' global head of digital law Natasha Blycha.

"If we look at the impact the digitalisation of money had on the financial industry and on the economy, we start to get a glimpse of the enormity of the impact we can expect from the digitalisation of contracts. Our clients will need really informed and thoughtful advice on this – that's what we're doing with this initiative."

The firm said the group would work closely with Herbert Smith Freehills' alternative legal services team, which provides market-leading solutions for high-volume, document-intensive legal work.