Aaron Wright, director of the Benjamin Cordozo School of Law's Tech Startup Clinic.

As the chairman of the Enterprise Ethereum Alliance's Legal Industry Working Group and co-director of “The Blockchain Project” at Yeshiva University's Cardozo School of Law, Aaron Wright is at the forefront of bringing blockchain technology to the practice of law. But Wright knows that blockchain still has decades to go before it is as common at law firms and legal departments as e-billing or e-discovery platforms.

Still Wright, an associate clinical professor of law at Cardozo and the founder and director of the school's Tech Startup Clinic, believes that the blockchain technology space, while nascent, is at a seminal point in its history, and efforts to define the trajectory of the technology and educate on its eventual disruption are needed now more than ever.

In the days before Cardozo Law's first-ever “Works in Progress Program on Blockchains & the Law” academic conference in late January, Wright spoke to Legaltech News about why it's important to understand blockchain technology early on and how the technology is already changing the economy as we know it.

LTN: What was the impetus behind launching The Blockchain Project at Cardozo Law?

Aaron Wright: We've done a whole bunch of work related to blockchain technology, and we realized we should probably bring that together under one umbrella, which we called “The Blockchain Project.”

The primary thought behind the project is, in a holistic way, to address some of the tricky legal and policy challenges that blockchain technology presents. So the project forces us to re-examine some of the processes we have in place when it comes to our financial services industry, when it comes to legal industry, when it comes to the insurance industry. And because blockchain has the possibility to disintermediate certain intermediaries that are involved in those processes, it is creating new tensions with existing laws and systems.

Why do you believe blockchain-powered smart contracts adoption is not happening faster?

What I'm seeing is smart contracts being used, though they are not necessarily being used by lawyers yet. All those token sales happening nowadays, they are facilitated via smart contracts.

So those computer processes and those computer programs are being created on a daily basis. I think by last count there was over 2 million that are in existence, and some of them are doing really important things.

These smart contracts for token sales, what they are doing in so many lines of code is stripping out and automating the core functions of what lawyers would do, what accountants would do, and what certain aspects of financial services companies do. These small lines of software are having dramatic impacts on various different industries.

But I think when it comes to the legal industry, there is still a lack of understanding of what smart contracts can effectively do. I think a part of the issue is it's a bad term. A “smart contract” doesn't necessarily mean a legal agreement. It means a small computer program or process that is running on a blockchain.

Some people think you can turn entire agreements into source code. We're not there yet, and I don't know if we'll ever actually go there. But what you can begin to do is program how assets are transferred between parties in new and novel ways.

Blockchain records are regarded as unchangeable. Can this attribute be an issue given human error?

They are changeable, it's just really hard to change them. Some people refer to blockchain as being immutable or unchangeable, that's technically not correct. I think the more accurate term is that they are tamper resistant. It is really hard to change information stored on the blockchain.

The reason that is the case is because the blockchain is maintained by all these different computers, potentially scattered across the globe. So in order to change anything, you pretty much have to convince everybody or at least a huge portion of the party to modify the data that is recorded.

In terms of modifying an agreement going forward, you can create another record, so you have a chain of changes which can be really useful. We've seen this with software development, where they track every change to a software library, and you can see it evolve and modify over time.

When you do see blockchain-powered legal technology actually being used in law firms and legal departments?

In terms of when the technology will be adopted, I think this is a 20-year adoption curve much like with the internet. We're right at the beginning of it, and over the first four or five years we're going to see the first use cases emerge with blockchain technology.

In many ways, they will replicate or imitate or improve what we currently have, then we'll move into a phase two or three of blockchain technology, like a blockchain 2.0 or 3.0, where these types of infrastructure can fit behind more and more online applications and business processes.