Magic Circle Firms Double Down on Legal Smart Contracts
Allen & Overy, Freshfields and Slaughter and May are the latest three firms to link up with the Accord Project to develop industrywide standards for legal smart contracts.
April 03, 2018 at 01:25 PM
3 minute read
The Accord Project, a group launched last year to push for industry standards around legal smart contracts, now has some buy-in from major U.K. law firms.
The three Magic Circle firms joining the project are Allen & Overy, Freshfields Bruckhaus Deringer and Slaughter and May. They join the ranks of U.S. Big Law firms Dentons, K&L Gates, DLA Piper and others in participating in working groups to jointly create standards for legal smart contracts specific to various practice areas.
Peter Hunn and Houman Shadab, co-founders of the Accord Project, said that they've seen large multinational firms express particular interest in their effort to produce industrywide legal smart contract standards.
“We have had enormous interest from global firms. We see this as indicative of the potential for smart legal contracts to change large-scale, cross-border commerce, and the immediate need for common standards if these efficiencies are to be realized,” Hunn said.
Each of the three joining Magic Circle firms issued statements noting that the Accord Project aligns with the firms' various interest in supporting legal innovation.
“We recognise that smart contracts and blockchain infrastructure have the potential to revolutionize the markets in which we work, so it's vital that we establish robust standards for their use and ensure consistency,” Shruti Ajitsaria, head of Allen & Overy's tech innovation space Fuse, said in a statement
Although blockchain and distributed ledger technology has quickly become synonymous with smart contracts, thanks in part to the rise in interest around cryptocurrency, the Accord Project is intent upon creating “blockchain-agnostic” infrastructure to legally enforceable smart contracts. The group is looking to develop standards around both “on-chain” and “off-chain” contracts.
“When we consider smart legal contracts, it becomes apparent that one doesn't necessarily need all of the characteristics that a blockchain can provide. In fact, to mandate this may be detrimental,” Hunn and Shadab said in a written statement to Legaltech News. “To maximise the benefits distributed ledgers can bring the counterparties to a contract, there is a need for a hybrid implementation that merges the benefits of on-chain execution where applicable with the benefits of off-chain execution.”
Given that the standards are set to be industrywide, the interest and broad participation from Big Law firms seems like it could potentially skew standards to favor large multinational corporations, but the Accord Project founders are hoping that their broad partnership model can help ensure that consumer-facing law practices are given an appropriate voice in the development process.
“We have a number of consumer-focused law firms involved, as well as partnership with Clio that supports this. It is certainly one of the reasons that we open sourced the technology in the first place,” the founders said.
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