Decentralization Making Lawyers a Thing of the Past

5 min readNov 9, 2020


Legal industry under siege

The legal industry has long been subject to glamourous portrayals in literature, tv and film, filled with high flying careerists who solve cases with their remarkable intellect. The day to day reality, however, is more mundane, with administrative tasks taking up an inordinate amount of time and delaying dispute resolution months and years at a time. Moreover, it remains an expensive and out-of-reach service for average citizens to access, especially as cases typically get deferred endlessly. This can multiply these service fees to new unattainable levels. These inefficiencies make the legal sector ripe for disruption from new providers focusing on machine learning, AI, robo-advisors and blockchain. It is in the latter category to which PAID is turning its attention, not just to improve how legal firms operate, but rather to replace them entirely.

Blockchain; a natural fit

Some of the inefficiencies the legal industry currently faces or engenders include:

  • Expensive lawyer retainer and court fees
  • Excessive paperwork
  • The need for physical signatures
  • Securing and proving chain of custody
  • Enforcing contracts

Up to 48% of lawyer’s work can be spent on administrative tasks. Much of this is occupied by simple tasks, such as transferring information across documents or software, working with a client or third-party systems, or processing documentation for sign-offs. This can easily be automated, and resolved through using new technologies such as blockchain and template smart contracts. For example, the need for physical signatures — which is, of course, difficult at present for many people — can be replaced by signing in the same way that one signs an Ethereum or Bitcoin transaction. This provides the confidence that the person signing is truly the person being represented on the document, and so cuts down on fraud, but also means that the signature cannot be lost.

The transparent and immutable nature of blockchain helps provide assurances against the loss or alteration of such important documents. This ties in with securing and proving the chain of custody. Simply put, the chain of custody revolves around documenting the collection and safe storage of evidence. It helps protect against alterations, loss, or manipulation. It involves significant work from legal firms, as it requires them to maintain manual documentation at all times, including if someone wishes to transfer a file or a new file is uploaded. With blockchain, however, documents can be audited and traced at all times, by using time-stamped cryptographic records.

These inefficiencies, combined with the manual nature of the legacy legal industry and its significant overheads (most notably the headcount), means that the legal system is designed to benefit those with the money required to make the most of it. For those with fewer resources, the industry can often be a bewildering, slow, expensive, and unsatisfying experience.

A legal system that is open to all

While blockchain can certainly eradicate many of the inefficiencies outlined above, legal firms are still governed by specific jurisdictional and national laws. This is because private companies are largely unable to enforce contracts without the power of legal authorities backing them. Even if a legal firm finds that a client has been wronged in a contractual dispute and is owed reparations, they must then proceed to prove this in court. Next, clients have to hope the third party in breach of the contract can afford to make the reparations. Consequently, many that enter into business agreements worldwide are left without recourse to a national legal system, due to either cost, corruption, or other factors.

In addition to the costs of hiring legal advice, there are further practical issues such as the cost of travel in pursuing litigation across-borders. The cost of work lost, and all the extra time-consuming calls, meetings, and proof-collection in preparing for the dispute. This means that only the largest of cases are worth pursuing, leaving the majority of people stranded.

PAID Network marks the beginning of a revolution not only in the way it automates the business agreement process, but also in eradicating the inefficiencies within the legal sector upholding the follow-through of these business agreements. Utilizing what PAID calls SMART Agreements, PAID offers a means for two parties who do not trust one another to interact trustlessly, safe in the knowledge that even if one of the actors behaves maliciously the innocent party still has swift recourse to justice through a seamless arbitration system. It achieves this in a cost-effective way, making it possible for anyone, regardless of resources, to participate.

To achieve this, PAID uses a combination of:

  • SMART Agreement templates that are simple and customizable for anyone to use
  • A network of incentivized staked arbitrators who can provide swift dispute resolution for the contract terms and parties involved
  • Escrow and Insurance to guarantee funds will be paid out in the event of contract dispute
  • On-chain signatures and transactions, so that the entire process is completed on the blockchain

Any two parties can quickly and cheaply set-up a contract on PAID. They can agree on the terms, using SMART Agreement templates which are clear and laid out simply so that no legal-specific terminology or knowledge is required. They can then either have funds locked in escrow until the completion of the contract terms; or insure themselves using the PAID Network decentralized insurance pool. Once the transaction is completed, these funds are released, or held pending dispute resolution by the arbitrators. In the spirit of DeFi, PAID is decentralizing legal services #DeLa.

Massing outside the gates of the legal industry

Technology has enabled other industries to grow and reach new customers. In many industries, it has helped newcomers replace traditional incumbents. It is time for the legal industry to become more democratized and technologically-efficient, because PAID Network is here to usher in the next generation of SMART Agreements powered by DeFi tools and enforced by smart contracts and blockchain technology. Through doing so, PAID will bring the legal industry to the many people globally in need of access to simple, secure contracts and dispute resolution.

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