Lawyers: Start Thinking Like Developers

By Ken Moyle

Attention all business attorneys who...

...took the LSAT because there was no math in it

...still pack a Blackberry

...think a "smart contract lawyer" is a smart lawyer who writes contracts.

I bring you some disturbing news. Your life is about to change.

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Technology is transforming your clients' business, and you cannot ignore it. Your clients may not be in the technology business, but they have recognized the need for tech to keep them competitive. As a trusted adviser, you will need to recognize how technology is influencing the relationships inside the client's company, and the resulting effect on your ability to continue adding value.

The best example is the resurgence of the smart contract.

A “smart contract” is a computerized transaction protocol that executes the terms of a contract. Although the concept has been making the rounds for 20+ years, it has recently become a dominant buzzword. That’s mostly because the immense hype around blockchain (distributed ledger) technology has rekindled the outlook for autonomous execution and enforcement of agreements. Because the blockchain algorithm provides an unalterable and robust list of rightful ownership and conditions of transfer, transactions can be recorded without a middleman.

Nick Szabo, the computer scientist and lawyer who introduced the idea of a smart contract back in the mid-1990s, said last week at the first-ever Smart Contract Symposium that public blockchains such as Bitcoin and Ethereum are the ideal secure, reliable infrastructure on which to deploy and execute smart contracts.

With the likelihood of commercially viable smart contract platforms becoming increasingly certain, there is -- or should be-- an equally increasing pressure for legal practitioners to be familiar with the means by which these platforms will be instructed to carry out the terms.  

As smart contract developers work to find a sweet coding solution to a legal issue, someone will need to anticipate the potential actions or responses that could have unintended consequences or even undermine the entire agreement.

Who is that someone? Right now it’s nobody.

The developers have not been trained to assess and mitigate contract risks; the lawyers do not have enough understanding of the technical overlay to fully appreciate what those risks may be. This vital function sits unmanned, a desolate island shrouded in fog and cut off from all lines of company oversight.

UPDATE 3/21/2017: A recent report in MIT Sloan Management Review recognized the need for "data translators" due to the communication gap between executives and big-data analysts.

The technical community has already begun to recognize this, with some suggesting that it is the developers’ responsibility to bridge the gap in lawyer-technologist communication:

Simply creating a blockchain and a smart contract does not guarantee it cannot be intentionally or unintentionally be misused. It is up to us as technologists, to ‘think like a lawyer.’ 

- Ed Featherston, Should developers start thinking like lawyers?, Security Zone (Dec. 14, 2016)

That is half correct. Its corollary is also true: it is up to lawyers to “think like technologists.” And the lawyer’s half of the equation is arguably more important to the company and to the lawyer. Without understanding how client technology works, lawyers are going to be less than adequate at providing their fundamental legal function to their business clients, to the ultimate detriment of both.

But here’s the good news. Our clients need us more than ever.

Today, the most valued -- and successful -- legal advisers are those who have gained the trust of their clients by thoroughly understanding the business context of the issues put in front of them. They are able to recognize the business problem arising from the legal issue, and communicate with their clients as fellow business people.

As smart contracts evolve, successful business lawyers will need to be conversant in a third language.

Not only will they need to understand their clients’ business; they will also need to comprehend the technical concepts underlying the contractual relationships their clients enter into. Their client-side conversations will necessarily spill over to the technical side of the house, requiring lawyers to listen, learn and develop reasonable technical acumen.

Only then can we provide the legal support necessary to encourage responsible, optimal use of the tremendously powerful technology our clients have at their disposal.

And then, just maybe, we really can be Smart (Contract) Lawyers.

Ken Moyle is President of K6 Partners LLC.