Will automated transactions increase efficiency and allow the legal industry to finally keep up with market demand? Can transactional lawyers turn their services into products? The Agreement’s Network has created a marketplace platform that invites lawyers to create and market legal products in an attempt to disrupt the $600 billion transactional law industry.
Transactional lawyers can’t keep up with the pace of global markets. The inability of legal establishments to quickly adapt to technological advancements prevents them from effectively serving new and developing markets, specifically networked economies.
According to the Agreements Network's white paper, networked economies are created when all the actors inside the business ecosystem become interconnected, enabling customers “to drive choices, select preferences, and make their predispositions known.” Interconnected markets essentially take the power to drive value away from producers of goods and services and place it in the hands of consumers. Such a shift of power means that “billions of micro-transactions and low-value contracts" are executed in digital commerce, surpassing the value of the large and expensive transactions that dominate commerce today.
However, the billions of micro-transactions and low-value contracts “are largely unserved by a legal profession geared towards bespoke, high-value contract creation." Moreover, the current process of creating and executing contracts is slow and costly. Thus, "growing networked markets need a better way to harness legal products and tools to support reliability and network growth.”
The Agreements Network aims to create a decentralized and distributed network, enabling new and more efficient forms of operating agreements by providing a technical platform where lawyers can transform their services into products. Casey Kuhlman, CEO of Monax Industries, a founding company of the Agreements Network states that “as a former lawyer practicing in an emerging market, I have long been keenly aware of the challenges that the traditional practice of law creates for both legal services providers and consumers. The Agreements Network enables not only a new way to think about the practice of law, but also is the first serious effort to move contractual objects into the digital age.”
The benefits of the Agreements Network are two-fold:
Creation of a new legal market.
Protection to consumers and businesses in a networked economy.
By harnessing blockchain and smart contracts technologies, the Agreements Network aims to create “a market for legal products at scale, whether through the support of new commercial use cases, automation of traditional legal services, or designing innovative access to justice tools.” In other words, the Agreements Network creates a market for the legal industry, by building a platform that bridges the gap between a lawyer’s skill to formulate innovative legal products and the technical skill to deliver a finished product. The platform, thus, provides an easy technological solution for lawyers “to create products with the assets they already have: legal know-how.”
The Agreements Network uses blockchain and smart contract technology to “transform static contract forms into Active Agreements.” Traditional legal contracts are merely a record of the parties’ intent at one point in time and given the current state of facts. However, very often, changes of law or fact call for addendums, amendments or other updates. While traditional contracts provide evidence as to what an agreement was, they do not automatically track amendments or updates, nor do they provide a full record of evidence as to what has been done to perform or fulfill the obligations agreed between the parties.
Living Active Agreements, on the other hand, are scalable, enforceable legal agreements. They allow consumers to have a real-time view of their obligations, and businesses to visualize their risk in a compelling way. They are also productive and instantly replicable, reducing cost and time spent in contract creation. Living Active Agreements ultimately provide consumers and businesses with a network of efficient and cost-effective legal products better suited for the increasingly networked economy.
Furthermore, the Living Active Agreements shift the legal paradigm from legal services to legal products. It does so by allowing services to become commodities in the form of digital assets, enabling lawyers to digitize their knowledge assets into products and increase their value propositions. Thus, the Agreements Network creates a brand new market and adds a legal layer to our increasingly networked world.
A Look Under the Hood:
This new market layer serves the multi-sided needs of the legal sector by serving every party, including producers, consumers, testers, and network validators, cost-effectively and efficiently through the automatization of legal products. Using the Agreements Network, lawyers can assemble legal prose and workflow templates, that create, formalize, store, and prove contract rights.
Archetypes operate as factories for Active Agreements, which are the individual smart legal contracts or instruments created by the Archetype. An Active Agreement is a combination of the following:
Legal prose template. Human-readable legal content created by an Archetype Producer.
Machine-readable parameters. Variables within legal agreements that are relevant for smart contract operations.
Formation workflows. The formalized sequencing of events and tasks to be completed information of an Active Agreement.
Execution workflows. The formalized sequencing of events and tasks expected to be completed in the execution of a formed Active Agreement.
Fulfillment events. Arbitrary logs of events that relate to the completion of the legal duties held within the Active Agreement.
Once a lawyer creates a set of legal prose, parameters, and process workflows, the archetype is uploaded to the Agreements Network where the producers will select a price and post a corresponding token-based bond. After posting, testers review the Archetype and are rewarded for reviewing and validating the work of others. Agreements Network Producers are rewarded when their templates are consumed by end users and receive the majority of the token benefits within the system.
The Agreements Network is still a developing concept, currently working on the last details to harden security and planning to release a 1.0 version in the upcoming months to launch the official Agreements Network ecosystem. They also recently released all their open source code, and will publish tutorials and examples over the next few weeks.
With its launch, the Agreements Network will allow attorneys to build a” new legal layer in networked commerce, backed by the certainty of blockchain and smart contract-based evidence and processes.” Furthermore, as stated in its white paper, the Agreements Network “creates a virtuous circle of better legal work product through collaboration and a new avenue for lawyers to make money providing high-quality value to the market.”
About the author
Liz is a third-year law student at the University of Houston Law Center focusing on the legal implications of disruptive technologies, specifically blockchain and its different applications across many industries. She is also the founder and president of the Blockchain and Cryptocurrency Law Association at the University of Houston, established to educate law students about blockchain technology and the opportunities its implementation will create for attorneys.