Composed of 10 law firms and three law schools, the Legal Industry Working Group will focus on blockchain policy matters.

When the Enterprise Ethereum Alliance (EEA) launched in 2017, its members included major corporations like JPMorgan Chase, Intel and Microsoft. But the alliance, whose members look to support and develop enterprise solutions on the open-source Ethereum blockchain, was missing participants from one key industry: the legal sector.

Over the past few years, interest in blockchain technology has grown steadily among law firms, which are creating blockchain practice groups and accepting bitcoin payments. What’s more, law schools have begun researching the broader legal repercussions of blockchain-powered commerce.

The EEA has taken notice, and it has started to attract legal members with the launch of its Legal Industry Working Group.

As of this publication, 10 law firms have announced their membership in the EEA and the Legal Industry Working Group: Cooley; Debevoise & Plimpton; Goodwin Procter; Hogan Lovells; Holland & Knight; Jones Day; Latham & Watkins; Morrison & Foerster; Perkins Coie; and Shearman & Sterling.

Three educational intuitions have joined as well: Cardozo Law School at Yeshiva University; Duke Law Center on Law & Technology at Duke University; and the Department of Legal Studies and Business Ethics at the University of Pennsylvania’s Wharton School.

Current EEA members BNY Mellon, Consensus Systems, ING Group and JPMorgan Chase & Co. will also participate in the working group.

While the group will meet over the next few weeks to formally draft and release its objectives, Aaron Wright, chair of the EEA Legal Industry Working Group and co-director of Cardozo Law School’s Blockchain Project, noted that the objectives will likely comprise three main areas.

The first is “thinking about best practices when it comes to developing” blockchain empowered smart-contracts, he said. “The second is supporting other initiatives and development within the EEA’s other working groups,” such as the Banking Working Group, the Supply Chain Working Group and others.

Lastly, Wright noted the Legal Industry Working Group will seek to shape and weigh in on future regulation and policy issues affecting blockchain development.

Jeff Ward, director of Duke Center on Law & Technology at Duke University, said law schools’ participation in the working group will give their students the opportunity “to not only understand [blockchain use] but to shape it; and when they graduate, we want them to be movers and shakers in this new world.”

For law firms, Josh Klayman, of counsel at Morrison & Foerster, said the group was an opportunity “share ideas, come up with best practices together, and really leverage our experience and the [EEA's] experience” in fostering blockchain innovation.

Given recent moves by regulators, many law firm members also see a need for attorneys to be more active in understanding and guiding blockchain policy that affects cryptocurrency markets, which utilize the blockchain to transfer currency like bitcoin. The Securities and Exchange Commission (SEC) recently declared that some groups trading in bitcoin should be regulated under federal securities laws.

Reena Agrawal Sahni, partner at Shearman & Sterling, noted that as regulators “are still trying to figure out how best to integrate [blockchain] into their existing regulatory frameworks or how to amend or change these frameworks … there are opportunities to help shape that dialogue rather than seeing it as a risk.”

The working group’s focus on blockchain policy issues, Klayman added, is primarily a response to client demands. “What we are most interested in is what our clients are interested in. So we are fielding all kinds of questions from clients and potential clients” on where blockchain policy is heading.

What many in the group are not yet discussing, however, is how to use blockchain-powered platforms in-house at their firms. “At this point I’m not aware of us implementing blockchain solutions in our firm; however, that maybe something [that comes up] as this industry matures.” Klayman said.

Strategic Technology Forum USA will take place at the Rancho Bernardo Inn Golf Resort & Spa in San Diego on Oct. 11-13, 2017.

Designed to connect a C-level audience of Am Law 200 leaders with the most progressive IT, data and security disruptors, STF USA will challenge the way legal services are delivered in the future and provide you with practical ideas to drive your strategic planning. Join our community and together we will future-proof the business of law!