Commercial lawyers in Australia could soon face the same fate as tax agents as the unholy trinity of bots, blockchain and job automation moves swiftly to remove humans from the mundane but vital endeavour of contract administration.
The CSIRO’s Data61 research and development shop is set to pilot a new blockchain-based, internet of things (IoT)-enabled platform to streamline the way Australian businesses exchange data, cement deals and work together.
Dubbed the Australian National Blockchain (ANB), the new platform is set to be built by IBM on their on their cloud platform and has the potential to integrate with IoT to devices to execute what CSIRO calls “smart clauses”.
The vision is that upon the delivery of a contracted item, the smart clauses will be able to tap into external data sources, including IoT sensors, which in turn would then automatically trigger updates on the distributed ledger and in the businesses’ records.
It would also notify banks, custodians or creditors that contract terms have been met, thus allowing the release of payments for the delivery.
While the utility and legal status of smart contracts have occasionally been contested, there is still a broad consensus in the regtech space that the bureaucracy around multi-party transactions including settlements and escrow are ripe for digitisation in the same way the payments were made electronic in the 1980s.
The shift is also being propelled by the obvious potential to record immutable and transparent contract negotiations and signings.
The digital origination of smart contracts also opens the possibility of integrating AI and analytics over the top of regulatory compliance to provide new business insights.
The ANB proposal represents a shift in Data61’s take on blockchain’s future in Australia - last year it warned extensive research is needed to make sure the technology will live up to the hype.
The new project might threaten to cull hordes of lawyers, but that hasn't stopped some firms from seeking to get ahead of the decimation curve.
The CSIRO has partnered with international law firm Herbert Smith Freehills for the ANB project, with the firm the first practice to test the concept along with IBM and Data61.
“For complex enterprise contracts, there are huge opportunities to benefit from our research into blockchain architecture and into computational law,” said Data61 senior research scientist Dr Mark Staples.
“Smart contracts have many applications, and as the ANB progresses we look forward to exploring other business use cases to roll out.”
Regulators, banks, law firms and other Australian businesses will be invited to join the ANB as it progresses.
The pilot is expected to kick off by the end of the year.
If the Australian trial proves successful, the project partners plan to export the platform to overseas markets.
