Ten days ago RocketLawyer caused excitement (admittedly mostly among the blockchain community) by announcing that it will open up self-executing smart legal contracts to its consumer base, and today (17 September) rival LegalZoom announces a not dissimilar highly significant initiative, which sees it partner with Clause to provide self-executing contracts to consumers and small businesses.
Clause is a pioneer of data-driven contracts and founder of the Accord Project – an open source, not-for-profit initiative working to transform contract management and contract automation by digitising contracts. It has been building a contracting architecture for smart or dynamic legal contracts that target all the major distributed ledger technologies, including the Ethereum blockchain.
LegalZoom will adopt Clause’s technology and the Accord Project specification for smart legal contracts, making documents available for editing, signing, and execution using the Clause API and platform. LegalZoom contracts will be augmented with Smart Clauses, enabling the contracts to perform blockchain-based transactions and integrate with web services such as accounting, invoicing, or payroll systems.
For consumers, this means that intermediaries (lawyers) will not be needed further down the line when a legal milestone is reached, as the contract terms (such as payment or repayment of a deposit) will be automatically executed.
Whereas blockchain has previously been seen as the prevail of the highly technical or large institutions with deep pockets, this initiative, like RocketLawyer’s, represents the consumerisation of blockchain – now clients of these two disruptors can not only get their contracts from an online bank but, in many cases, those contracts will be entirely automated.
LegalZoom’s initiative is not, however, confined to blockchain. Whereas Rocket Lawyer has partnered with Ethereum blockchain technology company ConsenSys and ConsenSys startup OpenLaw to distribute the ‘Rocket Wallet’ for blockchain-enabled contract execution, Clause is blockchain agnostic and can also operate on non-blockchain implementations. Use cases are also not limited to payments but can include raising invoices and other applications.
“LegalZoom’s North Star has always been to democratize law,” said Vanessa Butnick Davis (pictured), VP and Legal Managing Product Counsel of LegalZoom. “Making sure every American and small business owner can access the same resources previously available only to larger corporations. This collaboration makes cutting-edge technology available to and useable by consumers and small businesses in ways previously unimaginable.”
“This development brings together two genuine pioneers in the delivery of legal services,” said Peter Hunn, Founder of Clause. “It will augment LegalZoom’s existing model with functionality that enables LegalZoom users to connect their existing business systems to contracts that are automatically executed when a milestone is achieved or a task completed. By teaming up with LegalZoom, the value of this technology can be brought to millions of small- and medium-sized businesses and individuals around the world.”
Keep your eyes on the site for our forthcoming interview with Charley Moore, founder and CEO of Rocket Lawyer, where we discussed Rocket Wallet, regulation, and the San Francisco headquartered company’s ambitious platform plans.