Joshua Ashley Klayman is co-head of worldwide law firm Morrison & Foerster LLP ‘s Blockchain + Intelligent Contracts Group and chairs the Wall Street Blockchain Alliance Legal Working Group.
The following post is an exclusive contribution to CoinDesk’s 2017 in Assessment, and represents the author’s individual views, not necessarily those of her employer.
The year that just ended was transformational.
Blockchain and cryptocurrency entered the typical vernacular. Previously, my family members and buddies, a lot of of whom probably viewed me as earnest and well meaning – but nonetheless tinfoil hat-wearing – politely tolerated my attempts to regale them with tales of how “blockchain can alter the world.” But now, dinner conversations regularly revolve around digital tokens and exchanges – and the ever-well-known query, “Why didn’t you tell us sooner?”  I find myself smiling at the realization that, now, sometimes I am the a single at the table who tries to change the topic when cryptocurrency come up.
Those exchanges aside, geeking out about blockchain remains one particular of my favored pastimes, and, happily, in 2017, I had the pleasure of meeting many like-minded folks.  This time last year, nevertheless, I had no thought that several of my closest crypto-collaborators, my blockchain sounding boards, and, really, some of my very best buddies, would be lawyers I’d meet in the marketplace.
Lawyers at big firms, modest firms, no firms, in-property. Lawyers from across the United States, and from about the globe. Whether or not formed in think tanks and legal operating groups, or forged on social media platforms, like LinkedIn, those blockchain legal relationships have proven to be meaningful, genuine and enormously valuable.
Maybe that is my take-away: 2017 was the year that person lawyers and law firms got more than themselves and worked with each other, at least in the blockchain space.
My prediction: In 2018, the speed and scale of technological developments will make non-conventional legal teaming not just good to have, but essential.
In current years, the legal profession has not specifically been recognized for its imagination or its cross-firm collaboration.
Lawyers as a group are famously danger averse – intense legal coaching developed to illuminate prospective hazards and liabilities also might make it difficult to un-see or appear beyond those identified risks. Lawyers usually are applauded – or, at least, self-applauded – for their skills to guide entrepreneurs down nicely-worn deal paths, sticking to precedent, undertaking items the way they are supposed to be done.
In reality, a much more seasoned lawyer once cautioned me, “the final factor any client requirements is a inventive securities lawyer.“
But 2017 was a year that turned this and other traditional law firm wisdom on its head, at least in the blockchain and cryptocurrency space. For me and likely numerous other lawyers, this was the year that I rediscovered a life of the thoughts and the law became fascinating and exciting once more.
At the finish of 2016, the concept that the subsequent twelve months would bring with them more blockchain and crypto-related operate than one particular law firm, or even a number of law firms, could possibly manage, may have sounded to several like a wild and unrealistic hope. To the contrary, in 2016, at least 1 main economic institution had openly expressed an intention to develop intelligent contracts with a goal of decreasing legal invest.
Could any of us have predicted how many new legal inquiries and theories would arise, or how a lot of old and supposedly settled regions of the law would awaken and pose exciting new puzzles? Technological innovations and the proliferation of token sales and cryptocurrency trading have transformed deal organizing into veritable law school situation-spotting exams.
Who knew that technologists and founders would be discussing the Howey test at cocktail parties, that legal panels would be standing area only, or that the SEC’s Cyber Unit would exist, let alone attain a sort of celebrity status?
Alongside numerous brilliant founders, we lawyers in the crypto globe have been given the tremendous chance and privilege, and the amazing duty, of getting on the legal front lines of this fascinating new ecosystem.  We get to interpret and often even shape the a variety of regulatory frameworks that will or may apply. Shoulder-to-shoulder with our clients and each and every other, we lawyers have been provided the opportunity to be co-artists and co-designers of compliant and really transformative technological and commercial endeavors, and not just deal jockeys and naysayers.
What has driven so a lot of lawyers to band with each other as thoughtful, properly intentioned allies?
Is it risk aversion? Partially. Many accountable lawyers might hesitate to give legal suggestions about novel queries with no looking for the views of other people whom they respect. Few lawyers could want to threat getting the outlier, providing out-of-step advice. There may possibly be a perceived safety in numbers.
Is it a matter of self-choice? In other words, are these lawyers who are most deeply immersed in the blockchain neighborhood naturally much more open to new experiences, a lot more collaborative, creative, and trusting, far more inquisitive? Possibly. (Admittedly, as one of these lawyers, I type of like that thought, because it paints a favorable picture. We all like to be particular.)
In my view, even so, these collaborative legal communities and relationships are emerging because they work and, I’d argue, are necessary for lawyers to continue to supply meaningful legal suggestions.
In the face of quickly establishing, expanding universe-scale innovations and ecosystems, we can’t go it alone. Even a single token sale, for instance, typically calls for a team of lawyers from numerous jurisdictions, covering myriad legal content locations – among other people, securities, commodities, money transmitter and other financial services, investment company and investment advisor, broker-dealer, tax and intellectual home – and numerous, if not all, of these legal content material places are changing or getting re-examined in real time.
Luckily for the crypto community, numerous talented lawyers have been brave enough to take stands and make them public, resulting in groundbreaking legal analyses and proposals – like “A Securities Law Framework for Blockchain Tokens,” “The SAFT Project:  Toward a Compliant Token Sale Framework,” “Not So Quick – Risks Relating to the Use of a “SAFT” for Token Sales” and “Conceptual Framework for Legal and Danger Assessment of Blockchain Crypto Home (BCP).”
These are not mere vanity projects. In a legal landscape filled with danger and handful of bright lines, we nonetheless require to give practical guidance to our customers now.
Rather than analytically wrestling alone with, for instance, the U.S. Securities and Exchange Commission’s The DAO enforcement action or Munchee cease and desist order, by understanding, critiquing and creating upon our legal peers’ views, we arguably collectively can come to greater reasoned views, and do so a lot more speedily. Our finding out in this space is incremental why not create a information ladder with each other and climb it?
Perspective sharing amongst lawyers (and interested non-lawyers) may possibly take spot in working groups (like the Wall Street Blockchain Alliance), “believe tanks” like Wharton RegTech, panel discussions, LinkedIn posts or even just swift calls to across town (or across-the-world) colleagues or so-referred to as competitors. To my mind, it matters much less how these discussions take place than that they take spot.
Blockchain technology has enabled us to kind new communities that transcend geographic, socioeconomic and other traditional boundaries.  Maybe it tends to make sense that the old, siloed law firm models want to evolve, as properly.
We are experiencing a technological tidal wave of new enterprise models and novel legal questions, and regulators, marketplace participants and lawyers all are attempting to navigate the current.  The entire blockchain ecosystem arguably positive aspects when lawyers focus some of their energies outward, beyond their individual firms – advancing legal discussion and theory and grappling together to interpret and apply legal frameworks – rather than solely inward.
This shift in priority from maximizing at all charges an individual firm’s competitive benefit to developing a shared, sector-wide understanding may possibly yield effective economic, intellectual and interpersonal advantages, just as blockchain technologies itself promises.
Aligning and realigning ourselves in versatile, nimble teams, across organizations and areas of knowledge, could result in far better considering, far more refined reasoning, a deeper combined information reservoir. Not to mention far more fun.
In our blockchain space, the very speed of alter seems to be accelerating.
What we tinfoil hat wearers hoped for in 2016 is beginning to come about. Bitcoin futures exist in our present.  Hedge funds are trading cryptocurrency. Governments about the globe are moving forward with blockchain technologies initiatives. The United Nations’ pilot plan reportedly has sent vouchers to refugees making use of the ethereum blockchain.
The token sale genie is not going back into the bottle, and many predict torrents of self-described security tokens subsequent year, particularly once a enough number of alternative trading systems have been launched.
Entrepreneurs and investors, eager to devise imaginative capital-raising techniques, are exploring mini IPOs and the intersection of equity crowdfunding and token sales. Chambers and Partners released its initial-ever list of blockchain and cryptocurrency lawyers globally. Legal white papers are quoted like bestsellers, and just about absolutely everyone has a view about the SAFT. It is an exciting time to be a crypto lawyer.
In my view, 2018 is most likely to bring with it types of technological and financial artistry that we cannot presently envision, and almost all of those innovations will require to be understood and analyzed via a legal lens. The global blockchain and cryptocurrency neighborhood needs a powerful, yet speedily adaptive, base of legal understanding on which to create and blossom. We need an informed regulatory climate that protects folks, although encouraging technological innovation to flourish.
The future is fast, and our legal suggestions should be sound. In 2018, cooperative and inventive believed leadership by blockchain lawyers (and non-lawyers) will be crucial.
Have a diverse vision for blockchain in 2018? CoinDesk is now accepting submissions for its 2017 in Review. E-mail firstname.lastname@example.org to share your sector outlook.
Renaissance image by way of Shutterstock.
The leader in blockchain news, CoinDesk strives to supply an open platform for dialogue and discussion on all items blockchain by encouraging contributed articles. As such, the opinions expressed in this report are the author’s own and do not necessarily reflect the view of CoinDesk.
Published at Sun, 07 Jan 2018 11:00:02 +0000