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Blockchain 101: Law Schools Tackle the New Frontier

Blockchain
Blockchain

This article first appeared in the print edition of Legaltech News, featured in the February's Corporate Counsel and The American Lawyer magazines, as "Blockchain 101: Class Now in Session." The end of 2017 signals a full explosion of blockchain into the public eye, most notably its use within cryptocurrencies. Bitcoin, the open-source distributed ledger payment system through which the technology first made headlines in 2009, saw a massive value spike this fall as bitcoin futures prepped for a December 2017 launch. And while cryptocurrencies have long been exciting for the niche communities that develop and trade in them, public appreciation for the digital assets seems to have surged, too. “Bitcoin” was the second most searched global news topic on Google in 2017; “how to buy Bitcoin” was the third most searched question. This interest in blockchain and cryptocurrency is quickly working its way into the legal sector. Increasingly, legal practitioners are considering uses of blockchain beyond finance, piloting distributed ledger technology in sectors such as health care, cybersecurity and entertainment. Legal technology blogger Bob Ambrogi even declared it his “2017 Word of the Year,” beating out major buzz topics such as artificial intelligence and chatbots. Law schools seem to be working hard to keep up with the pace of technological innovation in training the next generation of attorneys. A recent project from Michigan State University College of Law professor Daniel Linna, the “Law School Innovation Index,” found that at least 40 different law programs now provide students with opportunities to learn and engage with technology as part of their formal curriculum, but only a few schools have formal blockchain-based coursework or clinic opportunities. However, this lack of blockchain focus seems to be changing quickly as schools scramble to help law students establish a background in what seems to be an increasingly important technology. Class in Session The University of California, Berkeley School of Law launched a new blockchain course this past spring, joining the ranks of Cardozo Law, Duke, Penn, Vanderbilt and others in providing law students with coursework focused on distributed ledger technology. The course includes students from the law school, business school and Berkeley’s undergraduate engineering department as a means to bring together various perspectives on different blockchain applications. In his three years running the Berkeley Center for Law, Business and the Economy at Berkeley Law, Adam Sterling reported that the school’s new interdisciplinary blockchain course is easily the biggest hit among students. “This is far and away the most popular course. We had over 70 students apply for 20 spots,” he says. Sterling expects that demand both from students and professional learners is only likely to increase. He says he’s “scrambling to create more content,” adding that the school is trying to address some of this need through a set of executive seminars. Blockchain is not an altogether new topic to law schools. Legal scholars have long asked questions about how law is likely to exist within emerging computing technology. “Jurimetrics,” essentially an early study of interactions between law and machines, dates back to the 1950s, right around the time that commercial computers were starting to take shape. Aaron Wright, founder and director of the Benjamin N. Cardozo School of Law’s Tech Startup Clinic, thinks that legal learning and scholarship around blockchain may finally extend much of this research into the public fore. “I think it may be the technology that brings all that learning that’s occurred over that 20 plus years to the mainstream. All those ideas for computational law, this is an application of that.” In blockchain, he says, “We have a playground.” Blockchain is a great way to explore more fundamental questions about finance and transactions both in the U.S. and globally. Wright says, “We’re seeing new possibilities for these very, very deep aspects of our society. How do we structure payment systems? That’s really what bitcoin is about.” This playground is something that finance and technology startups are already knee-deep in, meaning that attorneys entering the workforce looking to support those markets are likely to see some significant changes to their work supporting these industries. The popularity of initial coin offerings (ICOs) as a means to finance startups—essentially selling company shares in exchange for cryptocurrencies such as bitcoin—took off throughout 2017, with companies raising upward of $3 billion combined throughout the year. “It’s almost like everyone has an investment bank in their pocket now,” Wright notes of the phenomenon. But ICOs are not without risks. Many are just now starting to raise questions for regulating bodies and attorneys. “I think we’re seeing a similar tension emerge in securities law,” Wright says. “The way the venture capital model that has predominated over the last 20, 30, 40 years in the U.S., it may actually be under duress. It’s changing radically and quickly,” and this change is likely to create enormous demand for attorney knowledge. Jeff Ward, director of Duke Center on Law and Technology at Duke University School of Law, sees these changes as perhaps the central reason to teach about blockchain in law schools. “I don’t see a really immediate use for blockchain on the way that law firms provide legal services. We want to teach about the technology that our clients are using—blockchain is absolutely that kind of technology. We want students to be prepared to be leaders and help shape that technology,” he says. Caitlin Moon, who teaches the Legal Problem Solving course at Vanderbilt Law School, sees a little further to go in trying to establish this playground. “It’s a very nascent tech, so many, many people are interested in trying to figure out what it can do. But we’re not even sort of in the full case study mode of what the opportunities are,” she says. Building and Buy-In Among the biggest difficulties of starting these law school programs is a dearth of scholars to teach them. Finding qualified instructors for these courses can be tough, given how few attorneys have worked with this new technology. “It is an opportunity for schools to partner with practitioners who have learned these things by doing them. I think that’s one of the primary and maybe only sources right now,” Moon explains. For the most part, law schools have looked outside their walls to find blockchain resources. Berkeley’s new course pulls together instructors from the law school, business school and undergraduate engineering department as a way to draw knowledge from outside the legal discipline. Cardozo and Duke similarly both routinely turn to Wharton School of Business professor Kevin Werbach for their curricular opportunities, hoping to tap his knowledge of the business and finance sectors. Ward calls his interest in collaboration with technologists and attorneys outside the law school walls “quasi-religious.” Although law schools tend to draw heavily from traditional legal scholars and faculty for instruction, finding ways to connect law students to outside information and thinkers may be critical for helping them tap into a working knowledge of new technologies such as blockchain. As Ward explains, “We really have to be working with others, not only in a ‘sure, I can have a conversation with them’ way. In order to do that, we have to change our attitudes.” Law schools have also begun experimenting with providing cross-institutional instruction around blockchain. Cardozo this year will host a “Works in Progress” conference for students and legal scholars across multiple institutions to discuss their ongoing research on legal applications and considerations for blockchain. Wright and Ward co-taught a class between Duke and Cardozo called “Policy and Law Lab: Blockchain” this fall, which received enormous student interest. “I don’t know how many students wanted to take it, but I think if we did an uncapped class, we’d get 50 to 60 students,” Wright says of the course. Given the very technical fields that blockchain sits astride, law student interest may come as something of a surprise. But Ward says, “It’s the culmination of many decades of cryptography, mathematics and computer science. If you hold that out there, the immediate reaction among the legal community is not always one that is, ‘oh yeah, we can master that.’” Ward finds, however, that not only are students excited about the topic, they’re interested in shaping their own learning opportunities. “I’m taking some direction from them,” Ward says of his blockchain students. “They are not at all hesitant, and they’re generally able to jump right in on these technologies.” He also sees students bringing with them the ability to draw lots of different source material into law school classrooms. “I see them drawing from all these different sources. That could not be better,” he says, adding that diverse sources can help drive more complex conversations about the interactions between technology and law. Wright sees even greater potential from this new generation of law students than simply being the next wave of tech-savvy lawyers. Many law students today came of age, left for college, or entered the job market amid the 2007 Great Recession. Even the technology itself, Wright pointed out, came as a result of that financial crisis: The first mined bitcoin included encoded text pointing to a 2009 bank bailout thought to be a criticism on fractional-reserve banking. “I think this technology is a reaction to some of the ailments we faced in 2008. This generation of technologists and their counterparts that are going to law school, they may just be choosing to build their own financial system,” he says. Wright thinks that law students, as future lawyers, are likely to be key to the success of blockchain technology overall. Legal scholars and law professors could, and perhaps should, have a key role in trying to help students see into and beyond the potential legal frameworks for blockchain. He believes “lawyers are really going to be the catalyst here. We’ve got all these digital assets, but they’re not really that useful until we can structure them. Legal academia should take a leading role, at least in criticizing it.”