The idea of autonomous lawyering is a new domain of legal advocacy that visions a strong convergence in many of the working streams from technology development such as open source, iterative and collaborative work and bug bounties. The main tenant is ensuring that legal risks are proactively addressed in the consistently uncharted waters of law and decentralised autonomous organisations (hereinafter “DAO”).
A large portion of the development of DAOs are spearheaded by developers who often are unaware, ignorant or nonchalant about the possible legal and regulatory risks that their projects face. Although, the aggressive entrepreneurial spirit of “ask for forgiveness not for permission” is a progressive improvement from the “act fast, and break things” (as it holds a more empathetic and remorseful tone), it does not negate the overt risk that many of the entrepreneurs and their communities face as more capital and creative, yet adversarial legal minds move towards the decentralised industry.
Fear mongering is not the intention when lawyers constantly mention the legal and regulatory risks associated with the issuance and decentralised coordination of digital assets with the litigation numbers in the decentralised industry starting to steadily increase. There are three notable approaches to deal with the legal and regulatory risks associated with DAOs:
- Lobbying -> Legislation
- Policies and Procedures
Litigation always acts as a gift and a curse by enacting the short term pain of economic and psychological costs to the losing party whilst simultaneously providing long term gains in the form of greater legal clarity to the rest of the market participants.
However, this is not an efficient method of gaining legal and regulatory clarity, not simply due to the economic and time cost of the litigious procedures but also due to the opportunity cost of that time and money being spent in working with the regulators to resolve the pain points of the industry in the very first instance. Lobbying is often viewed as an unclean word, mired by stories of large multinational corporations using economic leverage to create their own rules. A semblance of truth does hold true in some areas, law and regulation has often been used to act as a barrier to entry for newer market participants, a technique for incumbents to be able to protect their market share through the myriad of licenses and procedures that market participants must follow, especially in initial and most operated industry of decentralised organisations, finance.
Therefore, it is no surprise that the majority of the innovation that has happened in the area has not attempted to take into consideration the application of current legal and regulatory risks. There is not only a great deal of difficulty applying legacy frameworks developed for centralised and also largely non-digital native relationships. Market participants not only struggle to deal with legacy legal and regulatory frameworks, but also the conflicting and onerous tasks of attempting to apply the relevant jurisdiction to a DAO, when by its very nation it is borderless.
The last mentioned solutions to being stuck between a rock and a hard place — the long and uncertain approach of suffering with litigation or lobbying for legislation, and doing nothing — is the utilisation of legal and regulatory audits, supplemented by policies and procedures and the safeguard of arbitration.
WACEO has a strong ambition to create a community where these legal solutions can collaboratively be built with the intent of ushering legal and regulatory clarity through crowdsourcing and nurturing legal talents and experts in the decentralised industry to work alongside the practitioners and developers to framework best practices moving forward. Clearly, this is not an overnight task and requires the collaborative techniques of Autonomous Lawyering espoused in the blog of a well-known Autonomous Lawyer, lex-node.
This blog will be the first of many where explore different concepts arising from Autonomous Lawyering. It’s a task worth engaging in and therefore we are looking forward to engaging with the different communities seeking our support and individuals looking to join this mission.