Yesterday Hogan Lovells launched DriveChain, a blockchain-enabled platform for document and contract automation. While the application is relevant to all industries, the first client planning to adopt the solution is BNP Paribas Real Estate.
DriveChain technology adds structured data to PDFs and Word documents turning them into “smart documents”. That enables the software used by Hogan Lovell’s clients or their contracting partners to incorporate the document data. That could include generating reports, managing assets, as in the case of BNP Paribas, or conducting due diligence. A key benefit is the potential interoperability between document management and contracting systems, even when the original documents are not created using the same software.
“DriveChain enables peer-to-peer transfer of documents, contracts, and their associated data in a way that increases automation, accuracy, and security,” said Dan Norris, partner and global head of Hogan Lovells’ real estate team. “Because it is accomplished using existing software, clients and their clients can achieve almost immediate benefit from increased document and contract automation and security. Although it was designed in response to a real estate client’s needs, we’ve made it discipline agnostic.”
A key point is that the document data is shared peer-to-peer, not stored in the cloud or on the blockchain. The solution uses the Integra Ledger, an enterprise blockchain designed for the legal sector based on Hyperledger Fabric.
What’s stored on the blockchain is a document identity and hash, the equivalent of a document fingerprint, plus a timestamp. If a document is amended, it gets a new hash. So the primary role of the blockchain is to authenticate documents. The data is replicated across blockchain nodes that major legal firms host.
The concept of smart documents has been around for more than five years. In 2018, the Accord Project was initiated by startup Clause to create standards and open-source software. Project members include many of the largest law firms, such as Allen & Overy, Baker McKenzie, Clifford Chance, Dentons, Latham Watkins, and Linklaters. DocuSign acquired Clause last year. In 2018, Monax launched the Agreements Network, which has quietly disappeared. And OpenLaw focuses on legal agreements that work with the Ethereum blockchain and, in 2019, executed a proof of concept with Thomson Reuters.