Legal Fictions: The End of Lawyers?

Posted on April 17, 2014 by Nancy Jane Moore

In a recent podcast of the Geek’s Guide to the Galaxy,  Karl Schroeder opines that technology will replace lawyers.

Not only will this happen in the far future world he envisions in his novel Lockstep, but “we’re headed there in about six months in terms of contract law,” Schroeder says. He bases this in part on the platform and programming language ethereum , which is similar to the programming that underlies bitcoin.

According to Schroeder, contracts created under this technology will be “smart contracts.” They will live in the Internet and not be controlled by any central authority. The contract will follow the rules to the letter, making it impossible to cheat.

It’s a lovely idea, but I don’t think it’s going to work.

Don’t get me wrong: The kind of software he’s envisioning may have a significant place in legal negotiations in the future. I like the idea of the code underlying the contract being visible to all.

But while this might work fine in developing a contract between equals, I can’t see how this solves the problem of unequal bargaining power that is one of the major issues in modern contract law. I can see how a smart contract could prevent an insurance company from reneging on something it promised to its insureds, but I can’t see how an individual who wants to buy that insurance can force the company to change the terms that favor the company.

Group action by the company’s customers might force changes in terms, and such smart contracts might be a way to organize such group action, but I still have my doubts. Getting people to work together even in their own best interests is hard, as anyone who has ever done union organizing will tell you.

Plus Schroeder’s comments imply that he thinks the key problem with contracts is cheating, which he thinks can be solved by having a system that follows the rules to the letter.

But cheating isn’t the only thing that leads to contract disputes. It’s not even the most significant problem. Most of the time people fight over contracts because they have a different understanding of what the terms mean.

When I write a story – or even a sentence – some readers interpret it very differently from the way I meant it. I don’t think our programming technology is yet smart enough to create a contract that will mean the same thing to every party.

And creating rules so perfect that an artificial entity will know exactly how to enforce them sounds even more difficult. There’s so often a nuance, a slight difference in circumstance, that affects the situation.

The U.S. and British legal systems both have a concept of equity as well as one of law. Equity is a lot fuzzier, but it does give a court the right to decide that a situation is unfair. This concept exists because sometimes following the letter of the law does not give the just result.

I think Schroeder is on to something with the smart contracts. I also think our technology will eventually get so smart that it will become intelligent. But even if that level of artificial intelligence can do a better job of preventing dishonesty than we do now – which would be wonderful – I don’t think it’s going to solve the problems caused by different legitimate interpretations of the same sentence.

That is, it might improve contracts, but it’s not going to do away with lawsuits.

I told a lawyer friend that some science fiction writers were predicting the end of lawyers, and he observed: “Lawyers will become obsolete when people live according to the golden rule.”

Me, I bet we’ll still need lawyers even then. Near as I can tell from looking at the Wikipedia article on the golden rule,  people have different takes even on something as simple as do unto others as you would have others do unto you.