Rocket Lawyer’s Charley Moore is betting smart contracts can make the law available to the masses.
The online legal services firm has created a blockchain-based smart contract platform to make writing, verifying, and making payment on an agreement easy, affordable, and automatic. Think of it as an escrow account run by smart contracts.
The 10-year-old Internet company competes vigorously with the likes of LegalZoom and Nolo in giving small businesses and individuals a way to create simple legal documents online. It also works with about 300 corporations that provide the service as an employee benefit. Now Rocket Lawyer is turning to the blockchain to one-up its rivals. With its new Rocket Wallet, the company is adding an automated, trustless, and secure payment system to the offering.
“The immutability of blockchain is a gamechanger for the fundamental way law works,” Rocket Lawyer CEO Charley Moore told Modern Consensus. “It gives incredible benefits. We can bring more trust into legal transactions.”
Rocket Lawyer currently competes with LegalZoom and Nolo, offering do-it-yourself legal documents paired with online assistance from lawyers. In partnership with ConsenSys-backed start-up OpenLaw, it has created Rocket Wallet, an Ethereum-based smart contract payment platform that holds funds and makes payouts when a contract’s terms are met. The service will also provide verified identification without sharing more personally identifying information than is necessary with either party.
“There are lots of ways to pay online, but few can be put into contracts,” Moore said. “By tokenizing those payments, we can make them safer, we can make them more secure, and we can make it more affordable for folks. We think it’s going to change a lot of the way that people interact with one another. You can have self-executable terms and conditions, and you can have digital dispute resolution, which really hasn’t taken off and scaled. I think in large part [that’s] because there are really some missing components for an arbitrator to be able to grab hold of. We think we can solve those problems with our wallet and smart contracts.”
Moore gives the example of a very simple contract, the sale of car from one person to another.
“Karen wants to buy a car and Mike wants to sell a car,” said Moore. “So, they meet, they negotiate, they decide that Mike’s going to sell this car for $15,000. But importantly, Karen negotiates that she’s going to pay half now and half later,” after she gets the car and had some time to drive it and be certain it’s not a lemon.
A smart contract is created to ensure that the facts are clear and the terms unchangeably recorded on the blockchain. At that point, it is sent to Mike who can have a lawyer review it through a Rocket Lawyer—or outside—attorney before signing it, Moore added.
After the signing, each party creates a Rocket Wallet, which hold the funds until terms are met—converting them to stablecoins—and automatically transferring them at the times specified. This is where the trust created by the smart contract kicks in. Karen is required to pay the full $15,000 into a Rocket Wallet, Moore said. Mike can access half of it on delivery, and half after 15 days when Karen agrees that she is happy with the car. But she cannot remove the funds, either.
“This is something that everybody should do,” said Moore, whether they’re selling a car for a few thousand dollars or hiring a contractor to renovate their home for six figures.
“The problem we’re solving here is if you need to sue somebody for $7,500, good luck in America, in Great Britain and France, and other countries where we operate,” he said. “Good luck if somebody sues you for $50,000 or $100,000. With a legacy contract, you’re trusting in the government…to fix things if you get defrauded or don’t get paid. The problem is, it’s extraordinarily expensive and time consuming for the government to fix things for our everyday transactions. These self-executing smart contracts are an extraordinarily efficient dispute prevention mechanism.”
Rocket Wallet is currently in beta testing, in large part to ensure the user interface is as simple and easy to use as possible, Moore said, adding that a “delightful user interface” is very important to the company.