Smart contracts can't replace law as we know it, for few simple reasons:
- law is much more complex than few lines of contract code. You have extremely complicated system of rules and exceptions, that has developed over centuries, and the development somehow covers "what the society consider right". It is not in human power to implement it into code. Even simple stuff, like speeding tickets, have so many cases and exceptions making it nearly impossible to implement.
- the law is live and flexible system. Whatever you have implemented yesterday might be considered wrong (and possibly illegal) today.
- the contracts have no way to solve peaceful settlement of a conflict, as it can be another exception to any of the rules implemented. You will be surprised, but most conflicts are solved by such kind of settlements. Are there two companies, buyer and supplier, in disagreement whether to accept the project and release the vested funds to the supplier as not all the acceptance criteria have been formally met? Well, in 99% of such cases, one call between senior managers will settle the conflict, despite the smart contract terms are not met.
Maybe, one day in distant future, the AI will be able to overcame these obstacles, but not yet my friend, not yet. Enforcing anything by smart contract is something that simple makes no sense in most cases (except you are playing a weird cat game :-)) when you are doing serious business - simply because you WANT to have the flexibility, that the rigid smart contract rules won't give you.
RE: Smart Contracts Are Taking Over Functions of Lawyers: Expert Blog