By: Matthew C. Welnicki, Esq. and Michael P. Dickman, Esq.
As commerce extends in the metaverse, the legal profession will need to keep pace. Lawyers and firms have already established a presence in these virtual worlds. Time will tell whether this proves to be a viable platform for legal engagements or simply a marketing tool. But companies that choose to test the waters and engage counsel in the metaverse should be mindful of certain issues. Lawyers and firms must too.
Regarding the formation of the attorney-client relationship, the focus remains whether both sides agree to the relationship. But there are important details to consider, such as the scope of the representation, rates, and dispute resolution provisions. It is possible a smart contract memorializes a relationship; the retainer and fees might be paid in value-fluctuating cryptocurrency. Blockchain technology might be used. Companies and their legal departments must become familiar with such technology and ensure that attorneys they hire virtually are equally well-versed. What might be an effective tool to connect lawyers and clients might not be the best vehicle for formalizing the relationship.
Companies must also be mindful about communications. Virtual and electronic communications can take many forms. Not all are secure. Questions might arise whether DMs, chats, and other informal methods of communication will be protected. The medium’s security and the parties’ reasonable privacy expectations must be considered. It is not just the protection of the attorney-client privilege that is at issue, but also the preservation of communications and information that clients and attorneys share.
People’s expectations and understanding can be different when they are navigating a virtual world. Therefore, businesses (and attorneys) might want to consider supplementing their metaverse interactions with face-to-face meetings and traditional forms of communications. The terms of the relationship should be clear and well-documented. Even if the attorney and client meet in the metaverse, it might be best to then move to the real world to establish the relationship and its parameters. The metaverse would still be there as another tool. Most importantly, both sides must understand and appreciate the technology they are using. That technology has limitations and is consistently evolving.
Even without a “Metaverse Rules of Professional Conduct,” there are places to look for guidance if a virtual legal relationship breaks down. The ABA Model Rules, for example, address multi-jurisdictional practices, formation and scope of the relationship, and confidentiality. (Rules 5.5, 1.2, 1.6.) There are also broad catch-all provisions to ensure that the intent is not lost due to a lack of specificity. (E.g. Rule 8.4) Legislatures have shown their willingness to promote the execution of contracts through electronic means. (E.g., Uniform Electronic Transactions Act.) And, courts are not unfamiliar with disputes whether electronic communications are privileged. See, e.g., In re Asia Global Crossing, Inc., 322 B.R. 247 (Bankr. S.D.N.Y. 2005). The biggest challenge might be determining the best jurisdiction and forum in which to seek help.
The metaverse is an intriguing environment in which business can engage in commerce and interact with outside counsel. At the same time, businesses should not jump into these virtual worlds with their counsel without considering all of the traditional issues in this new context. Just remember, social media was once a new concept too.
This alert is for informational purposes only and may be considered advertising. It does not constitute the rendering of legal, tax or professional advice or services. You should seek specific detailed legal advice prior to taking any definitive actions.