Does your law firm need to be in the metaverse?
Scratching your head at this question? Shuddering at the sight of the term “metaverse?”
The skepticism is understandable — the metaverse is an emerging phenomenon based on relatively new technologies such as blockchain and non-fungible tokens (NFTs).
But there still is a great deal of potential for businesses operating in the virtual reality known as the metaverse.
Some of us in the legal industry are starting to dip our toes into these waters, and as a legal professional, you should at least know the basics of this new landscape. Here we review some of these metaverse basics and the opportunities for law firms.
What is the metaverse?
The term metaverse originated in Neal Stephenson’s 1990s sci-fi novel “Snow Crash” about a virtual reality world.
Now, the term serves as shorthand for immersive digital worlds where users can come together and engage in communal activities such as socializing, attending meetings, and playing games.
Games such as Fortnite and Roblox are already considered to be metaverse experiences since they are online spaces that seek to create immersive environments. In 2021, Meta — the rebranded name for Facebook — announced it would be developing its own version of a metaverse.
The common future vision of the metaverse is a place where users control three-dimensional avatars (using virtual reality or augmented reality headsets) to move between online spaces and interact with other avatars. Users are expected to have the ability to participate in a wide array of activities — socializing, shopping, attending events, and even working in a virtual space.
NFTs and virtual land in the metaverse
Individuals and businesses have been investing their futures in the metaverse by buying “plots” of virtual land. Ownership of this virtual land is represented by non-fungible tokens (NFTs).
NFTs are based on blockchain technology in which transactions are recorded as “blocks” of data that cannot be changed. Blockchain has many uses including as the basis for cryptocurrency.
For NFTs in the metaverse, it is used to represent a unique digital asset serving as a form of “land deed” for the virtual space.
How is the metaverse related to web3?
Web3 is an emerging technology often conflated with the metaverse — web3 and the metaverse are related, but not the same.
The term web3 refers to a new type of internet-based service that is built on blockchains. While web1 was the internet of the 1990s and web2 was social media, web3 is intended to serve as the infrastructure for decentralized, community-run networks.
Web3 is widely considered a natural fit for the metaverse.
With web3 technology, you could potentially use cryptocurrency, shop for NFTs, and engage in other blockchain-based activities while in the metaverse. In this vision, even your metaverse avatar could be an NFT.
How do law firms participate?
Some law firms, both large and small, have recently bought “land” in the metaverse and set up offices there.
By utilizing metaverse platforms such as Decentraland and Sandbox, these firms hope to one day offer legal services to clients from these virtual offices.
Marketing in the metaverse
Many of these firms acting as “early adopters” in the metaverse are hoping to take advantage of new marketing opportunities.
Just as the legal industry is turning to more modern forms of marketing such as social media, the new Metaverse firms seek a competitive edge by getting in early.
The metaverse may also offer more options for client access.
The pandemic has already accelerated an ongoing industry shift to remote and hybrid work, with many clients having virtual meetings with their attorneys through Zoom or other remote platforms. The metaverse offers yet another way for firms to interact with clients remotely.
Metaverse and NFT-related legal matters
Another potential advantage for metaverse firms? They may have a leg up in handling metaverse-related legal matters.
There are many facets of the metaverse that could present legal issues, such as fraudulent transactions and invasion of privacy. Those firms with an existing stake in the metaverse would be well-positioned for the legal disputes that would likely arise.
This potential opportunity also extends to attorneys seeking to service the booming market for NFTs.
NFTs are used for far more than buying plots of virtual land — they can also be unique pieces of art or collectibles. The legal issues arising from these assets are similar to those for more traditional assets, including contracting, copyright infringement, and cybersecurity.
Many legal clients may be naturally drawn to firms with Metaverse presences to handle their NFT issues.
As far as the future for law firms in this space, it should be emphasized that much of the metaverse’s potential is still theoretical.
The metaverse and its underlying technology are still in the nascent stages, with no clear regulatory framework and largely operating under contract law. There are still many unknowns.
The move to the metaverse will likely be client-driven for many firms. If legal clients are doing business and thriving in the metaverse, they are more likely to want to also deal with their attorneys in that space.
And firms may even be able to store documents in the metaverse, possibly coded into the blockchain, in a way that provides more security than cloud-based platforms.
The risks and unknowns for law firms considering the metaverse are similar to those that once existed for web1 (the internet) and web2 (social media). The opportunities for law firms will likely evolve as the metaverse evolves.
What does this mean for your firm?
If you are considering a metaverse opening for your firm, the best approach is to move slowly and methodically.
Review the contractual terms and conditions of any metaverse world you are considering, and seek to understand the terms and technology. You will also want to ensure your firm’s metaverse presence appears professional and trustworthy.
The metaverse is an emerging tech landscape where both opportunity and risk abound. Do your research before your firm jumps in.