The Legal Wild West of Web3 – Lawyers’ Prospects in the Flourishing Metaverse Landscape

Legal Legacy Special Issue

For most businesses and industries, staying ahead of the curb and competitors largely relies on adopting novel solutions and taking advantage of profitable opportunities. Attorneys and law firms aren’t any different in this respect, implementing new technologies and software that help improve their operations and relying on online platforms and social media to reach potential clients.

With the recent development of virtual-reality platforms functioning in what has become known as the “metaverse,” many businesses have sought to establish their digital presence early on in a promising new landscape. Although granting encouraging prospects, the budding metaverse is also largely unregulated, providing opportunities and unforeseen challenges that law firms must attentively navigate.

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Taking Root in the Digital Realm

Also known as Web3, the metaverse is a virtual online medium that allows individuals to interact, socialize, play, and even purchase digital “real estate” on platforms like Decentraland, Sandbox, and Somnium Space. Accessing this medium requires virtual or augmented reality (VR/AR) headsets or lenses that enable users to experience the metaverse in an immersive fashion.

Noticing its promising potential, forward-looking players in the legal industry have sought to seize the opportunity and set up shop in the metaverse. The decentralized nature of smart contracts and blockchain transactions involving cryptocurrencies and non-fungible tokens (NFTs) doesn’t make them immune to litigation and can involve disputes ranging from intellectual ownership to digital asset property rights.

As fledgling metaverse platforms continue to grow, providing a more extensive range of services to an expanding user base, it’s not imprudent to assume that the limited regulations governing interactions in the virtual world will lead to unprecedented legal issues.

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Known and Unknown Challenges

While some tout the metaverse as a sign of the coming future, optimistically swept up in a wave of high-tech enthusiasm, such bold claims should always be taken with a grain of salt. For attorneys and law firms, the largely unregulated digital realm presents many challenges, including important questions regarding privacy and safety, how liability is attributed, the validity of virtual contracts and agreements, and a host of theoretical issues.

Users wearing fully-immersive VR/AR headsets to access dynamic metaverse platforms could lose sight and sound of their surroundings, potentially leading to minor or severe injuries. In such instances, the manufacturers’ and software producers’ liability may be brought into question by those who were harmed while using their devices. If such injuries were to occur in a professional environment where meetings are held via a VR/AR interface, it isn’t yet clear if or to what extent employers would be responsible.

Since metaverse platforms are still in their infancy, it’s not surprising that unscrupulous individuals will try to take advantage of their lacking privacy and safety features for nefarious reasons. In addition to issues stemming from the manipulation of online identities, fraud involving digital assets, and the safety of biometric data, lawyers may also have to contend with cases of bullying, stalking, or harassment in the metaverse causing real-life mental trauma, which may be harder to solve than those involving conventional online platforms.

On a different note, some law firms have proposed solutions allowing people to get married in the metaverse, including drafting digital prenuptial agreements. Such unions aren’t officially recognized and carry no legal weight. Consequentially, partners who tied the knot virtually and believed their unions were valid, similar to a Las Vegas drive-through wedding, may be surprised to find out that they weren’t legally married to begin with.

However, if legally married partners decide to divorce, the virtual world could become part of real-life legal proceedings. Separating spouses may be required to split up digital assets like NFTs, cryptocurrencies, and metaverse “properties.”

The Legal Industry’s Outlook in the Metaverse

Beyond the novelty of a dynamically-interactive virtual medium, it’s still too early to tell if, when, or how the metaverse will shape the future. For the moment, attorneys and law firms tread cautiously around litigation involving metaverse-adjacent issues due to the vague nature of regulations on contentious matters for which solutions aren’t clear-cut or haven’t been developed yet.

Although essentially the realm of speculation, potential issues that may arise from metaverse litigation can range from prudent questions concerning the future role of AI-based legal solutions and “algorithmic attorneys” to alimony and child support for virtual spouses and avatar-offspring, which edges more towards the fantasy realm at the moment. Still, the way the online medium shifts and evolves, we might see many outlandish things happen in the years to come, leaving room for new legislative endeavors.

While significant improvements will be required to bring the futuristic vision of the metaverse to reality, the law firms that have already established a foothold in the virtual world take full advantage of the opportunities these platforms currently provide.

Attorneys who got into the virtual game early on are the first to advertise their services in a growing and underexploited online medium, can host interactive gatherings and seminars, provide detailed information on specific questions, and schedule in-person meetings with individuals who are more comfortable discussing their issues in the neutral metaverse space.

Sean Cleary

Sean Cleary, Esq., serves as principal attorney and owner at The Law Offices of Sean M. Cleary in Miami, Florida. Mr. Cleary has a solid background in personal injury and family law.

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