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Feature

The metaverse, the law and the future

Six months ago, Mark Zuckerberg announced that social media giant Facebook was rebranding as Meta and detailed the tech company’s expansion and investment into the “metaverse”. Still a foreign concept to many, the metaverse may transform the nature of legal service delivery in years to come.
   BY JEROME DORAISAMY

What is the ‘metaverse’?
According to Annie Haggar – the strategic partnerships global legal lead at Accenture and winner of the General Counsel of the Year category at the 2021 Australian Law Awards – asking what is the metaverse is akin to asking what the Internet is back in 1983.

When technology is first evolving, she explained, it is hard to define what it will become. We can imagine the possibilities, she noted, but cannot quite articulate how something will turn out.

What we do know thus far, Salerno Law corporate and fintech associate Krish Gosai proclaimed, is that the metaverse is the next evolution of the internet, as part of a shift from Web 2.0 to Web 3.0. It is, he said, a “network of virtual spaces accessed via the internet that aims to merge physical reality with the digital ecosystem”.

Put another way, LexisNexis Legal & Professional managing director (Pacific) Greg Dickason suggested, we can think of it as a “3D Facebook where you can move around and interact with others across multiple worlds”, with commerce being logged on a blockchain.

Metaverses vary in nature, Mr Gosai outlined, and “can range from a simple gaming environment to an independent virtual economy, consisting of its own digital currency, real estate ecosystem and workforce, where one can earn a living”.

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Why lawyers should care

Lawyers should start paying attention to this new medium, Ms Haggar stressed, because – like the internet – it will fundamentally change the way that lawyers work, play, travel, socialise, conduct business, and learn.

“As with all new technology, its impact on the world has an impact on the law because it has an impact on society. The law is usually slow to catch up, and there will be, perhaps a long period, where the legal profession has to grapple with the impact of the metaverse on clients and legal issues before there are clear rules, laws, and precedent to follow,” she said.

The metaverse doesn’t stand on its own, Ms Haggar noted.

“The legal profession needs to not only consider the impact of the virtual worlds that are being created, but [also] the explosion of technology – robotics, artificial intelligence, analytics, automation – and the way that people are using them. The law itself will take some time to catch up, but the impacts are here and now, as is the potential,” she said.

On a more practical level, lawyers will have to familiarise themselves with the intricacies of the metaverse, Mr Dickason outlined, due to the “contentious issues of IP ownership (who owns the visual representation of Buckingham Palace in a virtual London?); current concerns with data and who owns user data; jurisdictional considerations of which jurisdiction a transaction has occurred in, when users are in the virtual world; and who are the parties in a transaction if some of or all of them are automated/smart contract-based?”

All of this, Mr Gosai surmised, should be seen as an opportunity by lawyers to capitalise on the new medium to rethink the nature and delivery of legal services.

“The legal profession needs to not only consider the impact of the virtual worlds that are being created, but [also] the explosion of technology – robotics, artificial intelligence, analytics, automation – and the way that people are using them. The law itself will take some time to catch up, but the impacts are here and now, as is the potential.”

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Changing nature of legal service delivery

The metaverse, Mr Gosai said, will allow the professional services marketplace to provide decentralised and collaborative opportunities while giving scope for innovation on existing workplace practices.

Fundamentally, he explained, “the use of augmented or virtual reality technologies in a metaverse can serve as an integral aspect of revolutionising the delivery of professional services, especially as a means of interacting with both colleagues and clients. The metaverse also provides opportunities to transform how professional services market to prospective clients.”

“This could be through promotional branding (i.e. buying virtual land or marketing billboards within the metaverse) or leveraging use of VR/AR technology for clients to interact with marketing materials (which could include the use of NFTs outlining specific expertise),” he noted.

Moreover, Ms Haggar said in support, companies are building their own “worlds” for employees to interact, meet and share ideas with clients.

“Meetings are being conducted in these worlds and are allowing people to be ‘together’ and collaborate in ways that go far beyond the possibilities of video conferencing. There are huge opportunities presented by building a ‘digital twin’ of a business: it allows you to build and try changes, without interrupting the business,” she outlined.

“You can have engineers, designers, and other professionals working together from other sides of the globe on ‘real-world’ environments using augmented or mixed reality.”

Legal service delivery will be impacted, Ms Haggar went on, from in-house lawyers whose businesses are now building their own worlds in the metaverse, or who are building a ‘digital twin’ of their systems, to private practice lawyers, advising on these new worlds.

Lawyers will need to understand, she stressed, how these worlds operate and interact with the “real world”, so that they can advise on the issues that will arise.

“Instead of interacting with clients via email, or via voice or video call, you can conduct your client meetings in your client’s virtual office, or invite them to your firm’s virtual world. Courts could move into virtual courtrooms, and arbitration and mediation, into virtual conference and meeting spaces,” she suggested.

Opportunities for legal professionals

The metaverse has the potential, Mr Dickason proclaimed, to completely change the way we interact and transact.

“Imagine a world in which our verbal interactions can be captured as contract and then executed, where property transfers and payments are synchronous and settlement is instant, and where the past can be replayed in the event of a dispute,” he mused.

“We are a long way from this world, but a glimpse of it is evident in the ways in which DeFi is implemented on blockchains such as Ethereum or Solana. For lawyers, this opens up whole new practice areas in digital law and the use of smart contracts.”

It will also, Mr Gosai added, reduce many global barriers faced by individuals and businesses.

“As globalisation increases, the metaverse provides an opportunity for legal professionals to assist those participating in the metaverse with issues that may arise. At present, these issues currently relate to the legal and regulatory environment relating to the metaverse and associated goods and services,” he said.

“The breadth of legal areas to be covered are extensive and commonly include the legal nature and intellectual property rights of NFTs, digital identity, governance and decentralised autonomous organisations, data protection and privacy, artificial intelligence and commercial law.”

Every area of legal practice is set to be impacted by the metaverse, Ms Haggar surmised, with many already seeing such influence.

“People are ‘buying real estate’ in the metaverse, conducting commerce using new currencies. They are performing operations using augmented reality and robotics. They are learning, creating and building in the metaverse,” she said.

“These activities each has their own area of law – and are there as an opportunity for lawyers to support and guide their clients in their use. Or, you could simply embrace the basics – get your firm using the virtual worlds to meet colleagues and clients from anywhere in the world.

“Pretty soon, it will feel as normal as Zoom.”

There is also, Ms Haggar continued, a window of opportunity to train the next generation of lawyers in newer, non-traditional ways to offset those clients who don’t want to pay for the development, training and learning time of those new practitioners.

“Many young lawyers are leaving the law because it doesn’t allow them the flexibility, creativity or engagement they were hoping for in a career. With the possibilities of the metaverse, these lawyers can be leaders for your firm in adapting XR into your practice,” she argued.

“They can do their training in the metaverse, starting at law school in ‘virtual courts’, through to practising client conversations in virtual training worlds. Then, instead of simply using them for the repetitive traditionally ‘junior’ tasks, young lawyers should be challenged to think about how technology could be used in the practice to drive efficiencies, reduce errors, increase client satisfaction and experience.”

“Imagine a world in which our verbal interactions can be captured as contract and then executed, where property transfers and payments are synchronous and settlement is instant, and where the past can be replayed in the event of a dispute.”

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Hurdles for lawyers to overcome

The key issue and challenge, Mr Dickason identified, will be how the legal system keeps up with metaverse concepts and innovation.

“As with blockchain and indeed the internet, our legal system tends to lag behind on the key issues that arise. Lawyers in this space will need to learn rapidly about the new technologies and ways in which users interact and be able to link concepts back to core legal foundations such as property rights,” he noted.

“The law will catch up and evolve, but lawyers will need to span the gap until it does.”

Such a lag, Mr Gosai worried, could result in certain regulatory environments.

“At the forefront, cyber and technology, intellectual property, financial services and general commercial law are among the main areas of consideration that lawyers will need to address. With most innovative technologies, consumer protection will often be at the forefront of the minds of regulators,” he detailed.

“The development of the metaverse will provide lawyers with the opportunity to influence new legislative changes, especially around the concept of regulating conduct, ownership of assets, licensing, copyright and the interaction between physical and virtual worlds.”

Another potential issue for lawyers to grapple with, Ms Haggar pointed out, is how criminal misconduct will be handled.

“Once you put your avatar into a virtual world, there opens up a capacity for physical interaction inside that world – and, so, it also opens up the capacity for assault. How would you deal with allegations of assault by another person’s avatar? And what are the implications if the two avatars are workplace colleagues, interacting in a work-provided world?” she said.


“The law will catch up and evolve, but lawyers will need to span the gap until it does.”

Excitement on the horizon

Whilst there are indeed (legal, moral and practical) kinks to iron out, looking ahead, Mr Dickason is eagerly anticipating how the metaverse and its myriad possibilities will unlock how we interact with each other, including how we do business, realise our potential, or simply have fun.

“Legal practice and how law firms use the technology of the metaverse for internal operations has to change (think how Teams/Zoom has changed how remote work is viewed), as well as external interactions. There is a lot we don’t know about how the metaverse will evolve, but what I am sure of is [that] innovators will create novel solutions that will inspire us,” he said.

LexisNexis, he added, is readying for such change.

“We are building out a digital-law module as part of our practical guidance offering, including a deep dive on how digital ownership works and what NFTs are,” he noted.

“This will provide the foundation for understanding how the metaverse works and the legal issues to consider. We see this as a key space where we can help our customers stay abreast of the latest global trends and solutions.”

For a practitioner like Mr Gosai, what is most exciting is the “endless” options for innovation and disruption, along with the “potential for a systemic and cultural shift that only happens once in a lifetime”.

“The space is rife with uncertainties, which provides tremendous opportunities to be at the forefront of,” he concluded.

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