Attorney-Client Relationships in the Metaverse

By MATTHEW C. WELNICKI AND MICHAEL P. DICKMAN

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 law firms must be mindful as well.

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 for a smart contract to memorialize 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 at issue but also the preservation of communications and information that clients and attorneys share.

Even without a “Metaverse Rules of Professional Conduct,” there are places to look for guidance if a virtual legal relationship breaks down.

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 American Bar Association ModelRules, for example, address multi-jurisdictional practices, formation and scope of the relationship, and confidentiality (Rules 5.5, 1.2 and 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, and courts are not unfamiliar with disputes about whether electronic communications are privileged. 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 and their counsel should not jump into these virtual worlds without considering all the traditional issues in this new context. Remember, social media was once a new concept too.

Matthew C. Welnicki is a partner at Kenney & Sams, P.C. He is a member of its business litigation team and represents clients before and during litigation, on appeal and through sensitive investigations. mcwelnicki@KSlegal.com

Michael P. Dickman is a litigator and counselor at Kenney & Sams, P.C. He focuses his practice on business, construction and insurance disputes. mpdickman@KSlegal.com