Lawyers & the Metaverse

In a new Q&A interview, Thomson Reuters’ technologist and futurist Joseph Raczynski offers his insight about the Metaverse and how it will impact the legal industry 

In February this year, ArentFox Schiff announced that it had become the first major US law firm to “join the Metaverse” by acquiring a land site in Decentraland, a fact that underscored how seriously lawyers are taking one of the latest technology trends. Thomson Reuters’ technologist and futurist Joseph Raczynski talks about how the Metaverse will impact the legal space, and what lawyers should do to prepare.

Asian Legal Business: You’ve written previously about the Metaverse and the preparedness of lawyers. How widespread do you think the use of this will be in the near future, and how can lawyers make sure they are sufficiently prepared?

Joseph Raczynski: If by the near future we are saying three to five years, I would say 100% that the Metaverse will be used in various forms by the majority of the population in the industrialized world. It has already started. There are two forces at play that are enabling the Metaverse: One, blockchain, which is a unique way to store information in a provable, unalterable way. Second, the emerging hardware is key. When Apple releases its Virtual Reality (VR) or Mixed Reality (MR) headset in the coming year or so, it will force all of us to head into the Metaverse. Just for perspective, VR is fully immersive, while MR allows you to see the physical world and places digital imagery on top of that.

Joseph Raczynski of Thomson Reuters

I have likely spoken to thousands of lawyers over the last several years. They are extraordinarily bright, but with one limiting factor — their dedication to their craft. This means that they do not have the time to lift their heads to see what is coming. All these emerging technologies will impact their practices in some way, as well as the business of law. At a minimum, lawyers need the opportunity to focus on the big four: AI, blockchain, workflow, and the grab bag of general emerging technology. There are a multitude of places to learn about these things, but I would include some of the classics such as Google Alerts, Twitter threads on these topics, and magazines like Wired, which should be a staple for everyone.

Asian Legal Business: What kind of opportunities could the Metaverse bring to lawyers?

Joseph Raczynski: Imagine a world, much like what we have now, but only digital. It is nearly as immersive and interactive. Then, extrapolate all the problems, issues, benefits, and challenges we have currently in real life, and think about where lawyers play a role. It will be similar. In the beginning, much of the involvement of lawyers will be around intellectual property (IP) issues and copyright.

Soon thereafter, insurance and contractual disagreements will ensue, but these contract issues could be interesting because of the nature of the platform a Metaverse will be built upon. Since it should rely on blockchain and smart contracts, these disputes could likely be easier to solve at a lower tier, leaving lawyers to resolve more complex issues.

Asian Legal Business: How does our engagement with digital worlds and environments shape the way we work and the kind of work we carry out?

Joseph Raczynski: If we presume that we are moving increasingly into a digital world, then every nuance surrounding that space will become increasingly important. Start with artificial intelligence (AI). Algorithms will increasingly be able to make decisions for us. Yes, this includes much of the legal work out there. These algos start off simply, but will become far more complex, freeing us from some decisions or work.

Stack on top of that blockchain, which is trustless (as in, you don’t have to trust a third-party) database, meaning both AI and blockchain can work in tandem to begin doing some pretty impressive workflows that are automated. When we move into the Metaverse for both fun and business, everything can be quantified, e.g. a house, shoes, art, tickets to a concert, via a non-fungible token (NFT) which uses a blockchain. Processes will increasingly be leveraging data and AI to make decisions which will rely less on human intervention.

I know this can sound frightening, and it could be — which is why as this progresses, we need the best legal minds to understand the implications, yet keep a progressive mindset to guide the path forward. We do not merely wish to replicate everything we have in the real world, but try to evolve it to the best we humanly can.

This interview was written by Elizabeth Beattie, a Hong Kong-based journalist at Thomson Reuters, and originally published in Thomson Reuters Asian Legal Business.

Tech Snippets Today – Animoca Brands – Robby Yung, CEO

I met with Robby Yung, CEO of Animoca Brands, virtually. This is one of the largest and most progressive Web3 companies around. They have a huge number of investments and projects they are involved with. We get into a host of different topics including where the company is headed, what they are involved with, the future state of Play to Earn, recent issues in the crypto DeFi space, and the future of blockchain gaming.

Forum: The LawFirmDAO offers bold predictions of future firm partnerships

Originally published in Forum Magazine

By Joseph Raczynski

Could decentralized autonomous organizations (DAOs) revolutionize how law firm partnerships are going to be structured in the near future?

Imagine a fully decentralized law firm. What might that look like? What if every attorney who opted in became a partner from Day 1, equitably sharing the benefits and firm profits? Gone is the elongated timeline to reach ownership, prestige and profit potential. Further, what if I said this could be built now with computer code that provided full transparency into rules, roles, profit sharing, voting, governance, and that even creates a sense of clarity and community – all out of the box?

Welcome to LawFirmDAO, a hypothetical but now feasible entity created within a decentralized autonomous organization (DAO).

Mind you, I know of no one who has written or talked about this, but this LawFirmDAO concept is something that could be the future of law firm structure. The reason? The lack of transparency within some law firms on occasion has been their undoing. Howrey and LeClairRyan both were victims of a few partners making decisions sometimes in a vacuum, without a wider participation of the firm’s attorneys; this ended up costing the firms dearly.

For some perspective, let’s unpack the essence of what a DAO means. DAOs are essentially entities built on code, leveraging smart contracts and tokens that permit token holders (attorneys) to vote on decisions the organization (the law firm) is considering. Fundamentally, a DAO is a blockchain structure – think of it as a safe database – that anyone can leverage to self-govern through participation. The entity is authored by rules that are baked into the code, permitting voting through digital tokens, sort of like cryptocurrency – all while leveraging smart contracts.

So, what does this mean? A DAO is a newer governance structure that humans (for now) are creating, which has a stated purpose and a plan to execute decisions via code. Let’s explore how this would work for LawFirmDAO.

Decision-making and profit-taking in LawFirmDAO

As a component of Web3, the next generation of asset tokenization, DAOs create a structure of governance. (Currently, most of the successful DAOs are built on the Ethereum blockchain.) Participants are essential to this structure, and they are directly linked to that organization in a verifiable and provable way.

This is accomplished via a digital wallet, linked to a blockchain that contains your assets, money, non-fungible tokens (NFTs), deeds and your DAO tokens – the latter proving you are a part of that organization. Think of it as your digital identity card to partake in the governance of the DAO. Each attorney would have a wallet with the LawFirmDAO tokens inside permitting them to connect to the DAO, create proposals and vote. The intent is to move away from a top-down model, and inherently a DAO structure enables this.

A well-written DAO drives community, fostering the creation of guilds within it to create new opportunities; the DAO then rewards people based on their individual participation.

In this vision of LawFirmDAO, a founder, for the purpose of creation, sets forth a plan to create the firm with all the typical rules of governance, but in full transparency and outlined in code, which is stored on a blockchain. After its creation, the founder withdraws as the leader to be an equal partner with all other participants, i.e., attorneys. The DAO is created, and tokens (shares) are issued. Prospective attorneys coming on board interact with the code via a friendly app or website, connecting in a digital wallet.

Compensation and work matters could be doled out simply as well. For example, attorneys could choose Option A and be rewarded for every client they bring in at 80% of those fees; or Option B and they are rewarded 10% of client fees because they did not bring in the client but worked the matter. In this way, attorneys could shift from one type of work matter to another by choice, simply by reassigning themselves and the code verifying it’s acceptable. Virtually every nuance of a firm governance structure could be pushed into this paradigm via code, verifiable via the blockchain.

Profits for the equity partners would be calculated by fees and automatically generated with their direct success via smart contracts. Rewarding structures are innumerable. Proposals from anyone in the LawFirmDAO would be offered via an online voting mechanism, verifying the person by their token in the DAO, and allowing them to put something to a vote – such as the creation of a new practice area in the next week, opening an office in Lagos or voting to change the profit structure. In this way, a DAO offers full transparency, equity, innovation, incentives, all of which are auditable and viewable in code. No one group or individual is dictating the direction, rather it is a verifiable way to be inclusive and egalitarian in its authorship and action – again, all via code.

An additional advantage to a DAO is the incentivized benefits aligned to the structure created within it. A well-written DAO drives community, fostering the creation of guilds within it to create new opportunities; the DAO then rewards people based on their individual participation. While a guild harkens back to the age of people forming groups of like-minded and skilled individuals, attorneys can do the same inside their LawFirmDAO. As a flat organization, everyone can propose ideas for vote, and if selected, chosen for action.

Legal DAO generator

Separate from this new partnership model created with a DAO, we will likely see DAOs created by law firms for their clients, which would allow for a coupling of current legal tech tools and blockchain. Issuance of a DAO could be done through an application like a contract automation tool; and for any company that wanted to create a DAO, the law firm would populate all applicable parameters – the name of the company and the token, number of tokens available, etc. – and then the firm could create the DAO, and, if necessary, file the business license with the appropriate state. (At the moment, only Wyoming has created laws around DAOs.)

Once this DAO has been created, another connected piece would be the voting mechanism. In this world, DAO participants would leverage their Web3 wallet to connect into the proposal and voting site. Once on the site, members would be able to vote on current ideas or propose actionable matters themselves. Each of these actions is stored on a blockchain that is inherently provable and verifiable.

The LawFirmDAO could be the future direction of equitable, democratic, transparent law firms that all parties can buy into through a Web3 DAO token. The fostering of community and innovation that this structure will birth could be transformative.

Tech Snippets Today – New Series Release!

As a way to encapsulate my travels and meetings with ridiculously accomplished and fascinating people from around the world, I am releasing a new series called Tech Snippets Today. These are informal conversations with some of the brightest minds across the world pushing the limits on emerging tech.

On a normal day, before major conferences, I get about 30 requests a day to meet and talk. In the past I have discrete conversations with individuals and have done write-ups, or taken copious notes for later ideation sessions. These are often too good for me alone to enjoy. To that end, going forward new conversations will be recorded with some of these people, businesses, and stories that I have found to be the most intriguing in technology today.

Enjoy the chats as they come, interspersed with normal blogging here at JoeTechnologist and often mirrored at Thomson Reuters.

I am looking forward to this, with some very cool interviews coming… one quick teaser. The grand master chess player who lost to IBM Deep Blue AI back in 1996… is in the editing queue right now.

If you have any comments, feel free to reach out!

Animated Series: What’s Up with the Metaverse

Originally published on the ABA Center for Innovation, Innovation and You

by Joseph Raczynski with creative by Elise Harmening, Esq.

What’s Up with the Metaverse, was written by Joseph Raczynski of Thomson Reuters, a member of the Governing Council for the Center for Innovation, and created by Elise Harmening, Esq., Project Specialist Manager at the Center for Innovation.