Our Most Impactful Cases: Metaverse & Cybersecurity Law

All right, everybody, welcome to the Overruled podcast brought to you by Scott Vicknair Law Firm. A great day here in New Orleans. Good to be with you, Brad. We have some great topics and discussion for you today. My topic, I’m going to jump right into it, and it is about this article I read in Entrepreneur magazine. We talked about that a couple of shows ago with Johnny. He hates the word entrepreneur. But this Entrepreneur magazine article is titled “R.I.P. Metaverse.” And I immediately was drawn to it because I hate the metaverse. The metaverse, to me, when this came out and Facebook went all in, Mark Zuckerberg jumped on the bandwagon and changed Facebook’s name to Met, Meta. It was just absurd to me from the start. I cannot have hated it ever since. And the idea, I’ve read articles back then. It was like these celebrities going in and they were buying land in the metaverse.

So, what is the metaverse? Give us, give our listeners a little background here. Let me wind myself down a little bit. I’m a little, I’m a German. Vicknair’s germinates. I’m a little hot-blooded on here and there. This is a trigger for you. I like this. It is a trigger. And the concept was that metaverse was the future. And no longer would we be impeded by living in our human existence. But you put these goggles on, and you and I, for example, like we’re here on the show today and we’re talking and we’re in person, we could be in the metaverse. We would put our VR on, the goggles on, and we would be doing the show in this virtual world where there was different things. You would buy land in the metaverse, there would be businesses in the metaverse, and that this was this virtual reality and that was going to be sort of the future of, of tech.

In fact, Entrepreneur magazine’s article here, I’m going to walk through it called “The Once Buzzy Technology That Promised to Allow Users to Hang Out Awkwardly in a Disorienting Video Game-Like World Has Died After Being Abandoned by the Business World. It Was Three Years Old.” So you can see they may be hated the metaverse just as much as I did. But it was such an investment by Facebook that not only did Facebook invest, a significant amount of capital into it. Mark Zuckerberg, the founder of Facebook, literally changed the name of Facebook. So Facebook’s no longer Facebook. It is now Meta. The stock ticker when you, or watching, if you watch the NBC in the morning like I do and you’re watching them talk about stocks and what’s going on in the Dow or anything like that, then you’re going to see Meta. It’s not, it’s not Facebook anymore.

This article essentially said that it is now headed to tech industries, quote, graveyard of failed ideas. But the short life and the ignominious death of the metaverse offers a glaring indictment of the tech industry that birthed it. And that’s what really caught my attention. Because the article wasn’t just focused on its and my hatred of the metaverse and the entire concept of it, but it actually went through a pretty detailed discussion of this promise that Zuckerberg made to everybody in the tech and business world that it was going to be the future of the internet. For example, when it was first introduced, the media, the article mentions how the media swooned over this concept. The Verge published an early 5,000 word long interview with Zuckerberg, immediately following this announcement, in which the writer called it an expansive, immersive vision of the internet.

The cheerleaders. Oh yeah. Glowing profiles followed. CBS host Gayle King jumped on with Zuckerberg and did a cartoon avatar experiment within the metaverse. See, this is completely foreign to me. I never went down that rabbit hole. Oh, it was coming and it was, it’s been going on for three years and when it started, this was what fascinated me for discussion point. It’s like, I’m going to run through what this article kind of detailed of how many people went all in on this. So Microsoft, Microsoft, huge company, one of the foundational organizations in our economy. The CEO, Satya Nadella, would say at the company’s 2021 Ignite conference that he couldn’t, quote, overstate how much of a breakthrough, end quote, the metaverse was for his company, the industry and the world.

Also, Roblox, an online game platform that has been open since 2004, rode the metaverse hype wave into an initial public offering in a $41 billion valuation. And this article next goes on to my next thing I’d like to attack. The cryptocurrency industry. Of course, they took the ball and ran with it. The people behind board, ape, yacht club, NFT company, con the press and believing that uploading someone’s digital monkey pictures into VR would be the key to, quote, master the universe. I’ve seen these things with these artworks and stuff and stuff they sell. I haven’t gotten into it, but this is all part of that same stuff, I assume. Yeah, and so that’s a big thing is you had all these huge foundational companies, different glitchy sectors of the economy buying into the metaverse and, of course, as this article goes to attack.

Now, Wall Street. Wall Street’s companies, their investors and consultants and analysts couldn’t stop themselves from getting involved. In fact, the consulting firm Gartner, back at the time, 2020, 2021 claimed that 25% of people would spend at least one hour a day in the metaverse by 2026. That was the prediction, two years ago. And the global consulting firm McKinsey predicted that the metaverse was going to generate up to $5 trillion in value, adding that around 95% of business leaders expected it to positively impact that industry within five to 10 years. Not to be outdone, City, another foundational consulting firm and company on Wall Street, put out a massive report that declared the metaverse would be a $13 trillion, trillion with a T, $13 trillion dollar opportunity.

Okay. And now we get to the fall of the metaverse. Three short years later. And much of this article is focused on how a topic we’ve talked a lot about here, ChatGPT, killed Zuckerberg’s obsession, as the theme of this article. As the economy slowed and the hype around generative AI grew, we had a major shift in economic forecast. Microsoft shuttered its virtual workspace platform, AltspaceVR, in January of ’23, laid off 100 employees who were working on their industrial metaverse team, made a series of cuts to its HoloLens team. Disney, who also had jumped in the metaverse bandwagon, not surprised, shuttered its metaverse division in March. And Walmart. Can you believe Walmart was going to get into the meta action? They also followed suit and they ended their Roblox-based metaverse projects. Billions and billions of dollars that foundational companies across the economy have invested in this and are now they’re now all pulling out. All of it’s a joke.

Unfortunately, I’d say it flippantly, but we’re also talking about thousands of people whose jobs have been lost, who were based upon these metaverse parts of their companies. And that brings us back to, oh, Mark Zuckerberg. And what is Facebook now doing with Meta? Well, it’s been officially, as this article calls it, pulled off life support. When it became clear that Zuckerberg and the company launched the craze had moved on to greener financial pastures. Just a month ago, in March, Zuckerberg declared that Meta’s single largest investment is advancing AI and building it into every one of our products. So he has declared a month ago that now their chief focus is going to be AI technology. Their chief technology officer, Andrew Bosworth, told CNBC in April that he, along with Zuckerberg and the company’s chief product officer, Chris Cox, were now spending most of their time on AI. Meta is now spending most of their time on AI technology. If we’re for another name change?

The company has even stopped pitching the metaverse to its advertisers, despite spending more than, get ready for this, how much Facebook and Meta has spent on it? $100 billion dollars in research and development on its mission to be Metaverse First. $100 billion dollars. With a B. I’m just going to leave the silence for a second. Let that hit. Wait, there’s more. Well, and I think my big takeaway from this discussion besides that I hope everybody understands that I cannot stand the metaverse and hate the metaverse was, I didn’t like from the get go that it just didn’t make sense. And it wasn’t that I was adverse to change or a new concept or anything. I mean, I think we’re all talking, we’re talking about how to integrate ChatGPT in our law firm. So it’s like we’re not adverse to change, we love change here. We love talking about change and new concepts and things.

It just didn’t make any sense. And I didn’t, it’s kind of like that old lesson, I always like, I know you like Warren Buffett. I talk about him all the time. Everybody rushing to this new concept. New shiny object. And just stupid money flying into new shiny objects like the metaverse. And we’ve watched the tech industry, we’ve watched certain companies with like, that we probably have stock investments in, a lot of our listeners do, Microsoft, Walmart, like just foundational companies, throw billions and billions of dollars into something that is just going to funnel away to nothing. And I guess you can get the other side of that, some people would say, well, you have to invest in certain things that maybe they don’t work out. But I just think to me, it was an adage of that lifelong lesson that the new shiny object is not necessarily a good idea.

Yeah. And look, I do a lot of investing and I’ve followed stocks and stuff for a long time. But what I’ve seen over the last decade or so, this fear of missing out, you know, people see things, and, you know, stock prices going start going up. You know, when the meta thing came out, I know a lot of these stocks got a bump in their stock price just by mentioning the word meta in them. You’re actually, it’s interesting you bring that up. I saw in an article just this week, this same thing’s happening with AI technology. All these companies that are mentioning AI in any shape or form, they’re getting a bump in their stock price. And when you start seeing that happen, people automatically attribute that this is a good idea because money is flowing into it. And the next company says, well, we can’t sit by the side here and watch what’s going on, we have to jump in and do something with it.

So even if it’s a bad idea, the momentum that gets moving on these things, people have that fear of missing out, these companies experience the same thing, we do, because they have shareholders they have to report to. Then everybody’s piling in, and then you get too deep into it, and what do you do? You have to kind of write it out until the thing dies. Right. And this is, just because a bunch of money gets flying at something or everybody says, doesn’t mean it’s a good idea. And it’s not that I’m, I have a different perspective on ChatGPT and I think it will have some integrations into our company, but I also don’t know that I believe ChatGPT is going to change the economy, for example, like the internet did. Okay? So, there, I mean, I, it’s, I’m always a skeptical person. And, and kind of a skeptical like, if everybody’s running to something, if everybody’s throwing money into it, I’m like a skeptic that, like, Be cautious.

Yeah, be cautious because I’m, I’m just once again, that old adage, watch Warren Buffett at his, in Trolling Munger, answer questions two weeks ago at their weekly, at their yearly conference and it says, nobody knows what the future is going to hold. Nobody knows what everybody’s selling you on what the economy is going to hold. They don’t know the answers. And so when everybody’s running into the thing, it doesn’t necessarily mean it’s the right thing.

Yeah. Okay. Before we jump over to your topic, Brad, new segment. New segment. All right. So the question of the day, today is from one of our listeners in New Orleans, Johnson. What is the most impactful case that we each of us has handled? Brad, I’m going to let you take it first. That’s a tough one. For me, I think it’s kind of one that’s been the most memorable case for me. And it was a very small matter, but, I do estate planning for people. We got called out to go, and I do house calls, for people sometimes. It was a elderly man and on the West Bank that needed his will and everything done. We go out there to take care of that for him, draft that for him. And we sit down and I had the most interesting conversation with this person. This is 15 years ago, this sticks with me today.

He was actually a World War II veteran. And he was actually in Pearl Harbor when it was bombed. Just so happened, he had snuck off to a little area on a cliff somewhere to meet a girl when all this happened. And he had a first-hand account of watching the bombing take place and seeing his shipmates and everything that was going on. And just the perspective that he had of this, you know, this tragedy in our, in our history. And him describing that, we sat there for hours talking to him. And to this day, I remember that consultation and making his documents and just remember the, you know, the look on his face and it made me, made me proud to be, you know, an American and what happened and just, it really got me when I went to Hawaii and I saw Pearl Harbor, it gave me a completely different perspective on it. So it’s one of those things that it was somebody I met through a case, but will never forget him and his story.

That’s incredible. What a story. It’s good to know you do house calls, not to make light of his story, but the next time I want to say someone, Uber Eats, I’ll have you bring me some, Mexican food. Yes, absolutely. Yep. All right. Jumping into mine, I guess I would say so we had a case that you had some involvement in, families, pipe burst under their, Ah, yes. Under their house. And it was heavily litigated and Houma and Terrebonne Parish for probably six years. And it was just a case that had a little bit of everything, as you remember. It had multiple defendants, had expert fights. It had all the stuff that had kind of really taught me to be a lawyer. And so for me, it was, it was something that a case I’ll never forget about because it was a family, a husband, his wife, and their little daughter, who trusted me as a much younger lawyer. And I really learned everything about litigation from that case.

And just wonderful people. And we had a great result for them against the insurance company and some of the contractors for what happened at their house. And they’re in a new house now and they had a great result. And they still send Christmas cards and Christmas gift every year. And they’re just wonderful people. And I’ll never forget that case and those people. It had a huge impact. They become extended family for us. No question. I never, I won’t even forget where I was when the case finally settled after we picked a jury. I know where I was. I remember the phone call, like calling them to thank them for trusting me while I was having a glass of wine. And it was just an incredible experience. I’ll never forget about it. It was a really good case. Really good family with good result for them.

All right. Your topic of the day, what do you got for us, Brad? Well, let’s get back to dooming and glooming. All right. My topic this week is a cybersecurity. Before you all tune out, let me give you a statistic. Especially if you’re a small business owner out there. And this is what started me down this rabbit hole this week. I saw a statistic that says that a business falls victim to ransomware, a ransomware attack, get this, every 11 seconds. Didn’t realize it was that prevalent these days and how impactful this was. But I’m going to go through some information and some data on this. But if you’re a small business owner out there, you really need to be paying attention to this. It’s something we need to go back and re, review on our side as well. But We’ve already dealt with it.

We’ve we’ve had it before and one of my best friends. I’m not sure we have things as secure as we need them to be at this point, even. But essentially, you know, for, the way this kind of plays out is, one of your employees essentially could get a fishing email that goes into their inbox. If they click on a link or download something, not even knowing what it is. And I see these emails all the time. They look like an invoice coming from somebody or a DHL receipt or even something from the court sometimes. That can allow a hacker to get into your system, install this ransomware on your computer, and they can basically lock up your entire system. And the way it works like works for them is that then they come to you and say, would you like all your data back? Well, there’s a price to pay for that. And they hold your data ransom.

The problem with that is it’s not only the ransom that they’re asking for, a lot of these businesses, they’re shut down. On average for almost two weeks, they lose customers, they lose revenue, it’s very impactful in their business. It used to be they were attacking mostly institutional type businesses. Hospitals, governments, universities. Those companies, those types of institutions have gotten smart to this. They’ve kind of locked down things now. So now we’re seeing that, they’re now focusing on small businesses because most of us are kind of asleep at the wheel. We don’t think of this as that prevalent. But I think we’ve come to the point now, it’s not if you’re going to get hacked, it’s when you’re going to get hacked. And you’ve got to take some precautions.

A couple of statistics for you, just to kind of scare a little bit more. And this consider this your wake-up call if you are, potentially vulnerable to this stuff. And we are more vulnerable now because of all the remote workers we have. You know, more and more our data is all being stored on the cloud. So it makes us extremely susceptible to this type of fraud being conducted. One of the statistics I saw was, you know, 77% of organizations, if this happens, they go offline. When the ran when they hit the ransomware, and 11% of them are more down for more than two weeks. Another statistic that kind of caught my eye is the cost for most mid-sized organizations, get this, $170,000 on average is what it’s costing to deal with one of these types of events.

Wow. That’s a lot of money. And then another statistic, even after you pay the ransom, 80% of ransomware victims who paid the ransom experienced another attack soon after. So once you’re kind of a target, they keep coming after you. It’s becoming a very huge problem. And, you know, potentially this has the potential to do very significant damage to a small business. It’s an increasing problem. Like I said, with remote workers. And what I would urge people to do is look into some cybersecurity. Try to lock them things down. One of the things I even found which I didn’t even know existed, you can buy cybersecurity insurance that will cover some of these problems and these costs associated with these things. But, you really have to talk to your technical, technology person, if you don’t have one, you need to get one. One attack every 11 seconds. This is probably more important than locking the front door to your office when you leave in the afternoon.

Yeah. You know, it made me think of a bunch of things. So, for starters, like in the, in the legal world, I just had somebody, I guess a couple weeks ago, who had an issue. It’s not really in our bailiwick of kind of what the firm handles here. And I referred them to somebody. And as a close friend, I was convincing them. Look, I know everybody says like, you don’t want to spend this money on a lawyer. If you spend $1000 or $2000 on a lawyer right now on this issue, it’s probably going to save you $100,000 on this issue down the line. Yes. And so it’s like, don’t be stupid. Don’t be cheap and invest. This is sort of the same thing. It made me think about that. It’s like, it’s the same thing. Make sure you spend the money with your IT people to protect the company, protect the small business. And I get it. We’re a small business. So small. And that it kind of makes me cringe hearing you talk about how a lot of this is now going to be focused on small business who may be can’t bear the brunt of it as much as larger industrial companies can. But, you know, sometimes you have to just squeeze the money and find it to make it happen.

And so on the front end, right? IT. Number two, which is you jumped to it. I was about to ask you, like, what do the insurance coverages look like? And this like, how do you, and what does it cost to buy insurance against this? I mean, I hate insurance companies, got to sue them all the time. And I don’t want them to like deny coverage, but like, is it, or are there coverage caveats? Like, those are the questions you want to be asking your agent. You know, what does this cover me for? And what is the cost? So you can make an informed decision on buying that. So a lot of the costs is not the paying of the ransom, it’s the recovery cost. Absolutely. And if your data gets corrupted, you know, replacing that stuff. I mean, this is serious implications for a small business. It could put you in bankruptcy, basically.

It made me think similar to like a lot of the companies down here, and no matter what type of business you are, they may not, well, they know it. They have, they’re paying for business income loss if a hurricane hits, for example, and your business can’t operate for three months. A lot of our listeners who run businesses will have insurance to cover their business economic loss during that period. It’s sort of like the same concept, right? Somebody basically steals your system and you can’t operate and you have a significant loss in revenue. Well, you still have to pay your employees and you still have to pay for their health insurance if you provide that. And you still have to pay for parking, and you got to pay for all the things that cost the overhead of running a business. And, you know, the insurance could be the gap to kind of protect you. And like you sleep at night, in case this does unfortunately happen. But the first line of defense is locking things down.

Because the way these things also work is, not only does it infect your system, but then it spreads to your customers and people you’re communicating with. So, think of your most valuable customer getting a phishing email from your system that you didn’t generate. And all of a sudden, they’re put out of business. How is that going to impact your bottom line with that customer, you know, moving forward? So, one of the, I saw another number in here. It was, the largest payout from ransomware that’s been reported, $14 million. It was a very large insurance company that had to recover their data. I mean, this is serious business. These people are not going to stop coming at us. You have to protect yourself.

Well, it definitely makes me realize we probably have to look at it here as far as like, what is our IT company doing as far as preparing us for that type of scenario? And you’ve also sufficiently terrified me of what your topic will be next week. I’m assuming we’ll soon learn and similar to The Walking Dead or other shows, how fungi could invade our bodies and one day we will be human. You saw my notes. So. Well, thanks, Brad. That’s an interesting topic. It’s been a great show. Really enjoyed dunking on the metaverse and Mark Zuckerberg. Good lesson from that. Don’t always follow what everybody else is doing and say that, just because stupid money flies into something doesn’t mean it’s a good idea. And also, great topic that you had on cybersecurity and concerns there related to ransomware. We have to pay attention to it. No question.

Well, thanks everybody for being with us today. We have had a great show and thank you for listening along. This has been Overruled, brought to you by Scott Vicknair. And we’ll see you next time. Take care.

Scott Vicknair, injury attorneys. We fight for the win. Information is for illustrative purposes only and does not constitute tax, investment, or legal advice. Always consult with a qualified investment, legal, or tax professional before taking any action.