The Future of Payments, Technology, and IP with Moish E. Peltz, Partner at Falcon Rappaport & Berkman LLP

In this episode of On Record PR, Jennifer Simpson Carr goes on record with Moish E. Peltz, Partner at Falcon Rappaport & Berkman LLP, to discuss the impact of rising technology like artificial intelligence and cryptocurrency on the evolving business and legal landscapes. Moish is a member of the firm’s executive committee, co-chair of the Digital Assets Practice Group, and also leads the Intellectual Property Practice Group. He has over a decade of experience in IP and business law, including at the intersection of blockchain technology where he has advised businesses since 2014. Moish is also the co-host of the Block and Order podcast, a show that breaks down the latest legal news in blockchain and technology.

Jennifer Simpson Carr: It is exciting for me to chat with a fellow podcast host. I’ve enjoyed listening to you and getting to know more about your work, and I find your episodes engaging and organic. Thank you for putting that great content out in the market.

Can you give our audience an overview of your practice and how you support clients?

I spend about a third of my time in three different buckets. One of which is my background and what I grew up learning, which is intellectual property, trademark, prosecution, litigation, things of that nature. A very traditional practice, in a sense.

The second bucket is the digital assets practice which is perhaps a little less traditional, although we’re supporting a lot of the traditional things that our firm does, whether it’s trust and estates, tax, or corporate litigation. It’s helping clients with a focus on technology, blockchain, or NFTs consume legal services that are customized for their industry, understanding the wrinkles that type of business has, and then making sure that the legal services we’re providing match their needs.

The third bucket is serving on the executive committee and thinking about all these issues, including digital assets and AI and all sorts of new and fun stuff. Making sure that our firm is contemplating all this stuff as we grow and we’re learning it holistically across the entire organization and implementing best practices.

Jennifer Simpson Carr: I’m excited for this conversation because you are working in areas that are hot topics, but I know that your firm has also been a leader and an innovator in these emerging spaces. Let’s start with financial technology, particularly cryptocurrencies. It has been a hot topic for many years, and for law firms, which are typically risk-averse, there are many considerations – security, compliance, and clients’ expectations.

How should law firms approach the question of accepting cryptocurrency as payment, and what factors need to guide their decision-making?

If there’s any law firm principal who thinks, “Man, I really want to accept cryptocurrency, but I’m scared or I don’t know where to start,” contact me. I’d love to talk with you about it. There was a time when law firms didn’t accept credit cards, and then all of them did because that’s how people want to pay for stuff. We’re not quite there with crypto, but the reality is we have clients who say, “I have a ton of crypto. You have a lot of legal services. Can I pay for your legal service with the crypto?” The entrepreneur in me says, “Of course you can. That’s how you want to pay. I’m going to support that just as I would support someone wanting to pay with a credit card, a check, or a wire.” If you think about clients who are not in the United States, paying across international borders can be quite tricky, and even credit card fees are typically 2-3-plus percent fee.

There are a lot of problems that the technology solves if you implement it correctly and ethically. There are different ways you can do it. You can accept crypto directly, which is not something I would recommend any novice do. Also, there’s ethical guidance that different state bars have promulgated on how to do it. For example, if you’re holding Bitcoin in trust and the client gives it to you when it’s $50,000, and in the past month, it’s gone up to $100,000. I would recommend not having exposure to exchange rate fluctuations in trust. You can find technological tools that make it super easy for anyone to accept crypto, just as they would a credit card or some other payment mechanism.

Jennifer Simpson Carr: That’s interesting, and it’s one of a few areas you work in. I want to get to artificial intelligence. It’s another area that has made such a mark in the world in recent years, particularly over the last 24 months, for anyone following the news that includes the legal industry. From streamlining documents to enhancing client service, it’s starting to reshape how firms work generally, but also clients’ expectations for their outside counsel in how they deliver those services.

Can you talk about how AI is impacting client service and the delivery of services in the legal industry?

Putting aside legal practice, if you sit down and use some of these AI tools like ChatGPT Pro or Anthropic’s Claude, or Perplexity, it’s very clear that they do certain tasks at a human level, or they make a human who is perhaps an underperformer a better performer, or they make a human who is a top performer an even more efficient performer. To say, “Okay, that’s cool. The technology does all these things, but it’s not applicable to the practice of law,” seems ridiculous. It’s very clear that these tools are going to drive efficiencies in the way that professional service providers think and provide services and contemplate and do all the things that a lawyer or an accountant, or a financial adviser does. It’s going to have an impact.

I think we’re still very early in determining how a law firm can use those tools in a way that they’re comfortable with data privacy questions or their employees and staff using the products in a way that delivers better outcomes versus just using them as a shortcut and producing results that get filed to the court that end up in the New York Times.

I think the big part is how do firms embed in a way which fundamentally increases revenue and profits, delivers a better work product, and drives efficiencies for both the client and the law firm. That last piece is something that you don’t hear a lot of people talking about publicly, but we’re thinking a lot about all those things. We’ve piloted a ton of different software, and we’re thinking strategically about how we’re implementing these things going forward.

Jennifer Simpson Carr: Going back to the risk-averse nature in legal and knowing that instances that have appeared in the New York Times can rattle professionals and pique that risk aversity that they have – how do you as a member of your firm’s executive committee communicate internally the balance between continuing to move forward with innovation in a mindful way so that you are helping differentiate your firm and providing great client service, but also maintaining ethical considerations and helping people feel confident that this is a great direction to go?

Moish E. Peltz: One of the reasons I love being at my firm is because my partners and the people we work with embody that entrepreneurial spirit. We’re starting on this issue from the way I framed it, which is that it’s clear these tools do incredible things. It’s clear that they need to be implemented into legal workstreams. How do we get there? What are the problems we need to solve?

One of the biggest problems is data privacy – obtaining client consent, acting in an ethical manner, making sure that clients understand the risks and are signed off on those, and that we understand the risks and feel confident. We have these conversations internally amongst our executive team and external consultants we rely on for technology and ethical compliance, including an internal general counsel.

It’s saying from a business perspective, “Here’s where we think things are going. How do we put that together in a way that everyone feels comfortable?” It doesn’t happen overnight. We’ve been working hard addressing all these questions, including reaching out to clients and saying, “How would you feel if we use this product on this matter?” and getting their buy-in and showing them how this can be done more efficiently in a way that’s going to benefit you, but also we need to take all your data and put it into this tool. “How does that make you feel?” It’s having those conversations.

We’ve been piloting things like that. We’ve been putting policies and procedures in place, and we’ve been talking internally and externally about how we can best utilize these tools while maintaining data privacy, ethical compliance, and all these other things that we need to do from a risk mitigation perspective. We see that as something our firm is uniquely positioned to challenge, and we fundamentally think the technology is so great and beneficial that if implemented correctly, it’s going to drive better client outcomes. We’re not there today, but thinking long-term, you’d be missing out.

I think law firms are going to start to feel that FOMO, and whether you’re at an AM Law 20 or you’re a solo, there’s going to be a lot of conversations about how to implement the right technology to achieve these kinds of outcomes, because you can’t just turn a blind eye to technology. If you’re still responding to client correspondence by handwritten letter, I’m sorry, but you’ve missed the boat. It’s balancing the technological improvement with the business requirements of running a modern law practice with our ethical restrictions and all the data privacy things that go along with that.

Jennifer Simpson Carr: I’ve heard an interesting theme of transparency, both in your internal communications and discussions, and also externally. I love that you’re talking to clients about what they want to see. So often law firms historically have made decisions without integrating the feedback from clients they serve. We’re hearing from general counsel, and they’re interested in having these conversations and piloting, so that’s amazing. I can see now why the firm is in the position it is in terms of its innovation and forward-thinking approach.

I noticed in your bio that you have a number of hobbies, including the saxophone, which is my absolute favorite instrument. But I also noticed that you collect NFTs. There has been such a rise in this area that’s uncharted and has disputes in intellectual property and regulatory uncertainty. They’re not going away.

What is your interest in NFTs, and what should businesses know to proactively address some of the challenges in this changing NFT Web3 space? What should they be thinking about?

Unfortunately, I’m not at my home office today, otherwise you’d see my saxophone sitting behind me. How I got into intellectual property in the first place is through my love of music. I worked in the entertainment industry before I went to law school and even during law school, I had some music and then music-adjacent work experiences and landed at intellectual property. In parallel, I came across block chain and Bitcoin and some other things like that. I thought, “Oh, that’s cool.” I don’t think I really got it at the time. Otherwise, I would have bought a lot more, as the price has gone up insanely.

I saw NFTs and realized you’re taking intellectual property, whether it’s art or music or computer code and you’re fixing it into this token, this software thing that is immutable and provably a digital object – something you can own, but it’s digital. For me, it’s marrying the intellectual property interest with the cryptocurrency interest. I grew up as a kid collecting basketball cards. I saw NBA Top Shot. I thought, “Man, if I were a 13-year-old kid now and there were digital basketball cards that I could flip for hundreds of dollars, that’s what I would be doing 100%. This is genius. This is going to be the future of collecting.”

I don’t want a shoebox of thousands of cards that’s in an attic. It’s all musty. It’s gone bad. No, this is something you can collect on the internet like all the other things you collect in your digital life and there it is. If someone wants to buy a Michael Jordan rookie card from you, you don’t have to go into a box and find out it’s bent and warped and been ruined. Now it’s only worth 5000 instead of 30,000. No, you can sell it on the blockchain to someone in a country across the world.

I thought that is the future of digital ownership and intellectual property. Once that clicked for me in 2019-2020, that’s when I thought, “Our firm needs to have some competencies around this. Let’s open a practice group.” That happened because prospective clients were coming to me and saying, “Hey, you’re an IP attorney. Can you help me figure out this NFT thing?” I was like, “Yeah, sure.”

I think it’s super fascinating. Even just talking about it now, it gets me really excited. Crypto is so volatile where the prices go down and people leave the industry for dead. That’s when all the crazy people ignore all that, take the price out of their heads, and just go back to work and build more cool stuff. Now we’re in this era where the prices are going back up. People are paying attention, but wouldn’t you know it? There are some people who have been building cool new stuff for the past three years that you’ve never heard about, and once that hits the market and people start learning about it, trying new things, building next-generation technology, and marrying that with IP and consumer products, stuff gets really cool.

Jennifer Simpson Carr: That’s amazing. I also noticed in your bio that you work with a lot of emerging companies, entrepreneurs, and startups, and certainly, intellectual property is critical for many of these companies as they’re getting off the ground to maintain a competitive edge or secure future funding or growth.

What strategies can entrepreneurs and startups use to protect their IP in an area that’s changing so rapidly?

It’s a valid concern, and I think it depends on the company, what they’re trying to do, the scale, and the risk tolerances. I would say basically every venture technology company should have an IP strategy and should have as part of their team someone who’s thinking about that, whether it’s internally or an external legal advisor. That’s what we’re called on to do a lot with these early-stage companies – help them develop a strategy for, “Look, we haven’t even raised a seed round yet, but here’s what we’re thinking, and here are all the things we’re going to need to execute our vision down the road. What can we do today to make sure that we’re able to grow into that?”

As you’ll often hear from attorneys, the earlier you can have that conversation and help them set themselves up for success, the more likely it is that when they grow into larger funding or a larger consumer platform, instead of saying, “No, this is an emergency. We never did this,” they can say, “Okay, we’ve been preparing for this. Now is the stage where we do this,” whether it’s filing a trademark or getting some patents or license agreements.

For every stage company, it’s figuring out not just intellectual property, but forming an entity. I have this conversation with entrepreneurs all the time. You need to have an operating agreement. You and your partner are 70/30 owners of this thing, but there’s no document that says that anywhere. That might be a problem if things don’t go exactly as you plan, or even if they do. It’s just education and talking to people and making sure that they’re setting themselves up for success.

Since we’re wrapping up 2024 and looking ahead to the new year, what trends are you seeing? What are you expecting to come down the pike? What are you helping your clients prepare for?

We mentioned AI before in the discussion. I think from my perspective that’s the biggest theme for law firms in in the next year – how they’re implementing AI, how they’re driving efficiencies using the technology, and what that means for the business of law. It’s going to be hard to overstate how important that point is going to be.

For law firms as a whole, AI is part of this conversation, but it obviously touches on a lot of other points. We’re this mid-size law firm and defining what that means relative to the very large firms which seem to be increasingly consolidating and very small boutique firms that may have really strong knowledge of one vertical but aren’t so wide.

For firms like us, it’s proving out that mid-market and showing clients and prospective clients and general counsel, the value proposition of that, especially when you have a firm like ours that’s tech-enabled and doing things efficiently at a high level without the overhead of an extremely large law firm. You only have to look at the accounting space and the consolidation that’s happening there. Legal’s different, and there are different rules about firm ownership and things of that nature. But when you look at the trend of what’s happening on the accounting side and thinking about what’s going to happen in five or ten years on the legal side, it’s interesting, it’s exciting, and it’s also kind of scary. It’s really fun to be thinking about the business of law from our standpoint.

Jennifer Simpson Carr: I’m fascinated that the work you do every day is in areas that are so fast-moving and ahead of the game, particularly in the law firm space..

Moish E. Peltz

Learn more about Falcon Rappaport & Berkman LLP

Listen to the Block and Order podcast

LinkedIn: https://www.linkedin.com/in/mpeltz/

Jennifer Simpson Carr

Website: https://www.furiarubel.com/our-team/members/jennifer-simpson-carr/

LinkedIn: linkedin.com/in/jennifersimpsoncarr

Instagram: @jsimpsoncarr