Chiat daydream.

"WE HAVE AN OFFICE. But there's no office in the office," says a Chiat-Day employee, intending neither a Zen paradox nor a Heideggerian tautology but simply trying to explain the ad agency's new "virtual office." There tends to be little that's properly virtual about virtual reality--it's not a simulacrum that anyone honestly mistakes for the real thing--but in the popular mind the word has come to designate vanguard technology, as though its origins in the Latin word for "man" (vir) had been amputated and replaced by a new prosthetic connotation. The realest thing about virtuality may be the hype, yet Chiat-Day--known for innovative work ranging from the Energizer Bunny to the recent NYNEX campaign ("If it's out there, it's in here") to the falling-bungee-jumper Reeboks ad--has taken a remarkable step forward in the last year, opening two "virtual" flagships: an office in Los Angeles designed by Frank Gehry, and now one in New York, designed by Gaetano Pesce.

Just what is a virtual office? In Chiat-Day's implementation it comprises essentially two things: an architectural superstructure and a technological infrastructure. The New York space, located in a glass tower in Manhattan's South Street Seaport, not far from the World Trade Center and the Financial District, doesn't try to monumentalize the agency or create a cathedral of commerce. Instead, Pesce's design gives the impression of a kindergarten playroom: it's happy and warm and colorful and soft and round and funny. Walls apparently made of bricks turn out on inspection to be made of colored video cassettes and remote controls. A puffy pair of red lips--the kind of incongruously and humorously anthropomorphic detail typical of Pesce's designs--surrounds the access window of the Store, where employees sign out cellular phones, Powerbooks, and other supplies for the day. In one work area, desktop Macs are not plopped unceremoniously and unergonomically on old tables or desks never meant for them, but are housed in cagelike stations designed specifically to accommodate the often cumbersome configuration of keyboards, monitors, and hard drives. These stations are distributed somewhat randomly--not in hierarchical rows--around the floor. And from no place in the office can one fail to obtain a slice of the smashing 360-degree view of Manhattan afforded by copious windows.

The backbone of the space, however, is its technology. Jay Chiat, managing director of the agency, balks at calling this the "virtual office," preferring the term "resource architecture." The old kind of office, he explains, is a kind of "storage architecture," a place where employees park themselves at little archives of personal trinkets and business files. The new office, on the other hand, does away with individual desks, filing cabinets, cubicles--in short, with any kind of privatized workspace. Instead, employees can keep their own schedules and work wherever they want--anywhere in the office, or even at home. (They can send work in from their own computers by modem.) The technology doesn't exactly virtualize the space, then--it's still an actual office, insofar as people work there--but it enables employees to become mobile. Like guerrilla warfare, it replaces the trenches and fortifications of desks and filing cabinets with tactics, communications, intelligence, and speed. It's "resource architecture" as a sort of arms brokerage, except that Chiat-Day supplies its ad warriors with cellulars and Powerbooks rather than walkie-talkies and M16s.

There are a lot of dystopian possibilities to be drawn out of the idea of a "virtual office"--a whole Post-Modern Times, with a morph of Charlie Chaplin electronically surveilled to assure that his "motivation" keeps pace with company expectations--but what's brilliant about Chiat-Day's new space is that it points in the opposite direction: literally, toward utopia. Etymologically, of course, that coinage of Sir Thomas More's means "no place," and the new office does deterritorialize the work force. In the Machine Age, F. W. Taylor and Henry Ford sparked an inadvertent architectural revolution: the spaces of offices and factories cemented the division of labor, their tangible structural boundaries reinforcing hierarchical labor relations. In the Information Age, employees at Chiat-Day still have specialized functions, but the tangible boundaries dissolve into a sort of digital decentralization.

This office is utopian in a sense Fourier might have recognized as well, an oddly capitalist implementation of a communist theory of work: on the one hand, employees become self-organizing, ad hoc teams, still with a job to do but able to decide for themselves how, when, and where to do it; on the other hand, Jay Chiat insists that the new workspace is a failed experiment if it doesn't increase productivity. The agency most certainly has not stuck a flower in its hair or a copy of Chairman Mao's little red book in its pocket, and its attempt to restructure both work force and workplace may well be another instance of capitalism gobbling up what once seemed antithetical to it. Nevertheless, at least experimenting with these hitherto utopian possibilities has the result that, though Pesce may have made the office look like a kindergarten, the employees at Chiat-Day are finally treated as adults.

Keith Seward is a writer who lives in New York and contributes regularly to Artforum.