It's time for me to collect another round of your $.02 again:

The Concept: Legacy Reputation

Let's say you have a high-level smuggler, but you want to roll an alt on your account just for fun. Legacy reputation means that when you roll a new character, you can mention the name of your alt to get easier entry into NPC factions or organizations. Your main was pretty well known among the smuggler's guild. This can be leveraged to make faction NPCs friendlier and more willing to let you in ("Any friend of <Leeroy Jenkins> is a friend of mine, you're welcome to browse my supplies." kind of response).

This serves two purposes:

• A little bit quicker way into a preferred NPC faction (not as a go-anywhere-free pass, just a little extra rep and opportunity).
  
• One of those cool moments when it feels like your previous characters have actually influenced the world.
  

My Questions to you:

1. Potential problems or exploits with this idea?
   
2. Have you seen something similar in other MMOs? I'd like to study how they implemented it
   

Momentary thoughts off the top of my head before I go buy antibiotics for this persistent production of phlegm from my lungs.

• Multiple account holders might pose a problem
  
• One alt has a great reputation with Faction X, another alt has a great reputation with Faction Y - Faction X and Y hate each other and both factions provide different gear access etc, what effect on the third alt who claims the other 2 alts as mates.
  
• Hiving off a character from an account into a separate account - will reputation gained via "mateship" be lost, maintained etc (possible exploit issue here)
  
• You might build a test function into the "That bloke you like is my friend and you should love me for this reason" something akin perhaps to the mafia where you need to prove yourself by making your bones and if you fail - your mate also suffers a reputation loss.
  
• WoW has implemented reputation gear with some factions as being account (faction) bound so the one toon you have that has the rep equips the other toons.
  

MMOs are about building relationships with other real people, not with your other accounts
Also, in MMOs you don't have (or at least should not have) "previous characters".
You are thinking in terms of single player games also it does not sound as if you were a huge fan of MMOs...

Nope. You aren't related to other accounts. Anyway, in an MMO you and your friends are supposed to be able to have a lasting effect on the world.

Anyway, in an MMO you and your friends are supposed to be able to have a lasting effect on the world.

Exactly! But has this happened yet? I mean, besides A Tale In The Desert, I've never been capable of producing a "long-lasting effect" in any MMO.

MMOs are about building relationships with other real people, not with your other accounts

With luck, I intended Legacy Reputation to give you the feeling that what you did with Character #1 actually mattered in the world, so that when you start Character #2, you can visually see the difference you caused yourself. (One of many mechanics to help this feeling, this one deals simply with reputation).

However I see your point. This is more of a personal benefit. What if the concept was expanded to mentioning your friends names? Say you entered into a raid with a group of strangers, and really hit it off. So you made good friends with "Dark_Mage" who as it just so happens is a high-ranking member of the Night Watch Police (NPC organization).

1. You could have the ability to mention people on your friends list to entry guards.
2. Friends could 'recommend you' to the organization, making entry easier.

The problem with involving other players is it becomes immediately susceptible to exploitation. People you don't even know asking for recommendations, or people mass-friending or mass-recommending everyone they see. It takes away from the cool factor you feel when a good friend gets you into somewhere.

More problems?
More solutions?

Perhaps, if the person you recommended failed, your reputation would go down, and after so many recommendations, their value becomes inflated, and they're not worth as much.

May be you can implement a synergy system where your friend's influence on faction standing is weighted by amount of "playing together". So you would be more synergized with friends you play with rather than people you just added as friends.

"Playing together" can be defined very differently. Here are some metrics to calculate that:

• Being in the same guild. ( a small instant boost )
  
• Finishing a quest together
  
• Finishing a raid together
  
• Trading ( may be exploited so it should have a upper limit )
  
• Forum participation ? ( May be you can implement a system that is connected to community forums)