From Legacy Wiki
Side chat is where members of Legacy can talk without the use of the forums.
There is a limit to how many letters you can write and you can only send 6 messages once per every minute. You should not spam side chat as this breaks the Terms of Service and you will be Disfavored. All chat is logged for future staff reference. Most people use it to send short messages to their friends or to advertise what they are selling.
Side chat is where it is also announced if something important has happened e.g someone reaching the rank of Avatar. The message for this is System : 00:00 The hive shakes as (name of account) reaches the rank of Avatar.
Side chat also displays system messages, such as telling you the Hospital is closing 1 hour in advance or which rat won the most recent rat race or if someone has earned a Staff Favor or Staff Disfavor
In September 2006, Zorg made Side Chat real time. this means you do not have to refresh the page to see what the next person is saying. Also in sidechat you have a wide range of Emotions Like Online Chat.