Law firms throughout Europe, like their counterparts around the world, are seeing a flood of new work advising clients on doing business in the metaverse—from blockchain and cryptocurrency to artificial intelligence and non-fungible tokens.
But the firms’ approaches, like the projects they are called on to advise, vary widely—reflecting the newness of the market, its fast growth, and the experimental nature of much of the work, lawyers in Europe told Law.com International.
“We are discussing it with our whole client base—finance, luxury, fashion, sports, video games—every industry,” said Franck Guiader, who heads an innovation and Web 3.0 team at the elite French firm Gide Loyrette Nouel.
“This is just the beginning,” said Boriana Guimberteau, an intellectual property partner and head of the metaverse practice at Stephenson Harwood in Paris. “There is a lot of speculation now, but in time this will be a part of the landscape. Everyone wants to know more.”
A project in Portugal shows how the new technology is filtering into unexpected sectors and how law firms are getting involved.
Abreu Advogados, a business law firm based in Lisbon, advised on the creation and launch of the “Artentik | NFTs for good causes” platform of Santa Casa da Misericórdia de Lisboa, a Portuguese charitable organization.
Artentik is an NFT marketplace, registered on the Ethereum blockchain network. The tokens, or virtual images, are linked to items belonging to Santa Casa’s collection of art, relics, reliquaries, sculptures, artifacts and other objects, authenticated by the charity.
Abreu advised on all legal aspects related to the creation and development of the platform with a team encompassing partners in tax, fintech (for the underlying blockchain technology), and IP (for rights and contracts).
The project involves a rare combination of “a traditional institution with a conservative market position that is also at the front line of this business,” Isabel Pinheiro Torres, an associate partner in financial services at Abreu, told Law.com International.
Santa Casa “wanted to find a way to monetize their assets to raise money—to sell sacred pieces that they own and display in a church and museum, and still keep them and keep the property open,” she said in an interview.
Selling NFTs is also a way for the museum “to expand its market globally,” Pinheiro Torres added.
Because the metaverse is built on a foundation of blockchain technology and cryptocurrency, financial services and tech teams are often the first points of entry for clients looking for advice.
Abreu got involved in the Santa Casa NFT project through its financial services practice team, which has been seeing increasing demand from clients to “provide services to those investing in crypto assets,” Pinheiro Torres said.
But IP teams and specialist firms also field a huge proportion of new pitches, particularly for NFT advice, since copyright and data protection issues are key to those products.
Guimberteau, at Stephenson Harwood, said one of the more unusual propositions she had seen came from a French newspaper publisher. The group runs an annual prize for its best customers, and this year, instead of a trip or a trinket, it was looking into offering an NFT instead—“something different, a novelty,” she said.
She has also fielded requests from entrepreneurs setting up NFT marketplaces, she said, along with a deluge of interest and projects from the luxury and fashion industries, including major players.
“The luxury sector is in high speed now,” Guimberteau said. “All the big companies are testing to see how it will work.”
She added that at the moment, 75% of the market for NFTs was in collectibles, virtual versions of collectible products or brand-linked merchandise. Another 7% to 8% was in artworks, and the rest was in property and clothing, she said.
Like so much in this field, that could change tomorrow, and lawyers said a large part of their work on the metaverse involved keeping abreast of new laws and regulations, challenging but not so different from what their practice already requires.
In fact, for many lawyers, the situation today recalls the early days of the internet, both in its Wild West aspects and in the opportunities for creation.
The metaverse is “an evolution, not a revolution,” said Catherine Mateu, a partner at Armengaud Guerlain, an IP-focused boutique in Paris.
“We have been there already when music went from CDs to streaming, or when we started getting services on the internet,” she explained. “Copyright or patent in the virtual world is a new way of protecting a right, and of course, there is some adapting, but we already know the structure.”
Guiader, at Gide, added that since advice to clients on the metaverse is fundamentally still advice to clients on their business, experience matters, and therefore it is not solely a young lawyer’s game.
“A lot of issues are not really new,” he said. “The partnership between brand and platform is not new, and to advise a client you need a track record of understanding the brand as well as the technology.”
Whatever the industry sector, lawyers said the high demand for advice on this new, complex realm means that multiple practice teams will be involved.
At Stephenson Harwood, Guimberteau leads the crypto-metaverse practice out of the IP department but works closely with colleagues from other practice areas in the firm.
Gide has a task force on all things crypto and metaverse that brings together lawyers from corporate, regulatory, IP and tax, Guiader said.
“It’s important to have regulatory expertise because regulation will be central in the development of transfers within the metaverse,” he said. “And if metaverses become interoperable, rules will have to be harmonized.”
Guiader sees the advice that lawyers should give clients interested in the metaverse as two-pronged.
“It’s important for brands to go fast, to establish a presence,” he said. “But they also need a clear strategy for their business model and how they will manage the risks.”
That strategy, he said, had to go beyond “traditional legal issues in digital commerce, like data protection.”
“The metaverse is based on blockchain and cryptocurrency,” he said. “If you don’t understand these fundamental technologies, your project will fail.”
But where clients interested in the metaverse might find blockchain and crypto too dense or deep-tech, NFTs are easier to grasp and provide a gateway into this new world, Guiader said.
“There is an acceleration around the metaverse that we didn’t see around blockchain,” he said. “Three years ago, you’d mention these technologies and clients would say, ‘I don’t know what I don’t know.’ With the metaverse, they know what it is, and they want to be advised and accompanied.”