The music industry is witnessing the kind of seismic shift last seen in the late sixties and early eighties, when audio cassettes and compact discs were introduced.Already 2% of net sales of music are transacted over the Internet.

Last month the celebrated Napster case led to the loss of the US company's controversial po licy of offering music which could be downloaded free from the Internet.'The important point in all this is that, long-term, many more people will access music direct through computer screens,' says Paddy Grafton-Green, senior partner at City firm Theodore Goddard.

His clients include Tina Turner, David Bowie, Elvis Costello and Oasis; he also acts for record companies such as Telstar, Universal and Sony.'The most obvious challenge through all of this is the potential both at the moment and certainly in the future for breach of copyright,' he explains, adding: 'The record labels are currently working hard to perfect encryption-coding devices that protect the copyright.'The problem, he says, is that it does not resolve the problems of those products already infringed: 'It is hard to stop infringers; they can be impossible to chase through jurisdictions and it requires time, money and investment.'Robert Thompson of London-based Lee & Thompson -- who acts for The Spice Girls, All Saints, Depeche Mode, Massive Attack and Robbie Williams -- explains why Napster has found some support among artists: 'There is a traditional antipathy towards the corporate side of the industry.

This has not been helped by the still greater concentration of rights ownership in the hands of a now dwindling number of major records companies.'Many artists and members of the public enjoy the spectacle of the major record companies seeming to struggle with what some perceive as the threat of new technology.But Mr Thompson maintains that the Napster defeat has 'helped all sectors of the industry to concentrate on some key issues'.

Besides, he says: 'Few members of the artistic community would have welcomed the increasing anarchy which a victory for Napster would represent, and the dispute is a timely reminder for the entire industry of the need for vigilance in the protection of our copyright laws.'Richard Bray, a partner at Babbington Bray & Co in London, whose clients include Blur and Texas, agrees that the Napster case crystallises the problems faced by the industry as a result of technology: 'Digital music is harder to police than, say, an unauthorised disc reproduction manufacturer.' But he too maintains that the case has focused the industry's mind on the problem.The response from the music industry has been sharp.

Mr Thompson says 'content is king' is the mantra which has driven AOL towards Time Warner and led to other strategic alliances between music producers and Internet companies.He explains: 'In the 1980s and 1990s, the major record companies acquired all of the significant independent record labels companies and now those majors themselves are merging.

The majors are all developing their own Internet strategies together with more secure delivery systems in order to turn the technological revolution to their advantage.'But however much the record companies pull back, there are real threats ahead.

Mr Thompson predicts they will be forced to operate in a more competitive environment as a result of technology companies wishing to diversify into content creation, so that the stranglehold of major record companies may be relaxed.Another danger, he forecasts, lies in the impact of competition laws.

He says the majors have been investing in new talent, only on the condition that new artists enter exclusive long-term contracts with options for up to five or even six or seven albums.'I acted for Simply Red when they signed their first record deal with Warners in 1985,' he recalls.

'It was a heavily negotiated deal at the time because all of the record companies were chasing them, but all of them would have insisted on a long-term deal.

After 15 years the contract finally expired this year; although, of course, Warners owns outright Simply Red's entire recorded output to date.'Mr Thompson says the European Commission (EC) also looks threatening: 'Recently [the EC] only had to suggest that it might look more closely at the system of player transfers in European soccer for UEFA to respond by announcing that it will take steps to abolish the system.' It seems unlikely that the record industry will escape closer scrutiny for much longer.But what are the effects of these changes for lawyers servicing the music industry? Mr Bray predicts that legal practice will alter if there is a clarification to copyright law.

He says: 'At the moment it is difficult to argue that copyright has been breached where a product is clearly designed to receive pirated material -- on the basis that it requires the purchase of the original material in order to copy it -- and this situation ought to be changed.'Mr Grafton-Green is similarly passionate about the future protection of copyright: 'After all if you can't secure copyright you can't secure revenue, without which there will be no possibilities for reinvestment in the industry.'This could, he maintains, lead to a massive reduction in choice of music if the major labels are forced to rely on their existing big names rather than continue investing in the future.Mr Thompson says the negotiating power of the artists could increase, not only because there might be more competition for their services, but also because the new technology could work directly to their advantage.He says: 'Other clients of ours, Marillion, being now finally free of any long-term exclusive recording contract, have funded the recording costs of their next album by pre-selling the album to their fans by soliciting orders direct from them through their Web site.'Sports personalities, film and television directors, and major acting talents already retain more control over the rights they create, and over their lives.

Now the musicians are waking up.Mr Thompson says the record companies have been successful in demonstrating the value of copyright, and this is a lesson which artists and their advisers would do well to learn.Those lawyers who fancy making a move into this turbulent world -- and at such a critical moment in its development -- should take heart from the fact that it takes all sorts.Mr Bray says: 'Most of the lawyers in the business love music; I am obsessive about music.'Mr Thompson adds: 'I am tone-deaf, which I am sure has always worked enormously to my advantage.'