The aim of this article is to provide insight to Cyprus Law firms in relation to the implementation of a strategic plan to combat the recent downturn due to the Covid-19 pandemic. This article is therefore aimed at those who own, invest in and work in law firms in Cyprus and for those who want to think seriously about the issues of strategy, competitive advantages and valuation in the Cypriot legal services market. As the legal profession in Cyprus changes in the next few years, possibly fundamentally, it is important that law firm managers make well informed decisions.

With the implementation of a strategic plan, Cypriot law firms can achieve higher profit margins in a cost effective manner. With a collection of published advice from leading law firms around the world, this article hopes to help law firms in Cyprus compete with the best law firms around the world by providing first class services. The aims of this article are met through an extensive study of data collected from legal firms in Cyprus and from the relevant literature, the archives of the Cyprus Bar Association and advice from head partners of successful law firms in the UK, US and Cyprus. This book will project a number of key findings: 1. Top tier law firms have a strategic plan in place and have a clear vision in mind, which is expanding their firms despite the economic downturn; by contrast, lower tier law firms are struggling with the recent shift in economy and their profitability has not and increased over the past year.

The main conclusions drawn from this research are that current approaches to strategic plans deployed by Cypriot firms are not in line with those found within literature and those proposed by successful lawyers in the UK and the US. Despite this, there is optimism in the growing field of the legal profession in Cyprus and around the world. Through the implementation of the “7s McKinley step test” and the development of a strategic plan law firms in Cyprus will be able to increase productivity and increase competition in the relevant market. It is also proposed that more client development, consistent generation of new business with reasonable rates, lower leverage associates to partners with high productivity,bonuses that link to productivity rather than profitability, increased staff training and education, implementation of technology and a lean overhead are all issues that must be considered to increase the profitability of the firm.  

The article does not purport to have all the answers, but aims to ask the right questions. Therefore, the contents of this article is not intended as advice or substitution of advice on issues of strategy, and the writer and publishers do not accept any liability for decisions or actions taken in reliance on the text.


At present, law firm managers are facing internal and external pressures that make strategy and vision more crucial than ever before. Forward-thinking law firms understand that they are operating in an increasingly competitive marketplace experiencing one of the worst recessions seen in decades and that they must transform themselves in order to thrive. The initial step in this transformation for law firms to be successful in the long term is to align a firm’s processes, infrastructure, strategy and culture with a clear understanding of the current and future wants and needs of clients and prospects. As the Covid-19 pandemic continues to hamper the economy, many law firms are grappling with the big questions of how to move forward, promote sustainability and continue to service their clients.

According to the World Bank, the baseline forecast is a 5.2% contraction in the global GDP in 2020. This reflects the deepest global recession in decades. In fact, according to the IMF we are going or are living through the worst recession since the Great Depression and the Global Financial Crisis. Governments around the world have made extraordinary efforts to counter this extraordinary downturn with fiscal and monetary policy support. The recession, however, will undoubtedly leave long lasting scars even with the unprecedented support offered to households, firms and financial markets. There is considerable uncertainty about what the economic landscape will look like. Cyprus, being reliant on tourism, hospitality andentertainment for growth will particularly experience a large disruption. According to the stability program submitted to the European Commission by the Cypriot Finance Ministry, Cypriot GDP will decline by 7% in 2000 and public debt will represent 117% of GDP.  Whilst,the Cypriot economy recovered rapidly after the 2013 crisis, due to a restructure and its diversity of economy, the big question is if Covid-19 is a challenge to far? Only time will tell. What is certain is that Cypriot law firms must create a short and long term strategic plan to whether the storm and increase profitability if and when the economy recovers.


The term “strategic plan” is often discussed in the legal services market and many firms claim to have a plan in place to increase profitability. However, although creating a strategicplan is considered by many as a top priority for the well-being of the firm, it does not follow that law firms are implementing them. It seems that many lawyers are so consumed with the day to day practice of their firms that they are losing sight of the ultimate goal, which is creating a profitable firm. The problem starts with the fact that many lawyers feel that their ‘ real work’ is the service they provide as lawyers, for example dealing with clients on a case-by-case basis. Law firm leaders consequently forget that the legal services market is much like any other professional services market and should be treated as such.

Strategy is an explicit course of action undertaken to achieve the aims and objectives of an organisation. The overall strategy of an organisation is known as the corporate strategy, but a strategy can be developed for an individual organisation or for any aspect of the organisation’s activities such as provision of services or human resources. The legal services market is forever changing and therefore a strategy is required to guide a business through the environment to achieve its objectives. The strategy should help the business to align the organisation, resources, capabilities and competencies to the environment in order to achieve a competitive advantage. Strategic management is crucial to any professional services business and will ensure that the business is continuously adapting to its environment meaning that the business can then meet the demand of its customers in the best way possible, by matching resources and capabilities to the environment in which it operates. The ultimate objective of strategic management is to gain advantage over your business rivals. Competitive advantage is the ability to create greater economic value than your competitors, and the pursuit of this is central in strategic management.

A strong strategic plan identifies a law firm’s goals and objectives and sets out a vision for its future. It assesses all the factors that have an impact on the business of the firm and it offers the heads of the firm an opportunity to adjust practices taking into account the economic climate ahead. Putting together a solid plan usually includes several steps, including determining the firm’s values, mission, vision, objectives and goals. Another part of the planning process should include an analysis of the firm’s strengths, weaknesses, threats and opportunities (“SWOT” analysis) and also the application of the popular alignment test i.e. the McKinsey 7S alignment model.  

The phenomenon of strategic planning in the legal services market is not a new phenomenon, it is something that has been troubling managers of law firms since the 1970’sand 1980’s. In fact, many partners of successful law firms have published their views on what they believe to be the best formula for success and for increasing the profitability of firms. From extensive research it is apparent that the Cypriot legal services market has not put much stock in the development of strategic plans, this is highlighted by the fact that Cyprus held its first seminar on strategic planning for managing partners on the 25th February 2012 where only top tier firms were invited to listen to speakers from the UK, thus illustrating that this topic is new and undocumented.

Strategic planning is a process by which a company or law firm determines their overall direction and identify what is important in conducting their business, including deciding the firm’s vision, purposes, and its values. The firm must also decide what must be done to achieve the strategy they have defined, and how that strategy will be implemented most effectively in order to achieve the goals set. The firm must commit to this strategy in the long run in order to make it work and align itself in accordance with the firm strategy in order to achieve its goals.

The last 10 to 15 years have seen an evolution in strategic planning.  Law firms in particular from virtually no planning have progressed to the present recognition that planning is an important part of a firm’s management. This is not to say that there was no effective strategic planning in the early days of law firm development, especially since the most successful firms today are those which were established years before by the most successful and innovative entrepreneurs. Despite this, effective planning was limited to big corporate firms going on ‘weekend retreats’ to discuss internal issues and concerns of the firm.

Since the economic downturn in 2012 the legal services market has changed fundamentally  due to the and lawyers were required to think in ‘more business like ways’. In particular, they thought more about their competitors and the bottom line. The reasons for this change according to Stephen Mason, especially in corporate firms, is that professional partnershipswill usually have invested capital in the firm and they may have taken out loans from private banks in order to fund the purchase of premises or investments, therefore stakeholders were looking for the most effective ways to see a return on their ventures.  

Another reason why strategic planning has evolved according to Stephen Mason is that ‘competition has become more acute and less localised’ meaning that firms are having to work harder in order to retain clients. It seems that on a global level there are too many qualified lawyers for the volume and value of work available.

Technology has also changed the face of the legal services sector with more lawyers using the digital age to gain an advantage in client relationship building and networking. Technology was once regarded as a support tool to aid the efficiency of legal practice. It made document production faster and more consistent and improved document storage and precedent systems. Networking and interoffice communications has reduced the geographical limitations of practice and client service. However, technology has not only helped lawyers be better at their jobs, it has begun to replace them. Online advice and access to free legal products such as wills and other legal documentation are now available. Few law firms have contemplated the possibility of .com advice let alone are prepared to take advantage or  protect themselves.

Generational differences is also a factor which has changed the face of the legal profession around the world and rings true for the Cypriot legal services market, where younger generations are coming back to the island and taking over family run law firms having in mind different expectations and priorities. The Generation of 1980s and 1990s is defined bygrowing up in the media and computer age, so that their expectations of communication, social interaction and buying goods and services are very different to the older generation. The younger generation is more socially aware than earlier generations and is less inclined to ‘sell its soul’ for their work and career, seeking a better work-life balance, which undoubtedly will have a profound effect on working hours and methods, career prospects and reward systems to meet the new set of expectations. The emergence of the younger generation will undoubtedly change the buying patterns and methods of law firm clients. They may expect a more technological, remote and virtual experience than the typical face to face interactions that earlier generations have become accustomed to. Are law firms in Cyprus ready to face the above changes? The use of technology has become ever the more important in an age where clients are less likely to want to visit a law firm in the midst of a global pandemic.

Firms are no longer growing faster and making more money than they thought they would and competition, uncertainty and the realities of business risk have become accepted constants. Some firms recognise the importance of common direction, commitments and values which have instituted an effective strategic plan. Firms are beginning to plan effectively but they are still a distant minority. The present level of strategic planning in law firms in Cyprus is not sufficient to meet the market conditions that law firms are facing. There is still a belief that planning can be accomplished quickly around a coffee table with a focus on internal issues and concerns, rather than forming and implementing an external strategy. Law firm strategic planning must improve dramatically for firms to be more effective and profitable and to face the challenges ahead.


In many instances it is not clear what the strategic plan of a firm is, but it can be inferred from the day to day practice of the firm or from the investments the firm is making. Consequently, a firm may not have a written plan per se but it may be obvious from the actions of its leaders what the vision of the firm is and what goals they want to achieve. However, there are still a many lawyers who do not value the advantages of strategic planning or any planning for that matter in law firms (Mintzberg 1994). This is especially truein partnership law firms in Cyprus where partners are more interested in their client portfolio and dealing with their own personal cases rather than managing their firm. Many partners view the practical workings of the firm merely as administration. In addition, a partner formation can also prove difficult to implement any type of plan since it entails the agreement of all partners which can prove difficult when not all partners share the same vision. Despite this, drawing up and implementing a plan can be crucial to the survival and profitability of a law firm. Failing to plan could lead to the failure of the firm. In addition, in an uncertain global market planning can prove essential to prove the firms performance in the short term and can be adapted for long term success in order to avoid the uncertainty that the economic environment imposes upon each firm. Porter in his book on Competitive strategy claims that planning also gives a mechanism for communication to promote co – ordination across the organization which in turn enriches the common understanding amongst partners and employees. For example, what type of clients the firm expects to be representing and how employees are expected to treat those clients in terms of lawyer client relationship can play a significant part in the re branding of a firm, however it is not enough that the partners of a firm know the direction and goals intended, the strategic plan allows for this to be communicated.

Setting out the firms values is particularly important in order to develop a common agreement between the partners of the firm (Mintzberg 1994). Strategic planning works, and this has been proven time and time again by studies and companies that have set out a direction with a common set of understood values, who in turn do dramatically better than those without. Linklaters, the second leading firm in the UK and one of the top ranked in the world has the vision of being the leading global law firm, building relationships that endure through business cycles to ensure that top companies and financial institutions instinctively turn to them for support on their most important and challenging assignments. To achieve this they believe that they must have a constant focus on their clients, a deep understanding of their markets, globally minded and committed people and responsibility and integrity in the way they interact with their communities and manage their impact on the environment. Whereas the firm Dewey & LeBoeuf LLP has filed for bankruptcy protection, a move that effectively ends what had been at its height a 1,300-lawyer global enterprise and marks one of the largest law-firm failures in U.S. history. It was clear that the above firm did not employ a strategic plan for growth within the current economic climate since the firm was spending large amounts on remuneration packages for lawyers, highlighting the importance of a strategic plan at this time.

Strategic planning is not a democratic process, it is a process by which the leaders of the firm define a vision and create a ‘road map’ to realize that vision, however many law firms according to Wesemann rely on committees to formulate their plans rather than on the heads of the law firm, a phenomenon that does not seem to happen in any other sector of the professional services market. It is also true that many law firms include a mission statement on their websites which set out their goals and their general mission, believing that this is a comprehensive strategic plan, this, however, can prove futile.  

Much emphasis is being placed on strategic planning today in firms around the globe and there are significant benefits to gain from the explicit process of formulating a strategy to ensure that policies of departments are co – ordinate and directed at the same common set of goals (Mintsberg 1994).

Stephen Mayson sets out four different levels of strategy, those of a normative environment, corporate strategy, business strategy and an operational strategy. Normative environment strategy is described as one which describes the overall purpose vision and culture that thefirm intends to have, it is the author’s contention that all firms will undoubtedly have this typeof normative environment, however it will only become a strategy per se when it is articulated specifically and not implied from the actions of the organization. Corporate strategy according to Stephen Mayson, as it relates to the legal services market, is where the organization makes choices about which industry they want to compete in or a decision regarding mergers and acquisitions of other firms. A business strategy is one that concerns how a law firm will compete within their chosen markets. Operational strategies are used once decisions are made about the normative corporate and business strategies, where a strategy is put into place in order to operate the other strategies. Stephen Mayson believes that ‘all firms will benefit from having an explicit normative strategy, but it is not essential for all firms to have a corporate and business strategy, but warns that once one is in place it must be consistent with the normative strategy.

According to H. Edward Wesemann law firms often have trouble agreeing on the future of their firm, this is especially true in situations where there are many partners, each with a different vision for the firm. Even more troubling is the fact that many law firms do not know why they are in business. Wesemann believes that many law firms focus heavily on the culture of the law mixed with their own personal interests, this is mainly to do with the fact that each partner is also a shareholder, and unlike other corporate firms, each shareholder goes into work every day, therefore it is easy for them to lose sight of the profit margins when conducting business.

According to Mintzberg, planning can also take into account the future of the firm, as stated above, many lawyers live in the moment focusing on a case by case basis and with dealing with clients. Mintzberg upon conducting a survey in the US has found that although many lawyers claim to have a strategic plan that spans over the next five years, most do not implement it and are not sure what the common goals of the firm are for the future. Nevertheless, Mintsberg believes that planning can prepare a law firm for the inevitable, for example, if the economic forecast shows a downturn a solid strategic plan will be beneficial. The plan can also prevent the undesirable and the uncontrollable (Mintsberg 1994) and by looking into the future law firms can deal with problems before they are faced with them, this according to Mintsberg is one of the major factors in the importance of developing a strategic plan.

The legal services market has changed dramatically over the years. This has certainly increased the need for firms to plan their future. The current internal market should force lawfirms to rethink their strategies in order to attract clients to their door instead of the offices next door.


There is no one perfect strategic planning model for each organization. However, each strategic plan should depend on

  • The purpose of strategic planning,
  • Whether the organization has done planning before, for example, if the organization has not done planning before, then extensive attention to mission, vision and values statements is probably warranted.
  • The culture of the organization, for example, some cultures might prefer a "linear" approach from mission, vision, values, quantified goals, strategies, action plans,      financial analysis, etc. Other cultures might prefer a more organic and unfolding approach, such as telling stories.
  • Whether the environment of the organization is changing rapidly, for example, if the environment is changing rapidly, then planning should probably be a shorter term than for an organization whose environment is fairly stable.
  • Whether the organization has had success in planning in the past, for example, if an organization has done planning in the past, but planners do not believe it was successful, then the organization should perhaps undertake a simple, short-term planning process for now.
  • The market in which the firm is competing
  • The economic environment in which it is competing.


SWOT Analysis

SWOT analysis is an established method for assisting the formulation of strategy. An application to strategy formulation and its incorporation into the strategic development process. SWOT Analysis looks at the Firm’s strengths, weaknesses, opportunities, and threats in an organized and deliberate way. The results of a SWOT analysis can vary. Some firms might decide the best course is to build on their strengths. Others might find that course of action insufficient for their purposes and devise strategies designed to overcome identified weaknesses to increase their profitability. An example of a SWOT analysis table to a law firm might look like Figure 1.

SWOT Analysis table

Figure 1.

In order to complete a SWOT analysis it is important to ask the firm certain questions, that relate to the strengths opportunities, weakness and threats of the firm. This is then studied by the heads of the firm in order to realign the firm according to above findings. It is pivotal that the SWOT analysis is not too general and that it takes into consideration the relevant market that the firm is competing in and the clients that it is targeting otherwise the firm can end up with a general analysis that ends up reiterating the normative environment of the firm and not much else.

The McKinsey 7S framework

The McKinsey 7S framework. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic idea of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements. The Soft elements are Shared Values, Skills, Style, Staff and the Hard elements are those of Strategy, Structure and Systems. Each of these elements reacts with each other to create a framework which a firm can mutually align its objectives around. Hard elements are easier to define or identify and are easy to change since management can directly influence them, such as strategy statements, organization and formal processes and IT systems. "Soft" elements, on the other hand, can be more difficult to change since they are more or less influenced by culture. However, these soft elements are as important as the hard elements if the law firm is going to be successful. Below is the structure of the McKinsey 7s Model. Each factor speaks for its self.

The model is based on the theory that, for an organization to perform well, all above seven elements need to be aligned so, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment during other types of change.

Whatever the type of change whether it be restructuring, new processes, merger and acquisitions, new systems, change of leadership, or leverage system, the model can be used to understand how the elements are interrelated. The analysis can be used in order analyse the current organisational structure of a firm and to see what needs to be realigned rather than to plan for the future, without sorting through the holes in the current system. If a firm finds after this analysis that they are tightly aligned it follows that the performance of the firm will also be greater and it will be more competitive with its relevant market sector.


Focus on Clients

One of the first steps in building a strategic plan is to take a good look at clients and focus on the opportunities and growth they offer. It is imperative to look closely at where the future of their industries is headed, it is very likely that if the regular clients of the firm are heading in a particular direction that the law firm will also want to follow suit. Not doing so could lead to losing valuable clientele and profits.

When a firm is forced to look forward it is clear that by evaluating its client base it is forced to make hard choices. The firm should make choices to invest quality time with clients who are worth investing in and make the effort to do this. Many firms now need to consider that is no longer the volume of clients that it essential, but the quality of clients. In the emerging economic climate it is clear that many customers are facing their own economic problems leading to problems in payment, this in turn is having a negative impact on the profit margin on firms. Many firms would be amazed at the amount of profit they can make with few quality clients.  

Deborah L Avaro suggests getting clients to complete a survey about the quality of the firm in order to revaluate the way the firm approaches clients. Much of the firm’s new business is from existing clients. It is so much easier to develop new business from an existing client base than it is to go out and find a new client. That is why finding out about what the clients’s trategic priorities are and where their businesses are going is so important. (Wesemann 2004).

A top partner in a US, Sheryl J. Willard firm suggests that clients needs and expectations are changing just like the economy and the political tide. Although the economic downturn has brought in an increase in litigation, this does not necessarily mean that clients are still willing to pay for the same billable hours model as before. In fact he asserts that many clients have made it clear that they are not willing to pay for associate hours. This phenomenon can also be viewed in Cyprus where although in the majority of cases billing is not based on billable hours, clients are tending to move towards demanding flat rates and retainers.

It is also necessary to keep up with the growing technology available to satisfy client expectation and need. By using social media lawyers are able to provide a more personal service to their clients through these mediums, which provides for a more personal relationship, and reassures clients, but at the same time is also less time consuming for the lawyer himself. Kerry K Brown suggests speaking at seminars for specific clients and writing and publishing articles.

Training Staff

Profitability pressures in law firms have short-circuited any creative impulses that might have led firms to different outcomes for their staff. For instance: many lawyers still struggle with practice basics like client communication, marketing, and professional development. They would benefit tremendously from a dedicated resource whose job is to manage and organize all these aspects of their career — someone who has worked with them for years and knows them very well but also has a skill set developed especially for the modern market.

Law firms could help support staff reimagine their roles, add more value to the firm, improve morale, and save jobs. Increased training and responsibility can motivate employees and allow lawyers to delegate with confidence.  Investing in the workforce in a law firm will increase staff retention rates and ultimately help you to build a positive and enhanced working environment which in turn will increase profitability.

Close unprofitable and/or non-strategic offices

Many firms hold on to unprofitable offices in the hope that the economic arena will pick up again, this not only can dent the profitability of the firm in the short run but can also hurt the strength of the firm in the long run since large debt can accrue due to the un profitability of the said offices.

Managing the costs to maximise Profitability

As Sheryl L. Willard suggests, in the current economic crisis there are many opportunities to bargain with suppliers and or landlords in order to reduce rent and or costs of services. Thisis something that a law firm should be taking advantage of. As Willard comments, it is often very difficult to know where to look to cut costs, and most firms look to the short term solution of cutting the costs of staff and associate lawyers, this can lead to a detrimental effect to the bottom line, since not having enough personnel to carry out the services can affect quality of work and therefore profitability.

Keeping Rainmakers Happy

Joseph D. Carruth a partner at Rutan & Tucker LLP has found through experience that not all lawyers in the firm are rainmakers, in other words produce exceptional quality work and are every productive. It is his suggestion that these individuals must be encouraged through the use of compensation plans to reward them for their productivity and growth. If these lawyers are satisfied, not only do firms develop their skills further but they are also less likely to look elsewhere for a better remuneration package, and thereby the firm losing its most valuable assets. The future of a firm depends heavily on the young lawyers who do the leg work for the partners in the firm, investing time and energy in them as part of a long term strategy will be profitable for any firm in the long run.


Branding the firm can be considered very essential, this can be done through taking on a particular type of client or taking on a particular specialty area solely. However it must be remembered that Cyprus has a population of one million and limiting the client pool in this way can have a negative impact on revenues and subsequently profitability. Although if a firm wished to brand itself it would be easy to do so by way of word of mouth. In other international law firms branding according to Joseph D Carruth has become an intrinsic part of the marketing strategy and of the strategic planning as a whole.

Less Talk, More Action

Too many law firm’s strategic business plans focus on creating the strategic plan, but ignore the follow-up. The key, according to Wesemann to putting a strategic plan in place rests in the hands of the firm’s leadership. If top management doesn’t work to keep the plan going, then it will not succeed to drive the

Putting together and enforcing a strategic plan can be extremely effective. “It’s a trap to say you’re really busy now and you don’t have time for this,” says Armstrong, “you may find out by the time you get through being busy that the skills you have are no longer relevant.”


Many lawyers feel that the planning process is completed when the strategic plan is finished and documented. However, nothing can be further from the truth - the real test of strategic planning and the real proof of its effectiveness come in its implementation and the actions that are taken to carry the plan out. The organisation and implementation of any strategic plan is the most difficult element of the planning process and the one on which too little attention is usually placed by the managing directors. When a strategic plan fails, a managing director usually turns to the lower level employees to blame for not implementing the plan effectively, where as the head of any law firm should consider this as a factor when drawing up any strategic plan. The law firm is not like any other industry that is focused solely on business and too little time is available to implement any type of business strategy,especially for the key partners of the firm who are bringing in the revenue. It is suggested by many commentators that a chairman or a managing partner should be put into place in order to realise any type of strategic plan and in order to ensure that lower level employees are doing what they are supposed to in line with the firm’s goals and common objectives. It is also true that there is a feeling amongst lawyers that there is a resistance to any type of strategic change, since lawyers are not considered to be business people, but experts in the field of law.

Nevertheless it is felt that the person in charge of implementing the strategic plan must make a personal and visible commitment to ensuring that the plan is accomplished but more importantly any implementation must be planned as is described above through the fourth level of planning, even if the firm simply adopts a normative strategy.

In order to achieve this it is suggested that firms assign specific responsibility for implementation activities to individuals in the firm and consistently refer to the plan, thestated direction of the firm, and its values, in internal speeches, communications, andinteractions.


CYlaw Firm

CYlaw firm is a lawyer limited liability company registered in Cyprus and regulated by the Bar Association since 2010. Their head office is located in Nicosia, the capital and the commercial centre of Cyprus and the home of many international entities. The firm also has offices in Larnaca and Paphos. The firm operates on a departmental basis, providing a wide range of legal services covering most aspects of law. Apart from the range of services offered by the office in Nicosia, extensive facilities are provided by the offices in Larnaca and Paphos. Each office is fully staffed by licensed and experienced lawyers who advise a wide range of clients in various legal matters including corporate and commercial law, business transactions, banking law, joint ventures, employment law, construction and sale of land agreements, administrative law, European and international law. They also conduct all types of litigation using the services of advocates within the company. As stated in their mission statement their mission is to advise and represent their clients on a flexible term basis. [Their] commitment is to achieve the best result in any given situation for [their] clients in a personal, thorough, timely, professional and responsive manner.’ Their firm provides its services through two main departments, the Business and Corporate Department and the Litigation and Dispute Resolution Department. The company consists of 5 higher ranking partners who also hold a 20% share stake in the firm, 5 junior associates, 2 senior associate, 2 corporate administration staff and 6 support staff such as receptionists and legal aids. The firm does not employ a single methodology for remuneration but remuneration is based on years served or a random based method according to the partner who is hiring at that particular time, rather than productivity and profitability.  

The organizational structure of the firm entails of a senior partner who is responsible for the day to day running of the firm and a partner who is responsible for all employees. The other three partners do not have an official role in the administration of the firm. The Partners hold random meetings between themselves in order to discuss the firm’s progress and the firm’s solutions to its problems. At present the firm does not employ a strategic plan and has never implemented one. The company’s main concerns are the economic climate and bolstering of revenues.  

Below is a table which shows the profit per partner of CYlaw firm for the year ending 2018. The below table shows the profit that each partner brings into the firm based on their own cases and own client list.

It is clear from the above data that some partners in the Firm are achieving greater profitability than others, and some are producing disappointing results. It is also clear from the above that the expenses of the firm are exceedingly high and that this is having a negative impact on the profitability of the firm.

CYlaw requires a plan to increase its profitability and reduce its expenses. Using the methods explained above CYlaw will develop a strategic plan.

In order to prepare to implement the 7 step test one must ask the following questions:

  • Is the firm name is recognizable in the community?
  • What is the mission of the firm?
  • What are the three core values firm?
  • What attracts and retains clients to the firm?
  • What attracts and retains employees?
  • Outside of our current practice areas are there other practice areas that could complement the current practice having in mind the client base?
  • What is the image they want to project in the market?
  • Who are the closest competitors and how the position of the firm in comparison changed in terms of size, economics, and reputation in the last year?
  • What size should the firm be in 1 year and 3 years?
  • What should the targets be in terms of revenue and partner compensation?
  • What should be the strategy for acquisition and use of technology in the practice?
  • What is the strategy for market/recession?
  • How can we train our staff in order for them to be able to contribute more to the firm?
  • How can I hire paralegals in order to decrease expenses on wages and still retain highly knowledgeable staff?
  • What are the main weaknesses the firm should focus on?

After asking the above questions and documenting the answers of the senior partner of CYLAW it was necessary to draw up the McKinsey 7 Step Model, as shown below:

Analysis of 7s steps test for CY LAW.

The above analysis shows that CYlaw is not a tightly aligned firm. This is proven by the fact that the organisational structure of the firm i.e. the partners who can make central decisions do not support the development and or hiring of people with the right skills needed to allow for the success of the central goal i.e. to ascertain more complex premium work for premium clients. The style of the company also does not complement the skills needed and in turn the staff to allow for expansion into emerging markets and to concentrate on core practice areas which in turn will complement the direction that existing clients are going in. In addition, there is no method of measuring the productivity of lawyers in order to achieve the goal of compensating ‘ rainmakers’ based on their productivity and in turn to increase the profitability of the firm. The central management is also not making use of the resources it has within its own employees and is not giving them incentives to grow within the firm. Furthermore, efficiency in management practice cannot be achieved by not devolving managerial issues and by allowing for a purely central based leadership.

The key values of the firm are quality, innovation and new level of service, all of which as a basis of normative strategy cannot be achieved when analysing the above model. In addition the corporate and business strategies of the firm represented under the title ‘ strategy’ will be impossible to achieve if the company continues to practice in this way. Therefore when considering the analysis of the Mckinzey 7 step test it is clear that CYlaw must employ a strategy to facilitate the growth of the firm in line with its objectives, goals and visions.

It is suggested that CYlaw starts by conducting client surveys which will cover an in depth analysis of how the client views the firm. For example the firm could ask closed ended questions like ‘please rate the quality of our work on a scale of 1 – 10. If CYlaw is very serious about increasing profitability of the firm and developing client relationships these closed ended surveys can be followed up with a telephone interview where any problems that have arisen can be reassured. We have seen from the above literature that client relationships and opinion is an extremely important factor. CY law could also review its client list, by sifting through the clients and making the hard decisions to get rid of the clients who are not generating revenue which in turn will allow the firm to reduce costs. CYlaw could also benefit from this by identifying, investigating, and documenting the major trends and issues influencing the future of key market and providing a service for that market.

Upon considering the profit per partner ratio which is shown above it has been illustrated that the firm is confronted with unproductive partners and unproductive departments. CYlaw must make a decision to get rid of these two factors in order to have any hope of success in a turbulent market.

CY law must maintain an eye on external focus, consequently on its clients, potential clients,and client needs and not merely on the internal factors which are inhibiting the growth of production. The firm must also ensure wide partner input and participation both in the day to day business of the firm but also in the implementation of the strategic plan. It is extremely important that the firm focuses on the core values of the firm and that all partners have the same vision for the firm, so that implementing a plan can be simple.

Upon reading the relevant literature it is clear that the strategic plan must be kept simple and easy to understand, preferably on one page, so that all members of the firm can understand it and so that it can be communicated effectively. It is imperative to develop along with the plan a way of implementing it, therefore, giving responsibilities to certain people to execute the plan has been suggested as the best way.

CYlaw may want to consider a strategy of changing their prices and the way they bill clients, this factor is inextricably linked to the firm’s attitudes towards clients, but as seen above it is clear that in the current economic climate money is the first thing on customers mind. By developing a competitive billing package CYlaw could gain an advantage in the market. Some firms are using ‘time accounting’ where lawyers track all time spent in the office. For example if a lawyer is in the office for 10 hours a day he will be expected to account for that time. This will undoubtedly increase productivity which in turn will increase revenue. In addition, If CYlaw were to brand itself in a particular area of law it could increase profitability in that area.

CY law will benefit from hiring more experienced litigators and qualified lawyers who will be able to produce more quality work and will in effect be the ‘rainmakers’ of the firm. In addition, by training current administrative staff CYlaw will be able to take advantage of an untapped resource that has been there all along. Training secretaries in a particular area of law or training secretaries to become paralegals is the easiest and safest way to ensure the firm has the right people for the right jobs.  In this way the firm will be able to realign their staffing, style and skills with the firm’s strategies as outlined above.

Cost Containment is another factor that CYlaw should consider upon analysis of their expenditure in 2013. Keeping overhead costs down can increase profitability to a large extent but this should be done without redundancies to avoid the negative effects that this can produce. Since leveraging according to the literature is one of the most effective ways of increasing profitability i.e. devolving work to lower ranking associates. CYlaw must try to set itself apart from other law firms on the island, and understand that it is not the size of the law firm that counts but the volume of work and subsequently the revenue and profit per partner that that work brings to the firm.


A strategic plan in many countries in the legal professional services market has widely been accepted as the norm. However, in the Republic of Cyprus, where this research was based,a strategic plan is somewhat of a novelty for most firms. The main conclusions drawn from this research were that current approaches to strategic plans in Cyprus are not in line with those found within the literature and those proposed by successful lawyers in the UK and the US. Despite this there is optimism in the growing field of the legal profession where the larger legal firms are expanding and changing their attitudes towards clients, expansion, hiring and technology in an effort to increase profitability.