Christos Scordis: The current, self-imposed, limitations of the legal profession are detrimental to lawyers and allow other professions an unfair competitive advantage

Self-imposed limitations on the legal profession are detrimental to lawyers and allow other professions an unfair competitive advantage, Christos Scordis Senior Partner, Scordis, Papapetrou & Co LLC suggests.

In a recent interview about the state of the country’s legal sector, he elaborates that while the legal industry has been known to sometimes be resistant to change during its long history, "The future lies in being able to offer as wide a service to clients as possible, under one roof."

Scordis notes that while this inevitably means consolidating, lawyers must also be allowed to compete on an equal footing with consultants, advisors and service providers from other professional groups.

"Unfortunately, as we have publicly stated in the past, the current, self-imposed, limitations of the legal profession are detrimental to lawyers and allow other professions an unfair competitive advantage," he points out.

Scordis also suggests that the different characteristics of each part of the professional services sector would make a single authority difficult.

“In our view, the wrong perceptions of the country need to be addressed but they do not stem from the existence of separate supervisory authorities for each profession,” he explained.

Scordis went on to note that Cyprus’ regulatory and supervisory framework is already stringent and well-enforced while the country also regularly ranks high in terms of compliance.

He continued, “One must not forget that, while there is convergence in efforts to provide one-stop services by different professional groups, each profession has its own distinct characteristics which need to be taken into account and a single authority will certainly not be able to appreciate or accommodate these. “

Among other things, Scordis also shared his thoughts on other challenges experienced by Cyprus’ legal sector today, as well as how these challenges are being handled., and the e-justice system.

Other industries are taking market share from law firms by providing ‘one-stop solutions’ to clients. Do you foresee this trend driving consolidation within the legal sector? Can law firms adapt to this competitive landscape?

The legal profession has a long, conservative tradition and history and is sometimes resistant to change. In our view, the future lies in being able to offer as wide a service to clients as possible, under one roof. This inevitably means consolidating but also being allowed to compete on an equal footing with consultants, advisors and service providers from other professional groups. Unfortunately, as we have publicly stated in the past, the current, self-imposed, limitations of the legal profession are detrimental to lawyers and allow other professions an unfair competitive advantage. This is a matter of ongoing debate within the Cyprus Bar Association.

The Finance Ministry plans to introduce a single authority to supervise the whole of the professional services sector, as part of broader efforts to improve the country’s image abroad. What are your thoughts on this?

In our view, the wrong perceptions of the country need to be addressed but they do not stem from the existence of separate supervisory authorities for each profession. The regulatory and supervisory framework applied in Cyprus is already stringent and zealously enforced, at least by the legal professional body. In terms of compliance, Cyprus consistently ranks higher than, or at least equal to, other jurisdictions (which here in Cyprus we may regard as benchmarks). From our experience, clients already using other western jurisdictions for their activities find it difficult, expensive or impossible to do business in Cyprus, with obvious negative repercussions for the country as a whole. Lastly, one must not forget that, while there is convergence in efforts to provide one-stop services by different professional groups, each profession has its own distinct characteristics which need to be taken into account and a single authority will certainly not be able to appreciate or accommodate these.

Further to the above, what strategies should be adopted if a substantial rebranding initiative is to be undertaken with the aim of restoring Cyprus’ reputation within the international business community?

Continuing from the point I have already raised, perhaps first of all we should be more confident in asserting our own standards and expertise and be proud of the businesses that, for many years, have chosen to invest in, or operate in or through, Cyprus. The greatest ambassadors in the international business community are those businesses and investors that have already come to Cyprus, especially those with a long history. It is therefore imperative for all stakeholders and the authorities to ensure that any strategy must respect and defend its good track record. Bad news, scandals or negative publicity are inevitable, afflicting all international business centres in equal measure, and will always exist, regardless of what we do. This is, indeed, the case with countries that we may locally regard as benchmarks or ‘above board’. Any rebranding exercise should thus isolate the negative publicity and scandals for what they are and not fall into the trap of painting everything and everyone with a broad brush, thus inadvertently stigmatising all those businesses which have entrusted Cyprus so far. If we do that, these innocent businesses will become our worst ambassadors, negating any rebranding initiative.

Let’s move on to the failed rollout in January of the e-justice system. How did the profession react to this setback and how has it affected your firm’s operations in particular?

The implementation of the e-justice system in Cyprus was a long-awaited and essential step towards the modernisation and greater efficiency of the legal sector. Thus, its postponement, due to serious technical deficiencies, certainly caused disappointment to the profession as well as complications in the operations of the courts, the court registrars and law firms. However, swiftly reverting back to i-justice as a temporary solution was welcomed as it provided a functioning fallback. Despite the challenges, our firm, drawing on the significant experience of our court team (both lawyers and paralegals), swiftly adjusted to each of these events (and missteps), ensuring a smooth handling of the cases of our clients and prompt filing of court documents by implementing solutions and tools.

Macroeconomic challenges and geopolitical strife have led to the contraction of the local industry in recent years. How do you assess its present state?

The industry is still in a stage of transition and it will take years to ascertain whether it can fully rebound. For a long time, due to the great number of international companies operating via Cyprus, quite a few cross-border matters had a Cypriot legal element, whether in contentious matters directly or indirectly litigated in the courts of Cyprus, or in non-contentious matters requiring Cypriot legal advice, drafting or legal input. Often, the nature of the transactions or disputes required a high level of legal skills and helped the profession progress. Currently there is still substantial residual work related to relocation or redomiciliation out of Cyprus, as well as new engagements from clients and groups newly attracted to Cyprus for relocation. However, the residual work will inevitably dry up, while new business currently related to relocation is of a different nature and it is not known whether, in the long run, it will be able to generate a similar amount of work for the profession or require the same broad level of expertise to support the industry as a whole.

Given these challenges, are Cyprus law firms identifying and pursuing new revenue opportunities by tapping into new markets or introducing new service offerings?

As a firm, for more than 30 years we have been at the forefront of tapping into new markets or introducing new service offerings. We were among the first – if not the first – to set up representative offices in foreign jurisdictions and to expand the scope of our services beyond the narrow path of a traditional law firm. We continue to do so, adapting to and thriving on the challenges. One way forward is by offering new lines of service to existing and new clients. In this respect, we firmly believe that Cypriot law firms are well-placed to operate as multi-disciplinary practices by offering one-stop services to companies and individuals operating in or via Cyprus and to compete on an equal footing with international teams operating similar models, always in line with the limitations and ethical rules applicable to our profession.

This interview first appeared in the August edition of GOLD magazine. Click here to view it.