The Advantages of Having a Niche Law Practice

My son broke his arm on the last day of school (while in math class–don’t ask!). I spent three hours on the phone trying to find an available orthopedic surgeon to put a cast on it, even though my son’s pediatrician told me that her physician’s assistant could easily handle it.

Why am I sharing this with you (other than to confirm the impression that I’m a neurotic mother)? Because it has a lot to say about whether you should have a "niche" for your practice.

When it comes to doctors, most people want to go to a specialist, not a generalist. Nobody trusts brain surgery to a general surgeon. Increasingly, clients feel the same way about their lawyers.

You may feel having a niche is a risky strategy because there may not be a large enough audience–which could translate into having too few clients or not being able to make enough money. Or you may feel that focusing your practice narrowly will be boring.

When I first suggest to clients that they have a niche, they often express similar concerns. But they soon find the advantages to having a niche far outweigh the possible disadvantages. Here are some advantages:

• You’ll face less price sensitivity. People pay for expertise. I’m sure I paid more for the orthopedist than I would have for the physician’s assistant’s services. This equates to potentially higher rates for you, which will more than make up for a smaller pool of potential clients.
• You’ll have less competition. Generalists have to compete with all the generalists and all the specialists out there. Specialists have far fewer people they are competing against in their specialty. Think of the difference between the number of general commercial litigators versus the number of litigators who specialize in litigation involving long-term health care facilities.
• Marketing becomes simpler. You’ll clearly see where to focus your efforts when you have a niche. Identifying the potential clients that might be interested in your services becomes much easier. You can easily determine what they read, the conferences they attend, and where they network. Also, your marketing message becomes much clearer, since you can picture the exact person to whom you are marketing and what that person’s needs and situation are and tailor your message accordingly. You’re no longer "marketing to the world," but rather to a defined, relevant audience.
• You become an expert. The more of a particular type of matter you handle, the more you know. It increases clients’ confidence that you are the right person for the matter. As a related benefit, it also increases your confidence–which translates into more effective marketing. Finally, your increased expertise is likely to result in better results for your clients. This in turn leads to more satisfied clients, who are more likely to use you again or refer you to their colleagues.
• Prospects and referral sources remember what you do. One of the greatest challenges in marketing is maintaining what advertisers call "share of mind"– being remembered as a potential provider when a need arises. Think of how many general commercial litigators an in-house counsel meets in a year. Now think of how many people they meet who focus their practice in a particular niche–be it premises liability litigation or water rights litigation, for example. Your specialty creates a clear (and, hopefully, lasting) picture in the minds of potential clients about what you do. If they need or hear of someone who needs what you do, you will stand out. You become the "go-to" person for particular types of matters.

How to Approach Developing a Niche

Once you’re convinced of the advantages to developing a niche, there are several approaches to help you define your niche:

• You can focus on a specific substantive area of law: medical device product liability litigation, advertising law, consumer class actions, software licensing, outsourcing.
• You can focus on a particular industry segment: academic medical centers, the hospitality industry, automobile dealers, family-owned businesses.
• You can focus on a specific demographic: geographical location, gross revenues, size of workforce, or other business factors.

If the concept of niching your practice is scary, remember there are a number of ways you can protect yourself from being foreclosed from too many opportunities. You can have more than one niche, or you can do work outside your niche when times are slow. Having a niche is about where you focus your marketing, not about how you spend your day.

There are many benefits from having a clearly defined niche. Take some time to think about how you can refine the description of your practice more narrowly. It’s worth the risk.