Building a Niche Law Practice

It’s no secret that the legal marketplace is in turmoil. The combination of tight-fisted consumers, an oversupply of lawyers, and increased competition from nonlawyers has created the perfect storm in the legal market. In this competitive environment, lawyers must distinguish themselves from the competition in order to claim a bigger piece of the pie. One way to do this: Build a niche law practice.

What Is a Niche Law Practice?

Put simply, a niche practice is a focused practice. Niche practitioners don’t try to be all things to all people. Instead, they focus their time, energy, and marketing efforts on a discrete segment of the legal market.

There are several ways to carve a niche out of the broader market. Some niche practices focus on practice areas, such as bankruptcy or personal injury law. Others focus on demographics, such as age, gender, occupation, income level, ethnic background, or marital status. Still others combine both practice area and demographic considerations—say, immigration law for athletes or estate planning for high-net-worth individuals. But in each case, the practice is focused on a distinct market segment.

Different attorneys have different approaches to specialization. There’s the generalist who takes everything that comes through the door (defend a dog-bite case on Monday, prepare a will on Tuesday), the ultra-specialist who does one thing only, and a range of practices that fall in between. How do you decide whether a niche practice is right for you?

Benefits of a Niche Practice

I believe that niche practices are a smart choice for most attorneys. Although there are a few potential downsides (discussed next), they are far outweighed by the benefits. Here are a few reasons why you should consider a niche practice.

A niche practice allows you to focus on the work you find most enjoyable. 

Law licenses are necessarily general. As a member of your state bar, there is a broad range of legal work that you could do and people whom you could serve. But not all practice areas are equally fulfilling, and not all people are ideal clients. Generalists can find themselves stuck doing work they don’t enjoy for people they don’t like.

A niche practice allows you to do the work you enjoy for the clients you like. You are in control. Decide on the work you like and/or the clients you want to serve, then develop a practice that fits the bill. As your practice grows, you can weed out the work that you don’t enjoy and build a more rewarding practice.

A niche practice can be more profitable than a general practice. 

There are two ways to make more money in your practice: Raise your profit per client or increase your new client volume. Being the go-to person in your niche can help you do both.

Niche practice can help raise your profit per client by demonstrating expertise. Many clients will pay a premium for a specialized skill set. If you are a recognized expert in your niche, you are more likely to land these high-paying clients.

Sometimes more profit per client is not an option. In some practice areas, for example, the demand may be elastic or fees may be capped. In these situations, you will need to ramp up your client volume before you can make more money. You have a better chance of getting more clients if you are known for specialized expertise.

Profitability is often a function of efficiency. If fees are fixed, the attorney who can do the same work with the least time or overhead will have the highest profit. Attorneys who work within a niche usually become very efficient at what they do. General practitioners, by contrast, are likely to spend more time on a matter than a specialist would. This can result in either overcharging the client or writing off time. These inefficiencies are avoided in a niche practice.

Attorneys with niche practices are also better able to weed out bad leads and focus on clients that will be more profitable. Because they know their niche, they know what matters are and are not a good fit for their firm. The ability to spot bad clients or cases before agreeing to representation can prevent much hassle and wasted time.

A niche practice is an easier sell than a general practice. 

Being able to clearly and succinctly summarize your firm’s value proposition is the key to effective marketing. It differentiates you from your competition and gives your ideal client a reason to choose your services.

The more general your practice, the harder it is to develop a value proposition that will set you apart from your competition. You become one of many attorneys who handle all kinds of matters for all kinds of people. The potential client has no incentive to choose you over anyone else.

A niche practice helps you speak to the specific clients that will get the most benefit from your specific services. When your core marketing message appeals to a potential client’s decision-making drivers, you stand a better chance of landing that client.

Downsides of Building a Niche Practice

So why would anyone decide not to build a niche practice? Let’s take a look at a few of the most common arguments against niche practices.

A niche practice can be more volatile than a general practice. 

Niche practices are less insulated from market risk than general practices. A change in law or market conditions can swing the supply-demand pendulum in the wrong direction. Niche practices can deteriorate quickly when the market changes, such as when the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 decreased short-term demand for bankruptcy attorneys.

By contrast, general practices are less prone to market risk. If demand drops in a particular market, the remaining practice areas will keep the ship above water while riding out the storm. Of course, less volatility has its own downside. General practices are less volatile precisely because they are less focused, and an unfocused practice can be a hard sell.

A niche practice can be less interesting than a general practice. 

Some attorneys thrive on the diversity that comes from a general practice. To effectively serve a broad range of clients, the attorney must keep learning. Each week is a new adventure. This intellectual stimulation keeps life interesting for general practitioners.

Whether this is a good thing depends on your perspective. Some would argue that a general practice sacrifices depth for breadth, requires too steep of a learning curve, and carries more malpractice risk. There’s no question that it is harder for the general practitioner to develop deep expertise in a specific niche.

A niche practice may not be economically feasible in your geographic area. 

Some attorneys are simply not in a market that will support a narrow niche. If you want to develop a niche practice but find that the local market won’t support it, you have only two choices: You can accept the fact that you will need to have at least a somewhat general practice, or you can cast a wider geographic net to help support your niche practice. With the communication technology now available, the latter choice—casting a broader geographic net—is more feasible than ever.

And a niche practice need not exclude you from working outside your niche in your geographic market. In fact, some attorneys find that focusing on a narrow niche brings them additional work in other practice areas. Attorney Kristen Marks started My Pink Lawyer to focus on the estate planning needs of women aged 30 to 55. She found that the more she “niched down” on her target market, the more her overall business level increased. “I am speaking directly to those people within my target market,” says Marks. “They are more likely to reach out to me because they feel I am speaking directly to them and their needs. Ironically, it also hasn’t turned off the single guys from reaching out to me for their estate planning needs. Go figure!”

How to Choose Your Niche

Choosing a niche is about matching your interests and expertise with a segment of the market. Before you launch your niche practice, you will need to think strategically about (a) whether the niche is the right fit for your personal qualifications and interests and (b) whether the niche is economically viable in your specific geographic market. This analysis will require both self-evaluation and market research. Here’s a four-step process to get you started.

Step one: Identify your professional strengths and weaknesses. 

To competently and efficiently meet the needs of clients in your niche, you need specialized expertise. It makes sense, then, to choose a niche that matches your strengths.

Attorney Susan Cartier Liebel, founder and CEO of Solo Practice University (solopracticeuniversity.com), believes that prior experience is more important for some niches than others. “If your niche is a specific type of personal injury like Vibrio vulnificus food poisoning cases, then you need significant experience in personal injury law and an established practice before you can practice this exclusively,” says Cartier Liebel. “However, if your niche is divorce law for Hispanic members of the armed forces stationed in Virginia, then it is a demographic niche and success is determined by targeted marketing. This type of niche can be started as soon as one is comfortable with the basics of dissolutions in Virginia.”

Although you can always acquire expertise if you don’t already have it, you should think about choosing an area in which you have at least some experience. This is important not only to effectively serve your clients, but also to be sure that you enjoy working in the niche before taking the leap.

You should also take a hard look at your weaknesses. If you plan to start a practice focusing on the needs of Cuban immigrant–owned businesses in Miami but can’t speak Spanish, you might want to reevaluate your practice area. If you hate working in high-emotion contexts, a divorce practice might not be for you. An honest evaluation of your weaknesses can save you from choosing a niche that isn’t a good fit.

Step two: Identify any personal factors that help you speak to your niche. 

When it comes to choosing a niche, life experience can be as important as professional expertise. Some attorneys build niche practices around meeting the needs of people with similar experience, life stage, hobbies, interests, sexual orientation, or religion. At a personal level, a niche practice based on shared interests or values can be intrinsically enjoyable.

Marks started My Pink Lawyer after a six-year hiatus to focus on mentoring and coaching women. Given the life experience that she shares with her target market, her choice of niche was only natural. “It’s been my experience that women, in particular, often feel intimidated by the legal process and attorneys,” says Marks. “As a woman and mother myself, I can relate to other women and moms and the estate planning and guardianship concerns they have for their families.”

Step three: Identify your ideal clients. 

To market a niche practice, you need to be able to speak to your target audience. And to do that, you need to be able to clearly identify that audience.

Marks’s marketing efforts are closely tied to her niche focus. “Once you understand who your target market is for your clients, it’s very easy to discern where to devote your marketing efforts,” says Marks. “Since my target market is women between the average ages of 30 and 55, I reach out to them on social media and women’s magazines and forums. I don’t spend a dime on any paid marketing that is not going to primarily reach my target market.”

Past experience is a great way to identify your ideal clients. What clients have you enjoyed working with the most? Which have been the most profitable? Once you have identified your best clients, look for common characteristics. What makes them tick? What interests, hobbies, and passions do they share? What challenges do they face? What needs do they have? Why did they choose you over your competition? Chances are that others with the same characteristics could benefit from your services.

Step four: Conduct market research for all potential niche practices you have identified. 

Once you’ve compiled a list of potential niche practices, it’s time to begin market research. Is there enough demand in your geographic market to support your niche practice? How much competition will you be facing? What competitive advantages distinguish you from your competition? The answer to these questions will help you evaluate whether your niche practice is likely to succeed.

Start by defining your geographic market. Where can you reasonably expect to find and serve your clients? If you practice in an area that requires frequent court appearances, for example, your geographic market may be limited to an easy driving distance from your office. On the other hand, if you practice in an area that transcends state borders and doesn’t require court appearances, your practice area might include the entire nation.

Once you have honed in on your geographic practice area, you need to determine whether there is sufficient demand in that market. If you have already practiced in that market, you may be able to draw from your own experience. Otherwise, you will need to look at what others are doing. For example, you might:

• Read the Yellow Pages or search online for competitors that are offering similar services to your target market. If they can do it, you can do it, too.
• Use a keyword tool like the free Google AdWords (adwords.google.com) to find out how many people are searching for the services you provide in your geographic area. A healthy search volume usually indicates solid demand.
• Read magazines or blogs that are targeted to your ideal clients in your geographic area. If people are paying for advertising in those publications, chances are that they are seeing at least some results.

If you determine that there is a demand for your services in your geographic market, take a closer look at the competition. Ideally, you will find a moderate level of competition—enough to reaffirm the need for your services, but not an oversupply of lawyers. If you see no sign of competition, it could mean that there is low demand or that you are the first to discover that niche in your market.

Small Choices, Big Rewards

Once you’ve identified a few potential niches and analyzed them in light of your market, there’s a good chance that you will find that a niche practice is within reach. Building that practice will place you ahead of the curve and give you a more profitable and rewarding practice.