Douglas McPherson, director and business development consultant at Size 10 ½ Boots, highlights the benefits of a niche strategy and how to use this approach to develop a more successful law firm
Pushed by pricing pressures and a need to keep pace with technology and increasing client demands, more and more small and mid-sized law firms are rethinking their business models.
While some are relenting to the merger offers from larger firms promising increased financial security, there is an alternative.
Many firms have found that targeting particular sectors – either as a firm, a department or even as an individual practitioner – is helping to reduce competitive pressure and increase the efficiency of their marketing efforts.
"Aiming to be the market leader in your chosen niche is a strategy that works for businesses of every kind – including law firms"
John Seigal, Managing Partner, Clintons (entertainment and digital media sector specialists)
Why go niche?
There is a belief in some law firms that to differentiate yourself, you need to find the one thing that makes you totally unique in the market. But there are very few firms for whom this is a realistic objective. Is there really something that no other firm currently offers?
Instead, work out what you do best and where the real opportunities lie, then develop your offering to maximise the opportunities presented by both.
Developing your practice along sector lines is one of the best ways to do this. It enables you to set yourself apart from the generalist law firms that try to be all things to all people.
The increased focus gives you an immediate marketing edge. Instead of being just another law firm claiming to offer legal expertise and great service, you can legitimately claim to really understand those particular clients and their personal or business needs. You'll talk their language, use the right points of reference, understand their problems and know how to deliver the solutions and, by extension, the outcomes they want.
You can streamline your marketing. As you are chasing a more limited list of potential clients, you can develop a more effective, more defined marketing plan that achieves a higher conversion rate, with less effort and at lower cost.
A specialist can work faster and better than a generalist. So you can charge a premium for the additional value you offer.
"Clients appreciate a real specialist who can immediately give an authoritative answer, rather than going away to research an article or check with a colleague"
Peter Wright, solicitor and MD, Digital Law (digital law specialists)
Many lawyers struggle with the idea of focusing on a sector because they think they'll miss out on opportunities or even lose existing clients altogether. Neither is true.
As far as existing clients go, there's no reason to stop working with them. You already have the expertise and relationship. As long as you continue providing quality advice and service, there's no reason for them to jump ship.
Equally, if someone refers a potential client who doesn't sit in one of your chosen sectors, that is still a strong introduction. If that potential client believes you can provide the right advice and are the right 'fit' and they are willing to have that conversation, they will still make a great new client.
There is also a mistaken belief that sector marketing is a direct route to conflict. While there are of course always going to be some exceptions (eg local arch-rival businesses are unlikely to want to use the same law firm), the fact is that the majority of sectors take heart when they see you have a long list of clients in a specific area. They greatly value your extensive experience of working with people just like them.
"Developing a niche isn't about missing out on opportunities – it's about being in a better position to seize the opportunities you are targeting"
James Kerr, head of professional indemnity, Travelers
Finding your niche
Choosing the right sectors from the start is pivotal to your success.
- History. Look at your existing client base and determine where you already have defined groups/industries/types. This will give you an invaluable head start – you already know and understand these groups and have the reference points, examples and vocabulary you need to market yourself credibly.
- Opportunity. Which sectors offer real growth potential? Avoid sectors that are about to change or disappear altogether. Similarly, be realistic about the level of competition; if an area of interest is served by well-established competitors, it will be a tough nut to crack.
- Interest. Even if you have a minimal client-base in a particular area today, if you have several fee earners with a real enthusiasm for an area, this is often enough to get a sector group up and running. Genuine personal interest can drive progress harder and faster than the two previous criteria.
"Reorganising your website by sector – but still trying to win clients across the board – isn't a niche strategy. You have to make choices"
Ed Turner, managing partner, Taylor Vinters (innovation and entrepreneurs specialists)
Sector marketing isn't just for commercial practice areas
It's often felt that sector marketing is only applicable to commercially-focused practice areas. But that is not entirely true.
Private client practices' marketing efforts often fall down because their targeting is too woolly, relying on vague terms such as 'high (or ultra-high) net worth individuals'. That isn't really a niche, it is arguably more an expression of the level of fees the firm wants.
When choosing groups to focus your marketing on, be more specific. Ask yourself what expertise your private client lawyers have, what types of client they have had the most success with and who lives in the local area. Think about specific client segments like young professionals, or specific national groups prevalent in your local area, rather than just practice areas like wills or family law.
Any well-represented group could present growth opportunities. For example, targeting the local postcodes that boast a higher per capita income or a particularly commuter-heavy population. Or, using social media, you can reach your target prospects through common-interest groups such as cyclists, cooking enthusiasts or young farmers.
Groups like these tend to be tight-knit. So they are likely to become an excellent source of referrals as they will know, socialise with, and influence people just like them. Moreover, your efforts should also provide a natural opening to offer private client services to the owners and directors of your commercial clients and prospects.
Aim to build a full-service offering tailored to each group's particular needs. For example, professionals may be looking towards selling on their practice or exiting their partnership structure. Farmers will be concerned with handing the farm on to the next generation, a particularly knotty issue when there are multiple children interested (or, often, disinterested) in taking the reins.
Sector-focus = marketing-focus
Focusing on a sector makes marketing much easier.
For a start, it's much easier to find out what you want to know – what's going on in the sector, what the key publications and events are and who the most important organisations and influencers will be.
Networking immediately works better. You can attend, speak or (if budgets permit) sponsor the events attended by your targets. Instead of being just another lawyer at the Chamber of Commerce event, you could well be the only lawyer at an industry association meeting. Instead of meeting a cross-section of the business community, you will meet a concentrated collection of people, all from your target market.
Instead of resorting to small talk, you talk about what interests them. You empathise with their pain and are excited by the opportunities in their sector. They see that you understand what matters to them and, more importantly, that you are qualified to help.
In terms of editorial coverage, you know what publications (and websites) your targets read. More focused media are much more likely to value your contribution as what you write can be tailored to your targets' interests and issues and to solving the particular legal issues that apply to them.
The same principles apply to your online presence. Social media interactions and more savvy use of sector-specific terms in your SEO will help you stand out and either connect with, or be found by, your target audience. Instead of being just another law firm buried in the Google search results, you will be at the top of the list on page 1 when potential clients search for a specialist.
Counter-intuitively, a niche focus can help with referrals. Ask a client for any introductions and they don't know where to start. Ask them to recommend any businesses in your chosen sector, and it's much easier for them to come up with suggestions – and to trust that they are doing their contacts a favour by putting you in touch.
"Specialist lawyers who focus on what they really enjoy often make better presenters and better all-round networkers. Their knowledge and passion make a great impression"
Peter Wright, solicitor and MD, DigitalLawUK (digital law specialists)
To ensure your sector efforts deliver the levels of return you want them to, you need to make sure all of your practice areas are represented within your sector teams. Even if your relationship has only come from the client's experience with one practice area, if that experience is positive they will start to trust you as a sector specialist. From there you can start to introduce your other services and grow your relationship.
In firms where partners run practice areas semi-autonomously and are focused on personal fee-maximisation, this can be a major challenge.
But failure to get buy-in from those partners can hamstring even the most enthusiastic sector teams. So put maximum effort into getting that buy-in from the start.
The promise of new work from new clients (with minimal effort) thanks to your cross-selling efforts should be a compelling argument. Success stories are another proven way to persuade people to participate. If you openly promote sector successes and highlight where collaboration has directly contributed to that success, others will give it a go.
"Up-to-date intelligence on clients is the lifeblood of sector team work, and an effective CRM system is the only way to persuade busy fee earners to share that intelligence"
Roger Inman, partner, Stone King (education and charities specialists)
Practice area niches
While some firms are succeeding with a sector focus — with several practice areas working together to provide a full service for those clients — more and more firms are focusing on individual practice areas. For example, partners are breaking away from the national and City firms to form their own boutique corporate, employment, family or litigation firms. The underlying ethos is simple – provide top quality expertise with personal service at a more competitive cost.
Marketing-wise this sort of specialism requires a different approach.
- Using the events, publications and speaking slots linked to your chosen niche, show exactly what your specialist expertise can achieve over and above the generic advice offered by a traditional full-service firm.
- Smaller clients may need less regular advice on the area of your specialisation. So be prepared to invest in structured client management initiatives to open up cross-selling (if you offer other services too) and referral opportunities.
- Depending on which niche you choose, local demand may be limited, in which case market your firm on a national rather than regional basis. For example, if like one law firm you specialise in catastrophic spinal injury medical negligence, you may need to know (and be known by) every spinal surgeon in the country.
- Some niche law is ideally suited to digital marketing. Domain name disputes is an obvious example.
- If your firm concentrates entirely on a specialist practice area (eg employment, or family), include referral channels within your marketing plan. Partnering with similarly focused non-competing firms should be a rich source of new work.
"In developing our Education Law practice we have needed a national footprint to obtain sufficient specialist “pure” education work to establish our brand and generate sustained cross-selling of work to education clients from all departments within the firm"
Roger Inman, partner, Stone King (education and charities specialists)
Niche practice top ten
- Recognise the strategic benefits of focusing on specific sectors using the market's definition, not a lawyer's.
- Look at your existing client base for potential niches, so you give yourself a head start.
- Aim for niches with growth potential.
- Be realistic about the level of competition from existing specialists.
- Choose niches where your fee-earners have genuine expertise and interest.
- Commit to concentrating on no more than a handful of sectors.
- Don't stop providing quality service when it comes to your existing (non-niche) services.
- Target your marketing at sector-focused events, publications and other opportunities.
- Focus on directly addressing clients' business and personal needs, not just the law.
- Break down practice area silos and build cross-practice client teams.
- Who are your best clients? Segment your client base
- Pricing for law firms
- Social media for law firms: overview
- Package, Position, Profit: How to Build a Legal Practice the 21st Century Wants to Buy, by Doug McPherson, £50, published by Ark Group.