It's important to avoid settling on a general practice in 2017. Trying to maintain a general practice in the modern legal field is next to impossible to do well. For one thing, it's difficult to sell everything, and not just one thing - you've probably heard of Bumble Bee tuna, but not Calumet general fish purveyors, right? The problem extends to referrals, too - if you're sending a colleague a referral, you want an expert, not someone who dabbles. As a general practitioner, you're continuously working toward competency in a variety of practice areas - constantly reinventing the wheel kills your efficiency, and opens you up to malpractice claims.
But, even if you understand that there are distinct advantages to refining your niche, it's another thing entirely to make a choice of where you want to direct your efforts.
Here are some tips:
Do what you like … or, what you think you like
Ultimately, in any business, you want to do work that you enjoy. Plenty of people don't enjoy their work; but, those folks are not as efficient as the people who do, because they inevitably look to avoid their commitments. Even if they get them done, it's a painful process. If you decide that you want to practice divorce law because you think there's a lot of money in it, but you hate conflict … well, that's not going to work out too well for you. If you decide to become an appellate attorney, and research is not your bag, you won't be practicing at your highest level. This is not to say that you have to love your job - no one loves to work; especially for business owners, there is always baggage attached to doing the things they enjoy. But, you have to more than tolerate what you do, to consistently do it well.
As a new attorney launching a practice, you will have no idea what you like. You'll know what you think you like; but, you won't know for sure until you try it. So, experimenting, trying different practice areas to see what fits … that's all on the table for a new solo or small firm manager.
All politics is local
Don't make business decisions in a bubble. Attorneys far too often manage their law firms based on guesses or hunches and suppositions; and, those same attorneys often ignore evidence that is contrary to their beliefs. If you're dead-set on starting an estate planning practice, don't make that decision in a vacuum. Are there other estate planners in your area? How many? What do they charge? What are their target clients? How would you differentiate yourself from them? Is there another, underserved practice area in your community that represents an unmet need?
Run the numbers
How will your practice niche fund your law firm? You don't know until you figure out what your overhead is, in the first instance. Before you make a penny, you have to meet your overhead. From there, you can pay yourself: the equivalent of a subsistence wage, and then a salary. But, you'll also need a plan to get to the revenue and salary level you want. So, figure out how much you will charge for your service, and do some revenue projections. Set up an aggressive case and a conservative case, and play each out. You'll then have a far better idea of the potential economic viability of your law firm.
Trending topics
One of the advantages of running a solo or small firm is that you can be agile. You can set up in a new or intriguing practice area, or jump to one, if you believe that the effort involved will yield fruit. Your practice niche, then, could be built on the foundation of a new law, or a change in the law. You could work in a practice area that not many lawyers focus on, or that not many lawyers in your geographic area practice in. Finding a trend, and riding it, is a species of the argument dictating that you consider pitching your tent where the competition is least stiff.
One is the loneliest number
A niche practice is a defined practice; but, it does not mean that you can only practice law in just one area. If, instead of holding out for many different practice areas, you reduce your expertise to three or four practice areas, that is still a niche practice.
Take a complement
You should strive to build your niche practice on complementary practice areas. Complementary practice areas are those which referrals can made between. For example, within the family law construct, divorce work often leads to estate planning work, because newly-divorced persons will need to re-do their estate plans. Across practice areas, there is traction between immigration law and criminal law, since some immigration clients have immigration issues that arise out of criminal law matters. Choosing complementary practice areas, via which you can make internal cross-referrals, is another way to build out your revenue profile.
Jared D. Correia is the CEO of Red Cave Law Firm Consulting, which offers subscription-based law firm business management consulting and technology services for solo and small law firms. A former practicing attorney, Jared has been advising lawyers and law firms for over a decade. He regularly contributes to legal publications, including his column, "Managing," for Attorney at Work, and his "Law Practice Confidential" advice column for Lawyerist. Jared is the author of the American Bar Association publication "Twitter in One Hour for Lawyers," and also the host of the Legal Toolkit podcast on Legal Talk Network. Jared also teaches for Concord Law School, Suffolk University Law School and Solo Practice University.