What are the risks and rewards of setting up a niche legal practice?

What are the risks and rewards of setting up a niche legal practice?

Peter Scott, principal of Peter Scott Consulting and former managing partner of Eversheds’ London and European offices, and Tony Williams, principal of Jomati Consultants and former managing partner of Andersons Legal and of Clifford Chance, offer their thoughts on carving out a niche in the legal market.

What are the attractions and advantages of establishing and running niche practices?

Peter Scott (PS): Niche practices are about specialisms—which is what clients now want. Clients go to lawyers for their expertise. Gone are the days when clients wanted generalist firms. Niche practices, by specialising, often tend to be market leaders in their fields—achieving market leadership is about gaining a competitive edge over rivals. A niche firm is likely to be able to win and retain more clients, be better able to recruit and retain the best people and, because it is seen as the specialist firm, charge more for its services. I have a number of niche firm clients who are market leaders and all highly successful. However, we do need to be clear about what we mean by niche firms. They can be very small or very large and they can be built around a specific area of law or an industry or sector.

Tony Williams (TW): One main benefit is that the firm has a clear focus and a clear message to send to the market. It’s a case of classic branding. To maintain that benefit and advantage, the firm must live up to its message, so it has to be diligent about not going off piste. Firms like Sackers—which specialises in pensions—continue to prove that if a firm is properly determined, they can establish and maintain a credible niche strategy.

What are the major considerations for firms in determining whether to develop a niche practice?

PS: Each niche firm would have its own reasons for establishment. There are, however, a range of factors which have driven the growth of

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