The rise of the specialist premium law firm
As the legal market becomes increasingly global and increasingly crowded law firms are finding strategic success with more focused strategies: international elite, global giant, national powerhouse, etc. More recently a few firms have begun to overtly specialise on a super-focused area of law with some signs of breakthrough success.
Focus, focus, focus
It's not a new strategy; firms like Wachtell Lipton in New York, Quinn Emanuel in LA, Wilson Sonsini in Palo Alto and Williams & Connolly in DC and have been super-focused 'boutiques' for decades and there are the one-market specialists like Hengeler Mueller and Slaughter & May who have found themselves positioned as specialists in their markets by 'doing nothing' whilst all around them competitors raced to build international networks.
But recently, most visibly in litigation, brand new firms have sprung up from nowhere - startups even - and have begun to punch well above their weight on a national and even international stage. Stewarts, 3 Crowns and Signature in London for example, all litigation specialists.
Research with senior buyers of legal services shows many trends, among them an increasing demand for genuine market leading expertise for those lawyers and firms wanting to command premium rates - or looking at it from the other end of the telescope, if your lawyers are perceived to have genuine specialist expertise then you may be in a better negotiating position when procurement comes calling than those that aren’t.
Fun-fact, until very recently Bar rules in many jurisdictions banned law firms from even referring to themselves as 'specialists' but that appears to have been relaxed somewhat.
Zig while others zag
The logic of this strategy from a branding and market positioning perspective is obvious but nevertheless it's rare. By specialising, a relatively small or even brand new firm can quickly and credibly compete with much bigger firms for premium work. Clients buy into the idea that their specialisation brings increased knowledge and experience, even if in a narrow area. Some of the litigation specialists have taken challenger positions; pitching themselves as 'conflict-free' firms, willing and able to take on (i.e. sue) the establishment corporations and financial institutions whilst other big firms shy away, for fear of biting the hand that feeds them.
Specialists can credibly and relatively quickly position themselves as having deep proprietary know-how and expertise in their core area even when they are smaller and perhaps newer to the market than some of the traditional competition.
More to come
But it feels as if the dam is only just breaking and that over the next decade the market opportunity is immense for premium law firms that can focus on discrete areas of practice, particularly on an international stage. Tax, IP, Employment and Real Estate, among others, feel like potential areas where a discrete offer can thrive, it might also be possible to specialise with a broader range of practices on a super-focused client group, energy perhaps, or tech companies, or life sciences. This so far appears a path less trodden, perhaps because some firms are already closer to achieving this implicit market focus rather than adopting and embracing it consciously.
Firms that have a deep and powerful - but narrow - area of expertise and specialism tend to want to broaden beyond it as much as possible rather than double down on it. This is understandable, especially if they already have many partners focused on practices beyond the specialism, and of course wise leaders know that the vagaries of the economic cycle tend to mean that when some boats are in the doldrums others are in full sail. This may always be true but needs to be held against the view that as the market becomes increasingly global and as clients become increasingly demanding of efficient and focused service the 'all things to all people' approach to strategy may become harder to maintain and thrive with.
Look out for more super-focused firms emerging as challengers to the incumbent firms in all areas over the next 10 years.