Specialty firms – only one practice area – oh my!
As competition increases, so does the need to find a way to differentiate yourself. And in the professional services sector, this involves attracting new opportunities by clearly defining expertise and applying them towards specific practices.
Specialty or boutique firms are indeed nothing new. Specialisation is a key differentiator and one way that firms can build expertise that is distinct from competitors who span across practice areas. It also enables firms to represent competitors in a single market, without going head to head against them. But beyond that, the boutique, single practice firm has a weapon against big firm competition.
Specialty law firms on the rise internationally
Boutique law firms have been on the increase in the U.S. for some time now. By concentrating on a specific client industry or sector, they guarantee more profound knowledge and can, therefore, deliver consistent and competent service. And relevant to Australia, the trend of shifting business models from general practice firms to specialised service areas is felt worldwide. Rashida Yosufzai wrote for Asia Law Business some years back, “Once viewed as the underdogs in the world of the big law firms, specialist, and independent firms are benefiting from the post-financial-crisis era of tightened legal budgets.”
The burst of boutique firms in Australia
According to Melbourne Law School and Thomson Reuters 2016 State of the Legal Market white paper, the growth in boutique firm numbers have been substantial over the past few years.
In Australia, the number of single-focus firms is expected to increase; however, many may be doubtful if the market is not large enough to support them. Some may argue that by narrowing their offerings they’re shrinking their market; however, the opposite can also be said to be true.
When your firm chooses to specialise, your audience does become smaller, but because they are targeted, the level of interest is much higher. When casting a wide net, you may only catch a handful of warm leads. Instead, fish in a specific pond where each catch is valuable.
And in time, you become known as the go-to expert in that particular specialisation and will enjoy a steady stream of business through referrals, thanks to a good reputation.
Why specialty law firms are gaining momentum
If you think about it, specialisation makes sense. Children see a pediatrician. Women visit their gynecologist. If you’re pregnant, you see an obstetrician. If you have poor eyesight, you see an ophthalmologist. If you’re seeking investment in your business, why wouldn’t you want to see a specialist legal investment advisor? If specialisation makes sense for your body, why not your business?
Lawyers, accountants, engineers and medical practitioners come in all flavours. There’s a lawyer to help you obtain a patent for your revolutionary invention. There’s a tax practitioner to advise on your tax incentives. There’s family business advisors to assist with intergenerational wealth transfer. There’s lawyers with expert knowledge in wills and estates will work with you to manage your wealth.
Because specialty firms can offer a more client-centric approach compared to larger firms, they’re less intimidating. Clients enjoy personalised experiences that are comforting and intimate. And when they develop connections with their advisor, they’re more likely to remain loyal and rely on them for referrals to others who can assist them on other areas of expertise.
With specialty firms offering flexible, personalised, and competitively priced services, could we see more boutique firms come to power? In times of economic downturn, can they dominate their professional services sector as evolved clients demand better client experiences?