As the premium legal market has become increasingly global and increasingly crowded, a few firms have swum against the tide and overtly positioned themselves in the market as super-focused specialists with some signs of breakthrough success.

New firms have sprung up from nowhere and have begun to punch well above their weight

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 have been super-focused ‘boutiques’ for decades.

There are also the ‘one-market’ specialists such as 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 but less visibly elsewhere, new firms have sprung up from nowhere – start-ups even – and have begun to punch well above their weight on a national and even international stage. Stewarts, 3 Crowns and Pallas Partners in London for example. All litigation specialists.

Until quite recently Bar rules in many jurisdictions banned law firms from even referring to themselves as ‘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 quite 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, 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.

The market opportunity is immense for premium law firms that can focus on discrete areas of practice, particularly on an international stage.

Some of the litigation specialists have taken challenger-brand 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 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. There are of course already plenty of smaller firms specialising in these areas, but they tend to position themselves as mid-market alternatives rather than elite boutiques.

The ‘all things to all people’ approach to the strategy may become harder to maintain and thrive with.

It might also be possible to specialise with a broader range of practices on a super-focused client group, energy perhaps, tech companies, or life sciences. This so far appears a path less trodden, perhaps because some firms are already close to achieving this implicit market focus rather than adopting and embracing it consciously. Apart from Cooley (in tech), there hasn’t been an overt attempt to own and dominate a sector at the highest level by a firm that is already halfway there.

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 vagary of the economic cycle tends to mean that when some boats are in the doldrums others are in full sail.

This might always be the case 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 more areas over the next 10 years.