Can you be the master of everything? Usually not. Especially not within our professional service firms.
However, we can become an expert in a small focused area of a market. And when you do this, it can lead to a better satisfaction for you as the owner and for your staff, make it easier to recruit and retain that staff, and yes, even make the firm more profitable.
That’s why I’m a big believer in a niche professional service firm. Doesn’t matter what your professional service is (law, accounting, real estate, medicine, etc), the more narrow you go, the easier it is to run your law firm.
What is a Niche in a Professional Services Firm?
We can start with the definition from Merriam-Webster:
Niche: a place, employment, status, or activity for which a person or thing is best fitted.
Also: a specialized market.
Merriam-Webster
But really, it is the idea that we are going to be very strategic in what we offer and to whom we offer it to.
The more narrow you go, the more strategic we can get with our marketing, our recruiting, and our processes. We can design a solution that works for our firm and not for every Tom, Dick, and Harry that walks in the door.
How I’ve Used Niching to Define Springboard Legal
You might see Springboard Legal as serving a lot of different companies. And we do. But there is also a very defined ideal client profile that we use:
- Industries Served – We draw on my experience as a lawyer, a CFO, and a consultant to serve people in similar industries. So professional service firms (legal, CPA/tax/EA, consulting, architects, medicine, real estate, etc), supply chain & logistics, and B2B SaaS. Also, we help content creators since Kimberly is well-versed in those legal issues from her RV blog. There is a common thread for these industries though – they are all people intensive and less capital intensive. You may see some data centers or tractor-trailers, but the biggest expense/asset/issue is always going to be the people.
- Fast Growing Companies – because of my (Kimberly) experience with fast-growing companies and even failing companies (turnaround consulting), I know where the pitfalls are for you during your growth stage. I leverage this experience to help firms that want to grow and grow fast.
- Startup to Scale Up – My ideal client is a fast growing company that is privately held. I personally have no interest in handling an IPO or SEC governance. I’ll leave that to other professionals that better suited and want to work with that size company. Part of the niche that we target here at Springboard Legal is privately held, founder led companies that want to grow organically, through mergers and acquisition, and even venture capital or private equity funding. But once you get to the point of an IPO, I’m out.
And yes, I tell clients from day one, that if you goal is to go public, my goal is to get you there and hand you off to someone else. I may stay on as an advisor or board member for the institutional knowledge, but I will not be the primary legal or financial executive of a public company. - Ethical Owners That Want to Do The Right Thing – again, I take from my experience working for not great founders and business owners to say that we only want to work with founders and owners that want to grow, but do it the right way. We are looking for long-term success, not short-term wins. And being ethical and doing the right thing by customers/clients, staff, and other stakeholders will inevitably lead to long-term success when paired with a good business idea and following the methodology.
As we continue to grow, I expect that the niching will continue to evolve. Because your niche isn’t static.
Evolving Niches Over Time
You think you’ve niched down, but trust me, there’s still more that can be done to go even more narrow within your service offerings.
You may find that a new area of practice emerges that really interests you – think emerging technologies or changing laws. Or maybe your niche is dying because of new technologies or law changes and you need to find a new one.
You may also find out that you really don’t like what you chose to do. Once upon a time, I had the opportunity to become a sports agent. Several of my college friends went that direction and there were discussions of me joining them after I became a lawyer. But I turned them down – sports is my escape from real life and I didn’t want to turn that hobby into work. I knew early on that I didn’t want to grow to resent the work or not enjoy the sports. (You think watching laws being made is bad, the sports sausage is even worse)
It may also be that as you have several niche areas you serve, one starts taking over the others or you don’t get traction with one. So you start narrowing your focus even more.
Back when I started my firm (before the rebrand to Springboard Legal and a few side quests), I also took on family law and estate cases. Now, I focus solely on the business. While those topics can come up and I can generally advise on the topics as they affect the business, I always refer that work out to other attorneys. Why did I narrow my focus? I didn’t like the push and pull between parents, using their kids as a tool. I’m not setup to handle those cases (more power to you if you are a family law attorney). And I was getting so much work on the business side, I couldn’t spend the time to stay up-to-date on the estate planning side.
See Also: Now is the Time to Start a New Business
Top 5 Benefits of Niching Your Professional Services Firm
I’ve hinted at a few of them already, but let’s dive into the top 5 benefits of niching your professional services firm.
Easier to Market a Niche Professional Services Firm
Let’s say you are a CPA firm, wanting to attract clients in a major metropolitan area. How do you differentiate your firm from every other general CPA firm out there? It’s hard.
Much easier when you serve a specific kind of taxpayer or a certain specific tax situation. Think: high net worth individuals with W-2s, small businesses, estate and probate taxes, or industry specific like law firms. All much easier to market.
Why? You can start hitting keywords in Google Ads and blogs. You can write think pieces on your LinkedIn account on the specific issues facing your ideal niche client. You can focus your networking to people that work with your ideal niche client.
Niche Firms Often Can Charge More for the Same Work
As you narrow your focus and become an expert in identifying and solving the problems of your ideal niche client, you can often start charging more to those clients for your work.
Why? Because you are the expert! The clients know that you will solve their problems, unlike a generalist.
For example, if you have a child custody issue, you go to a family law firm. That’s pretty niche, right? But maybe the issue is an international child custody issue, involving things like immigration and not-so-friendly competing nations. In that case, you’d want to go to a law firm that specializes not only in family law but one with international child custody issues. And that specialization comes with a higher premium. The hourly for the law firm that specializes in international child custody issues will definitely have a higher hourly rate than a general family law firm.
Part of that is because the work is also more efficient. So they can spend 15 hours doing the work vs 50 hours for the same outcome. Even if you are charging 2x the price of the general firm, the client still comes out ahead and is happy to pay the bill (well, as happy as anyone in this arena can be). You can serve more clients, get better results, and make more money.
Better Work-Life Balance in Niche Firms
Once you start niching down your practice, and are better at attracting the right clients, you won’t have to spend as much time on uncompensated business development efforts. Already, you are adding time back into your time bank.
But also, there comes a point when you are the expert in an area that you don’t have to spend as much time on basic research, education, and training. You just “know” stuff. And those hours that you spend getting up to speed on an issue cannot be passed along to the client in most cases. So as an expert in a niche, you can spend less time researching and more time living life outside the office.
As you raise your rates, you also can make some decisions that will further improve the work-life balance in your professional services firm
- Take on fewer clients for the same money you were making before
- Take on more clients but make more money so you can do things like outsource tasks you don’t like (looking at you landscaping, cleaning house, even meal prep)
- Invest in more technology to enable you to work even more efficiently (technology is so much easier when you have one or two use cases versus a wide variety)
- Hire more people to help you, reducing your workload.
See Also: The Science of Happiness
Easier to Attract and Retain Talent to a Niche Practice
People want to work for well regarded professionals, experts in their fields. People also want to work in firms that have good work-life balance, benefits, and career development.
In a niche firm, you can get a lot of that with some dedicated work on it. Since you are making more money and able to charge a premium, you can pay better salaries to your staff. You can hire the specific talents and skills that you need in your niche. Your training and development can be precise and efficient, so you aren’t wasting the staff’s time.
Establish Market Dominance with a Niche Firm
If you have a general practice, it is going to be hard to go up against the big boys in your industry. Literally doesn’t matter which professional services you are looking at – from Big4 in accounting to BigLaw for legal to FAANG in technology. But if you niche down to a specialty, you can gain market dominance for that niche.
I see it daily in legal and accounting in my networks. Companies, even big companies, are looking for a specific set of skills on the issues they face. The decision makers know that that skill is often not in the Big 4 accounting firms or AMLaw 100 law firms. These can be solos or small firms.
When you become the expert in your niche, your name will be shared constantly in these networks. You don’t even have to be in the network, you just have to know someone that is in it. Again, making it easier to market your company. But also to establish a dominance that even the largest of companies out there cannot compete with.
It literally becomes a self-fulfilling prophecy when you niche your firm. You can market your firm easier, make more money, have better work-life balance, attract and retain better talent, and ward off competitors.
Niching May Even Help with the Tax Pro Pipeline
Over the weekend, I was having a discussion on Twitter/X with a CPA about the pipeline of tax professionals. For those that don’t know, let’s just say that there is a very real problem of having enough current and future tax pros to handle the tax needs for US taxpayers.
Some firms are using overseas tax pros to fill the gaps. Others are struggling. But what would it take to fix the issue on a wide scale? How does the CPA and tax field get more quality individuals into the pipeline?
My answer: tax firms need to niche down!
Sounds counter-intuitive at first. But here is my explanation in a nutshell:
- Firms that accept all kinds of tax work (generalists) are masters of none. Each time that a new kind of work comes in, it takes longer than it should because you have to do research, check different scenarios, and just don’t “know it” right off the bat.
- This general work leads to feelings of frustration, especially among those of us that want to be good at everything. Longer hours are required – often hours that we cannot pass along to the clients in the form of higher fees. Which means that our compensation does not reflect the work we have provided. A quick way to burnout.
- Also, when you aren’t an expert in anything, it is harder to market. Which means you spend more time marketing and business development, again not billable. Wouldn’t it be better to have a pipeline of referrals coming in every month because you are an expert in a certain topic?
Meanwhile, when you niche down into a certain area of tax, you can become more efficient. You can leverage technology to automate many things. You become an expert, which means you can charge higher rates and either earn more for the same work or work less for the same money you are making now.
Examples of Niche Professional Service Firms
I have worked with a lot of professional service firms over the years. Early on in my career, I worked for a law firm that specialized in insurance defense on truck accidents. That made it easy for them to target specific insurance carriers to get their cases.
Later on, I worked for a consulting firm that specialized in unclaimed property compliance and audit defense. What’s unclaimed property, you ask? It’s a very niche area of corporate law and finance for uncashed checks, gift cards, and more intangible financial property.
More recently, I’ve worked with law firms that have such specialties as father’s rights in divorce and family law cases; traffic cases for criminal law; high net worth estate planning; Social Security disability claims and appeals; and middle-market real estate. These were all growing and potentially profitable law firms that were very narrow in scope.
On the tax side, I have had the pleasure of working with CPAs and bookkeepers that specialize in law firms; trusts and estate taxes; supply chain; consulting firms; manufacturing companies; content creators and digital nomads.
I’ve even worked with financial planners that have specialized in certain niches – women breadwinners; high net-worth W-2 earners; and sudden wealth (think unexpected inheritance, personal injury settlement, lottery winners).
If you fit within one of those specific categories, wouldn’t you prefer to buy a service from a provider that specializes in those concerns rather than a generalist? If that’s what you want as a consumer, why not build it as the provider?
Niche your professional service firm! If you don’t know how to get started, then Springboard Legal can help with Strategy Sessions. In our 1-on-1 strategy sessions, you get to work with Kimberly or another highly credentialed and experienced business advisor that can help with your niching questions as well as other strategy concerns to help you on your path to fast growth.