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Personal injury? Wills and trusts? Even criminal defense? Blech -- everyone's doing that. In this job market, you've got to distinguish yourself somehow. You might be tempted to do that by getting into a niche practice.
If you're good at it, you might find yourself a local expert in the field. Then again, it might be "niche" for a reason.
Here are some pros and cons to consider:
Pros: Not a Lot of Competition, Higher Fees, Specialization
This is the No. 1 reason to get into an esoteric practice area. There aren't a lot of people doing Longshoreman Act workers comp or toxic torts. Because the supply of practitioners in these fields is so low, you can demand a higher-than-normal fee.
By specializing, you're letting potential clients know that if they really need someone to zero in on a particular issue, like attorney malpractice in medical malpractice cases, you're the reigning expert on that in the area. If you can establish yourself, then you'll be able to get far more experience in that particular area than anyone at a general practice firm.
Having a niche practice is, itself, an automatic marketing tool. General practice attorneys often need to resort to silly gimmicks to get people's attention. (Why are car insurance commercials so wacky? Because all the companies are offering basically the same product.) But the fact of a niche practice is, itself, the marketing angle.
By the way, don't forget to investigate your town or region to see if there's a need not being filled. For example, one Texas lawyer found that, believe it or not, sinkhole law is a practice opportunity in a part of Texas where sinkholes are common.
Cons: Difficulty, Demand
High structural barriers to entry could be why there aren't a lot of people practicing in a given area. For example, if you want to be a patent attorney, you need to take the patent bar and you also need some sort of science training. If you don't have that, then you just plainly can't get into that practice area.
Or it could be that the body of law is difficult to ascertain -- either because it's substantively hard or just because it's voluminous. This is true for a lot of fields, like federal workers' comp and others that deal with a lot of administrative regulations.
Also, the practice area itself may be difficult. Take asbestos litigation, which can be lucrative because there are trusts set up just for paying out asbestos claims. On the other hand, asbestos litigation is time-consuming, requiring voluminous discovery, which not only involves medical procedures but also business records from companies that have been out of business for decades.
Finally, the problem with niche practice may be that there's just not a lot of demand for it. People are always going to be injured and they're always going to die. But how many people really need estate planning for refugees? If there are already one or two firms in town that do this, they're already experts, they have an established reputation, and they've filled the demand.
Sounds daunting, but it's better to have all the bad news before you get into a niche practice. If, however, you've read through this post and decided that the odds are ever in your favor, then go for it and watch the longshoremen roll in.
Editor's Note, September 10, 2015: This post was first published in October 2014. It has since been updated.