Why is a niche valuable for a lawyer’s business development?

Why is a niche valuable for a lawyer’s business development? Any marketing person will tell you that a key to long-term success is to have a well-defined niche. And yet, when you have a broader practice area like litigation or if your area of law is huge and complex, the concept of narrowing your focus can feel super daunting or even foolhardy. So, for today’s topic, I’m going to talk about Jim Collins’ flywheel concept and how that applies for lawyers and specifically how it applies to a niche practice.

In his classic business book, Good to Great, Jim Collins introduces the “flywheel effect.” An actual flywheel is a mechanism that is a part of engines. In reality, it usually looks like this,

but personally I prefer to visualize it as looking like this. 

Anyway, the flywheel effect combines two concepts. First is the idea that to create a great business, it doesn’t take one big push or one brilliant initiative, but rather it is a cumulative process of gradual improvement where you keep pushing in the same direction over time.  A flywheel is hard to get moving for the first rotation, (because it’s really heavy or there is a lot of resistance) but as you keep going, it gets easier and easier and ends up spinning very quickly and essentially creating momentum on its own.

The second aspect of the flywheel concept is that it's a way of defining your business strategy.  The goal is to distill your recipe for success to just five or six elements that form a virtuous cycle. Basically, the elements reinforce each other through a feedback loop. Each part of your flywheel should lead naturally to the next part, which leads to the next and the next, creating more and more momentum.  

In Turning the Flywheel: A Monograph to Accompany Good to Great, Jim Collins describes how he helped Amazon define their flywheel. 

• Amazon offers low prices on more items.

• This brings more customers to its site.

• Having so many customers attracts third-party sellers.

• Having more third-party sellers leads to the sale of more goods and a more extended distribution system.

• This causes revenue to grow with fixed costs.

• That, in turn, enables Amazon to offer lower prices on more items. 

That’s the basic concept of Amazon’s flywheel; and everyone now knows how incredibly successful that approach has turned out to be. 

Here’s how it can apply to a niche law practice.

• First you announce your niche, let people know what you are really focusing on. 

• Because potential clients and other lawyers see that you are specializing in that area, you will get more direct referrals and more direct clients in that niche.

• Doing so much work in one narrow subject area increases your expertise.

• More experience with those matters leads to greater skill, insight and efficiency. 

• These insights can lead to articles and presentations, as well as feathers in your cap that can be added to a representative matters list or which could lead to media mentions. 

All of this further enhances your reputation and, going back full circle, serves as a way of announcing your niche to the world.

The trick to making the flywheel spin faster and faster is that you don’t just rely on the momentum intrinsic to the flywheel. You also need to work separately on each of the individual elements that make up the flywheel.  For example, by announcing your niche, you will attract referrals.  However, the more you network, develop a strong elevator pitch, and make a practice of giving referrals, the more likely you are to receive numerous good quality referrals. It is the combination of identifying the elements of an effective flywheel plus engaging in business development activities designed to highlight or enhance each of those elements that leads to strong momentum and a successful practice.