Main takeaways:
- Specialization Enhances Efficiency: Focusing on a specific practice area improves operational efficiency and allows firms to provide higher-quality service, ultimately increasing profitability.
- Better Conversion Rates: A well-defined niche helps firms convert leads more effectively by showcasing expertise and experience in a particular area of law.
- Increased Profitability: Specialization allows for higher pricing and attracts clients willing to pay for top-tier expertise, leading to greater revenue and a more sustainable business model.
Ever wondered why some law firms skyrocket while others barely get by? In this episode, Patrick Carver, CEO of Constellation Marketing, uncovers the power of niching down and how specialization leads to more cases, higher profits, and a streamlined operation.
Whether you’re a small-town lawyer or aiming to grow into a seven-figure firm, discover why focusing on a specific practice area is the key to long-term success. Watch now and transform your law firm!
Timestamps:
The Power of Specialization
Timestamp: 00:00:05:23 – 00:03:05:15Operational Efficiency Through Niching
Timestamp: 00:03:05:15 – 00:09:34:07Boosting Profitability by Focusing on One Practice Area
Timestamp: 00:19:19:00 – 00:24:57:10
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Transcription:
00:00:05:23 – 00:00:33:07
Patrick Carver
Have you ever wondered why some law firms thrive and others continue to struggle year over year? Well, the answer may lie in the power of specialization. In this episode, we’re going to cover the power of niching down to cover a couple of key special practice areas for your practice. We’re going to talk about some of the benefits of that, from operational efficiency to close rate improvement rents and ultimately the most important part of it.
00:00:33:13 – 00:00:58:27
Patrick Carver
More cases and more profit. Welcome to another episode of the Optimize Law Firm podcast. I will be your host. This is Patrick Carver. I’m the CEO of Constellation Marketing. The podcast is all about helping law firms enjoy a more profitable and enjoyable law firm experience. Today we are going to be talking about niching down. So the title of the podcast is Niche Down.
00:00:58:27 – 00:01:27:13
Patrick Carver
Profit’s Up. Why Specialization Works so Well for Many Firms. And first, we’re going to talk about kind of what this strategy or thought process is. We’re going to then get into some of the specific benefits that law firms receive when they apply this approach. So what are we talking about with niching down into a particular practice area? So there’s a tons of variety of in terms of types of law firms out there.
00:01:27:13 – 00:02:07:11
Patrick Carver
But coming from our perspective as a marketing, you see we see who is doing really well, who’s struggling, who is stagnant or just kind of right there in the middle of the road. And a common thread that we’ve noticed over the past eight years is that a lot of the firms who specialize in a single practice area really do better in terms of a number of benefits or a number of aspects than other law firms who are trying to handle multiple practice areas and don’t really have a true specialization.
00:02:07:11 – 00:02:34:13
Patrick Carver
Right? They do a little bit of criminal, but also a little bit of pie or a little bit of immigration and a little bit of criminal. And there are some scenarios where I do think that makes sense. But when you are kind of in this mindset that you’re trying to get to be a seven figure law firm, I think the probably the best path for this is in fact, specialization.
00:02:34:15 – 00:03:05:15
Patrick Carver
So some of the benefits that you’re probably aware of, but we’ll go through them really quickly. Number one, you are going to have a better presentation to the world, right? As someone who specializes in a you know, in one key area is going to give you a benefit over over other people. And a lot of times this leads to a big a bit of operational efficiency that we see with our clients when they choose one over the other.
00:03:05:17 – 00:03:37:27
Patrick Carver
So imagine delivering world class service with better quality and faster every single time. You might think that this is an enormous challenge, but it’s really not. And it’s completely actionable by niching down your practice. So let’s get into the first benefit of niching down, and that’s going to be operational efficiency. So let’s talk a little bit about why this works and by limiting your number of practice areas for streamlined, repeatable processes.
00:03:37:27 – 00:04:04:21
Patrick Carver
So as I mentioned, there’s a lot of different varieties of law firms. And I would say that some of the law firms that don’t fit into this bucket of what I’m talking about are really two groups come to mind. Number one, I would say the small town lawyer who is kind of a generalist within a a smaller community, someone who can do wills, who can do a little bit of criminal real estate closings, like different stuff like that.
00:04:04:24 – 00:04:34:04
Patrick Carver
That’s one area where I do think it generally makes sense to have multiple practice areas because you’re not really trying to grow or you have a limited growth trajectory. I would put it that way. You’re still obviously trying to grow your revenue, but by being in a limited market like that, you’re going to cap out, right? You’re only going to have a certain number of criminal cases each each month or quarter that are available.
00:04:34:06 – 00:04:58:11
Patrick Carver
The other group that I don’t really think fits into this as well is one of your larger kind of legacy law firms. One of the shops that has been open for a long time and over the course of time has added divisions. So this is some you know, this is a type of law firm that, you know, maybe probably first started with a really specific specialization.
00:04:58:11 – 00:05:26:18
Patrick Carver
Right. They were really good at one thing. And then as they’ve gotten bigger and bigger, they’ve kind of capped out in their market with, you know, getting the cases that they really want in a particular area. And so they’re looking for new areas of opportunity and that can be good when you have, you know, basically gone to the zenith or the maximum of, you know, your total addressable market.
00:05:26:21 – 00:05:52:22
Patrick Carver
Really, who I’m talking about in this video is like I think a lot of, you know, small business law firms, right? Small law firms in the United States who, you know, maybe are doing a couple of practice areas and not really choosing to go all in on one. And there’s they’re not hitting the total addressable market there. So one of the key aspects here is that you can do a better job of creating streamlined, repeatable processes.
00:05:52:24 – 00:06:10:23
Patrick Carver
So as a lawyer, when someone comes in, you have multiple practices, especially if you’re a solo and one day you’re doing an immigration case, the next day you’re doing an estate plan, and then the next day you’re going to jail to get get somebody out for that. There’s no way for you to be an expert at all of those things, right?
00:06:10:23 – 00:06:31:24
Patrick Carver
And so maybe you’re stronger on one and you kind of have a lot of experience with that. But in another area like criminal, you know, it’s not not really your strong suit. Right. And there are other people at the courthouse who are, you know, in in that courtroom every day doing doing these types of cases that put you a leg down from second, but also just makes it harder.
00:06:31:24 – 00:06:55:19
Patrick Carver
Right. So when we started our agency eight years ago, we would take a lot of different people, right? We would our focus was always lawyers, but we were also taking, you know, certain like friends or we would get referrals from existing clients like my cousin, you know, does, you know, has a certain type of business and, you know, can you do the same thing for them?
00:06:55:19 – 00:07:30:22
Patrick Carver
And, you know, probably the biggest mistake I ever made was, you know, taking a opportunity to provide social media content for a sushi chain of sushi restaurants that are rock and roll themed in Alabama. So you heard that right, Rock and roll themed sushi in Alabama. And, you know, I’ve got no business talking about sushi or rock and roll in Alabama.
00:07:30:28 – 00:07:55:01
Patrick Carver
And nonetheless, we have this mindset of, you know, we needed where we wanted to grow and it was an opportunity to increase our revenue seemed at the time, you know, hey, we can we can probably do this because we’re doing social media content for other people. And, you know, it’ll just take some some legwork and research. But it, you know, predictably did not really end up working out.
00:07:55:01 – 00:08:23:18
Patrick Carver
And a big part of this was that we had to reinvent the wheel every time that we started working with someone like this. Every time we got a new client, even within the law side, with a really unique practice area that we didn’t have much experience in and we had a very different type of customer acquisition requirement or it was a different path, you know, to get those those customers.
00:08:23:18 – 00:08:53:05
Patrick Carver
And, you know, so we would get into those with mixed results. But the biggest thing was trying to go and create a successful campaign was just enormously challenging because we would have to, you know, do it custom basically every time. Right? And so as we grew, when we took on those more custom projects, it was me personally who was having to run point on those.
00:08:53:05 – 00:09:34:06
Patrick Carver
And in order to scale, you have to get out of a certain portion of the day to day activities, right? Ideally, you’re getting out of most of the fulfillment, right, So that you can do other parts of the business. And so this limited our ability to grow because I was constantly going back into, you know, the operations and I was really the only one who who could do that, or it would take a long time for me to try and, you know, come up with the strategy and then go educate our team members and so, you know, as soon as we could, we we stopped accepting outside clientele like that and we came up with
00:09:34:06 – 00:09:54:07
Patrick Carver
more specific, repeatable processes that we could use for every single client. And we could do it the same way. And this way our team really started to learn one singular process so that they could be world class at it, so they could, you know, really understand it and, you know, and just build that, that, that muscle memory. Right.
00:09:54:07 – 00:10:17:26
Patrick Carver
That that benefit of doing it a you know, getting the repetition in, you know, something like 10,000 times. Right. With the Malcolm Gladwell book and as you do this, it you know you can get things done faster. You can get things done at a higher quality. And ultimately that really a lower cost because you’re not spending nearly as much time going into like the prep stage of it.
00:10:17:26 – 00:10:44:18
Patrick Carver
You already know what works and you can you can dive right into it. And so to apply this to yourself, if you know, if you’re an estate planning attorney, you can pretty much create these workflows within your business, which, you know, for me what that means is, you know, basically just showing like a flow chart of what should happen when someone utilizes a particular service with you.
00:10:44:18 – 00:11:09:03
Patrick Carver
And so as they sign, then they’re going to go to the intake questionnaire, then they’re going to go to get the initial review by the paralegal. Then they’re going to, you know, meet the lawyer and, you know, and go on and on. Right. And so, you know, by doing that, you have very predictable workflows and steps that people are going to take to fulfill the service.
00:11:09:03 – 00:11:38:25
Patrick Carver
Right. At the end of the day, you know, your word is your reputation. And if you’re able to provide a really good world class experience, people are going to go elsewhere. Right. And it’s the same with any business. And it’s certainly true with with legal services. And so to truly get out of those matters without, you know, you obsessing over them and killing yourself and not having any time left in your day because you’re, you know, you’re trying to sell, you’re trying to fulfill, you’re trying to market and do all these other things with the business.
00:11:38:28 – 00:12:06:15
Patrick Carver
The only way to get there is through repeatable, systematic processes for your team that that they can follow and do with a high degree of quality. And so in any of the processes that we work on, whether it’s bankruptcy, criminal family, immigration, personal injury, estate planning, all of those, you know, there’s there’s going to be ways that you can carve out these workflows, right?
00:12:06:15 – 00:12:33:11
Patrick Carver
And you can carve them out based on, you know, your individual products. Right. Or that the services that you do. So you want to think about how to productize those services and you’re going to benefit immensely from this as opposed to trying to do trying to do it custom every single time and reinvent reinventing the wheel. Would you choose a jack of all trades or a master of one when your legal future is on the line?
00:12:33:13 – 00:13:10:15
Patrick Carver
The answer, of course, is to choose a specialist every single time. Let’s move on to Section two. We’re going to talk about why this specialization actually helps you win more clients. So as I mentioned in the example specializing is is such a no brainer, right? Because think about it, you know, in in your life, when you go to, you know, a medical provider or, you know, really any service that you care about and need a high quality of execution, you’re going to look for the person that’s the best in the business right?
00:13:10:15 – 00:13:31:29
Patrick Carver
The best in your area, who has the most experience, the best specialization skills. You’re not just going to go out there unless you’re just, you know, not a discriminating consumer. So when you get out there, you know, and look for that quickly, people are going to emerge as the best in a particular area. And that gives you an enormous amount of leverage.
00:13:31:29 – 00:13:54:03
Patrick Carver
And so when potential clients in the legal sphere are out there looking for, you know, different options, they are going to go with someone that they perceive to be of the highest quality. Right now, depending on the consumer, there’s probably a spectrum of, you know, people who are going to look for somebody who’s, you know, kind of good enough.
00:13:54:03 – 00:14:16:22
Patrick Carver
Right. And has the bona fides, you know, that they believe is is someone who’s, you know, maybe one of the more successful attorneys in that practice area. And then you have other people who want only want the best of the best. Right. And they’re going to spend that extra time going in to, you know, look for someone who’s specifically excellent in in that area of law.
00:14:16:24 – 00:14:37:08
Patrick Carver
And this has a profound impact on your ability to convert them. Right. Because if you are in an area and this is a challenge that we we deal with a lot with clients who, you know, have a pretty good practice in one single area. And we kind of come into the picture from a marketing perspective. We ask them like, Hey, what do you want to focus on?
00:14:37:10 – 00:14:55:16
Patrick Carver
What you know, what do you want? Where do you want to grow? And an answer I get a lot is, well, we want you know, we definitely want these cases. That’s our that’s our bread and butter. But we also want a little bit of pie. Right? And this is like my favorite thing from clients is like, well, we want, you know, immigration with a side of pie.
00:14:55:23 – 00:15:24:16
Patrick Carver
Like we want to do our thing. But also if $1,000,000 case comes along, we’ll just, you know, we’d be happy to snap that up. Right. And, you know, often that does not happen, right? Those things can happen, but generally through referral and stuff like that. Because when somebody is going out there for an auto, it needs an auto accident attorney there, You’re just going to get absolutely bombarded by people whose only job, night and day is is auto accidents.
00:15:24:16 – 00:15:53:24
Patrick Carver
Right? And in other pie claims. And so they’re spending an enormous amount of time focused on just those things. Right. Because you are giving yourself an enormous advantage if the consumers out there and they see two different people, one of them looks like they kind of do PR, maybe they do a little bit of it, or the other guy who is like, I am the pie king or queen, and this is all I do here, my results so on and so on.
00:15:53:24 – 00:16:31:29
Patrick Carver
So this gives you a really powerful benefit and opportunity not only to try and convert those people, to get them to the website, but then also during your consultation, right? When you get these people in and you have the ability to go, go, you know, with them one on one to convince them that you are the right person for the job, being able to showcase your experience and that you have superior experience than the average person doing criminal law or immigration law or whatever it is, You’re absolutely putting yourself in a much better position to convert those people.
00:16:31:29 – 00:16:52:18
Patrick Carver
So there’s no question about it that, you know, when somebody goes in, they are going to lean towards the person who has this advanced specialty, an advanced skill set that is presumably going to give them the best option when their legal future is on the line. I think you’re probably getting the picture now, but just think about it in a practical sense, right?
00:16:52:20 – 00:17:15:15
Patrick Carver
And somebody gets a DUI, right? They’re looking around and they want to get somebody who’s going to like, get it off, get there, get it off their record. Right. And not serve jail time and all of that stuff. So they’re panicked. They may have a family member out there looking around. They’re going to go out and they are probably not going to call the first person they see.
00:17:15:15 – 00:17:41:14
Patrick Carver
They’re going to look and kind of, you know, even if they knew nothing about lawyers, they’re going to do a quick review of a couple of different lawyers and in the marketing language, it’s going to showcase those benefits. Right? Like we’ve successfully litigated 100 DUIs in the past year. We you know, we have the most experience of any DUI person in in this county.
00:17:41:16 – 00:18:01:18
Patrick Carver
We get the best results for DUI. That’s all we focus on. Like, those are the type of things that are absolutely going to give that person a leg up in any sort of consumer shopping period. Right. And so when you’re thinking about doing this, you have to think about the, you know, the costs and benefit of it. Right.
00:18:01:18 – 00:18:26:01
Patrick Carver
So even though you may want to kind of keep your options open by having a second practice area or something that you kind of do on the side, it’s super important for the marketing aspect to really singular eyes your practice area and show that you are the best person on the planet to service this person when they are in a time of legal need.
00:18:26:03 – 00:18:51:19
Patrick Carver
What if I told you that saying no to some cases will actually make you more money? What if I told you that saying no to some cases will actually make you more money in the long run? I’m talking about specialization. Why niching down leads to better operational efficiency. So you’re running a better law firm and producing higher quality service, but most importantly, you’re going to make more profit as well.
00:18:51:21 – 00:19:19:00
Patrick Carver
So the final part of this podcast is we’re going to talk about why this leads to more revenue and ultimately more profit associated with it. So there’s a couple things. It’s basically a reiteration of what we’ve talked about in the past, too, in the past two sections. So as a recap operation efficiency is a big benefit and that’s going to be one way that you can get more money.
00:19:19:00 – 00:19:44:18
Patrick Carver
You can increase the profit margin because the faster that you can provide the service and if you can do it in a more streamlined way, especially if you can bring somebody in who’s going to do it at a lower cost per hour than what you would be doing it at, you’re able to take on more work. You’re able to grow the business in different ways and do other things for the business where you’re truly spending your time most wisely.
00:19:44:18 – 00:20:09:03
Patrick Carver
Right? So you have you have a net gain right there. You’re also going to get more money because you have better conversion rates. So if you’re, you know, converting, let’s say two of ten people that come in as a qualified, qualified visitor, qualified lead, you know, can you increase that to four or five? Right. And I don’t think this is out of the question.
00:20:09:03 – 00:20:32:22
Patrick Carver
We see our strongest law firms who have specialized for a while and, you know, really focused on one specific area that they want to grow and dominate a market. They have these type of close rates or even higher because they know exactly how to talk to these people. They know exactly what to say and what to emphasize during those sales calls.
00:20:32:26 – 00:20:55:00
Patrick Carver
And that whole process of trying to endear themselves to the potential client and get them over the line. So by just getting more repetitions and talking with those people over and over and over again, you really familiarize yourself with the talking points and the information that is going to move the needle and get more people to sign with your firm.
00:20:55:02 – 00:21:19:02
Patrick Carver
Another area that this is going to increase your profit is by being able to get more high value cases from the types of people that you’re looking for who can pay, who are not afraid to to spend and want the best of the best. So as you specialize, you’re going to be able to progressively increase your prices over time.
00:21:19:02 – 00:21:52:08
Patrick Carver
And this is extremely powerful, all because you can use one flat marketing budget and it’s a way to effectively increase your market by doing nothing more than increasing prices. Right? And so as you become known for this specialty and you start to get those results, you can start to progressively increase your prices. Every time somebody new comes in, you’re not going to be stuck at a certain price being kind of the discount option in town because you don’t have that specialty.
00:21:52:15 – 00:22:29:14
Patrick Carver
You want to be focusing on the people who are going to bring you the most capital, right? They’re going to they want to spend. They want the best of the best. And that’s where you fit in with this. And so by having all of these pieces together, the better service, the better, better quality of outcome, better close rate, better sales conversations, all of that stuff is going to put you in a position where by the end of that and you’re talking about a price, there are going to be much more open to that because they know there’s an increased value or a better expectation of what they’re going to get from you as a output
00:22:29:14 – 00:22:59:18
Patrick Carver
of your service. So whether you’re a personal injury lawyer or any other type, if someone comes in with a catastrophic injury case, if they know that you are consistently getting results that are 30, 40, 50% more than your next door neighbor who does the exact same thing, you’re in a great position because they’re going to see that by going with you, they’re willing to pay a little bit more money or have a little bit more of that that settlement.
00:22:59:18 – 00:23:23:20
Patrick Carver
Go back to you because the pie is going to be bigger. It’s like what they say in Shark Tank all the time. It’s it’s like, you know, do you want to be do you want to get a 100% of something very small or dilute yourself a little bit and and make a lot more. Right. So Miller concept applies with criminal and different things like, you know, that you’re going to get the best result.
00:23:23:20 – 00:23:45:24
Patrick Carver
You are willing to pay more. And those are the type consumers that you are courting with this strategy and ultimately are going to lead you to making more money on the same amount of work, which will have a dramatically beneficial impact on your bottom line. Specialization isn’t just about focusing on a few practice areas. It’s about mastering them.
00:23:45:27 – 00:24:09:00
Patrick Carver
It’s about attracting the best clients and ultimately growing your law firm in a more predictable, higher margin way that’s going to secure the future of your growth for a long time. If you have questions about how to do this, how to even start thinking about this, or you’re confused by any of the concepts in here, I’d love to chat with you more.
00:24:09:00 – 00:24:33:01
Patrick Carver
I’m my door is open. You can reach me Patrick at go constellation dot com and we’d love to talk about your your law firm we we deal with this stuff all the time. We love getting into the weeds and helping lawyers figure out the best way for them to make more profit and do it in a more enjoyable way where you can actually enjoy your business and you don’t feel like a slave to it.
00:24:33:03 – 00:24:57:10
Patrick Carver
So that’s going to end this episode on niching down and profits up. I just want to thank you for tuning in. I know there’s a lot of choices on how you could spend your time and who you look to for information about your law firm. So sincerely, I want to thank you for listening to this. And if I can help in any way, please let me know otherwise.
00:24:57:10 – 00:24:59:13
Patrick Carver
Thanks. And peace out.
