In the first part of this blog series, we looked at the potential growth of micro-niches — highly specialized, sub-sectors of larger legal practices or industry service models. Now, we’ll look at “tech-driven hybrids” unconventional micro-niches that combine the traits of both a vertical practice structure and a horizontally-served industry structure.
Today, firms are facing yet another structural and marketing challenge, that which I have come to call, “Tech-Driven Hybrids.” These are practices that are not simply conventional in that they require a level of expertise that goes beyond any one vertical (e.g., may require regulatory plus tax, plus IP), and they are practices that extend beyond impacting just one industry in that their effect will likely be felt in a good number of different industries.
Let’s examine “Augmented Reality” (AR) as just one example of a tech-driven hybrid. AR enjoyed a global market of $11.4 billion in revenue last year and is expected to grow to $215 billion by 2021. It represents a technology whereby the overlay of new digital information can be effectively utilized with a user’s existing environment and is impacting a good number of different industries. Here are but a few examples:
- Education & Training — Tech platform company Medical Realities is building the world’s first interactive virtual reality training module for surgeons. Dr. Shafi Ahmed reached 14,000 surgeons across 100 countries using Google Glass to stream a training session.
- Professional Services — Advanced collaboration tools make it possible for engineers and designers to work remotely on 3D models and for lawyers to recreate an accident scene in a courtroom before a jury.
- Retail — Try on your outfit in a fitting room, apply makeup to see if it suits you, see if a sofa will fit under the window — all without physically leaving your seat via AR.
- Healthcare — There are video platforms that allows a surgeon in one location, to project his or her hands onto the display of another surgeon’s Google Glass in order to better guide the surgery.
- Real Estate — Enables prospective home buyers to view properties as finished products even while under construction via 360-degree, 3D videos. Spantium has developed a platform to create precise 3D models of skyscrapers before they are even built.
Among these various hybrids are micro-niches in areas like AI, blockchain, 3D printing, quantum computing, robotics, big data, synthetic biology, material science, hi-tech wearables, platform businesses, predictive analytics, and so forth.
In these arenas, we see law firms making the mistake of lumping together a number of hybrids into a large, generic “Technology” practice group and expecting that it should appeal to or impress perspective clients. Unfortunately, what too many law firms are slow to understand is that, if I as a prospective client need specific assistance with a workplace surveillance issue, I’m not interested in conferring with just any law firm that has a Labor & Employment group. And if I want to explore a privacy issue with respect to the use of virtual technology in a hospital operating room, I’m not interested in spending time with your typical Healthcare attorney. These are all the kinds of issues that require very specialized expertise.
But wait, there is still another micro-niche, something that I have simply labeled “Unrealized Segments.” These are simply client groupings that many law firms may already serve, but that are not sequestered as a specific area of expertise. In other words, if I were a prospective client looking for a law firm to help me because of how I have labeled my business, it could be very hard to find a firm.
Indeed, identify for me a law firm, anywhere, that has a practice group specializing in serving “Women Entrepreneurs?” And I’m not referring to small owner-operated corner stores. There are some 8.6 million US businesses owned by a woman, which saw $1.6 trillion in revenues in 2016. You can find accounting firms, financial service firms, consulting firms, and others that specialize in this micro-niche, but law firms… not so much.
Or how about naming a firm that specializes in Venture Philanthropy? There are only 76,000 philanthropic foundations operating throughout the US; so, it seems to be that this could be quite the lucrative market. On the other side of that coin, there is an 11-lawyer firm in New York City that specializes in “Social Finance and Impact Investment Transactions” and I’m not even really sure what that all involves, but I know that they own that market space — and that is the power of focusing on a micro-niche.
What has always been fascinating to me are those situations where I get called into meet with some law firm interested in retaining a consultant to help them develop their firm’s strategic plan, as happened recently in Atlanta. The common questions from the firm’s leaders usually focus on my general experience —with law firms, with law firms looking to develop a strategic plan, with firms of a specific size, and, in this instance, whether I had any experience with firms “from the Deep South.” (No kidding!)
The irony is that the kinds of questions we ask when we are buyers of professional services seem to be very different from how we conduct ourselves when we are the sellers of professional services. Make no mistake. Today’s clients are looking for the go-to specialist in their area of need and there are riches in those micro-niches.
I have always thought that the very best marketer that I had ever witnessed was none other than the guy who started the rock band, The Grateful Dead. And some of you may remember the late Jerry Garcia. What stands out in my mind is that he once said something that law firms might want to take to heart: “It ain’t good enough to be the best of the best,” Garcia said. “I want to be the only cat who does what I do!” Amen.