How Law Firms Distinguish Themselves From Other Competitors Using a "Sector-Focused" Strategy?
"Norton Rose Fulbright sharpens global sector leadership..."
"DLA Piper sharpens sector strategy to focus on seven key areas..."
"Our sector-based approach ensures that we know our clients' businesses extremely well..."
I guess many of you may have come across headlines or articles like these when conducting research on different law firms for your job applications — but do you actually know what it means by having a "sector strategy" and why does that even matter to you?
In this newsletter, I will break down to you how more and more law firms are now heading towards a "sector-led" approach to distinguish themselves from their competitors. I will further delve into the pros and cons of such strategy, as well as how you can make the best use of such information to stand out in your next job applications or interviews. But before that...
Why Law Firm Strategies Matter?
Back when I studied my Master of Corporate Law Degree at Cambridge, one module called "Law Firm as a Business" really stood out to me, as that was the very first time when I realised that law firms are just like farmers selling their crops — they need to sell and market their services, as well as figure out innovative ways to attract new clients consistently. This is also what truly distinguishes law practice from law school, because legal knowledge alone will not be enough for you to excel in this industry once you start working as a trainee or a more senior lawyer.
In my opinion, understanding law firm strategies is important for at least two key reasons (depending on what stage of career you are at right now).
Firstly, if you are an aspiring lawyer trying to secure job offers at one of those global law firms, understanding the intricacies of how they position themselves in this competitive legal market, as well as what they do to maintain competitiveness, attract new clients or retain existing clients is crucial. These questions may come up in your next application form or interview. In that case, being able to comfortably talk about a firm's strategy is a sign of strong commercial awareness — a quality that most law firms are explicitly looking for these days in their future trainees.
Secondly, if you aspire to become a law firm partner one day (or if you are currently a more senior lawyer or business development member of the firm), learning different law firm strategies will enable you to better understand the unique selling points (USPs) of your own firm in order to win client pitches. Say if you're a smaller law firm, why should clients use your legal services instead of a magic circle or mega-size firm? To successfully outcompete other market players, you will need to carve out your own USPs to elevate your firm's marketing strategy. Therefore, what I'm going to discuss today is highly relevant to your legal career, your firm's profitability (and ultimately your paycheck too).
What is a "Sector-Focused" Approach?
Traditionally, most law firms have divided themselves into various practice areas (e.g. employment, real estate, corporate, competition law). However, such classification tends to be more lawyer-friendly as it categorises a firm's work by different types of legal expertise. At some point and, given the fierce competition, law firms started thinking about ways to tailor their services more closely to their target clients, pushing the former to come up with a more client-friendly label that can appeal to even non-legal professionals.
As we all know, each industry or sector has its own customs, business practices and conventions that do not constitute black letter law. Because of this, clients are more drawn to lawyers that actually understand their industry languages and traditions. And at the end of the day, not every law firm is a mega-size firm: most firms don't have loads of resources to impress every single client in every sector. Hence, they need to make a wise sacrifice at some point in order to stand out from the crowd — for some, focusing on a small, carefully selected number of clients/industries is seemingly the solution.
For those who don't know, back in 2003, Norton Rose Fulbright was the first global law firm that took the unprecedented approach to differentiating itself by organising the firm along industry lines. Ever since, more and more firms have been venturing into an industry classification, and nowadays many of them take pride in this so-called "sector-led" approach — some examples include Osborne Clarke, Gowling, Simmons & Simmons, Burges Salmon and Clyde & Co... to name but a few. Notably, there are also other US players that adopt a similar industry-focused approach, including Orrick, Herrington & Sutcliffe LLP, Reed Smith, Dechert LLP and Baker Botts LLP. Therefore, this sector label has gradually become one of the most commonly used law firm strategies to attract loyal clients in specific sectors.
In other words, the trend for adopting a "sectoral-led" approach in attracting new clients is primarily driven by heightened competition between city law firms and the need for them to differentiate themselves from other competitors. While the practice area label is more easily understandable by legal professionals and thus more firm-focused, the sector label is a categorisation based on different types of client business and thus more client-centric.
Pros of a "Sector-Focused" Approach?
One of the key advantages of using a "sector-led" approach is to maintain a firm's competitiveness and increase profitability. At the end of the day, even city law firms need to recognise their limits because they simply cannot please every client in every sector. Thus, adopting a sector-based strategy allows a firm to target specific clients by nurturing long-standing client relationships in specific sectors.
For example, Osborne Clarke achieved a 19% international revenue jump in 2023/24 and its investment in priority sectors including ESG and energy and utilities was cited as one of the reasons for such increased profitability. Similarly, we witnessed a 15% increase in revenue for Reed Smith's London office in 2024, seemingly driven by its "sector-focused" approach across five key industries, including financial services, life sciences and healthcare, energy and natural resources, transportation and media and entertainment. Hogan Lovells also reported strong, steady growth in 2024 thanks particularly to its "sector-driven" focus on energy evolution and digital transformation.
Secondly, instead of labelling firms based on its practice areas, a sector labelling allows a law firm to market or price its legal services in terms that are more easily comprehensible to industry clients. We briefly touched upon this point in the last section, and clients are naturally drawn to firms that market themselves as understanding the sector in which they operate, compared to firms that opt for a more traditional "practice area" model.
Thirdly, law firms nowadays want to become their client's trusted commercial advisor, not just a legal advisor. On the other hand, clients are also looking for lawyers who are essentially speaking the same language as them. In other words, it's easier to retain them as clients if a firm has built a strong reputation in certain sectors. To achieve that, many firms also regularly attend industry events and talks to interact with clients in specific sectors to gradually build their reputation.
From a client retention point of view, the importance of having a sectoral focus is further evident from DLA Piper's partnership with Axiom Consulting in 2017 to create a client retention data analytics programme, which reveals that one of the four key variables directly affecting client retention is adding an industry expert to the team. This is not surprising, because imagine if you're a client, you probably will feel you are in much safer hands if the lawyers you are working with possess astute business knowledge on your specific business.
Lastly, from a (future) trainee solicitor's perspective, working at a sector-focused law firm means that you will be able to observe an industry client's business through different lens —as you rotate across various seats, you will be able to assist such client from the different practice areas you are placed in, thereby deepening your understanding of sector-specific knowledge and latest trends. In addition, these firms probably encourage their trainees and lawyers to be seconded to their industry clients to foster long-term client relationships. This makes such firms an ideal environment for aspiring lawyers to be developed into a more commercially-savvy lawyer.
Drawbacks of a "Sector-Focused" Approach?
Compared to global law firms that market themselves as an "all-rounder" or "one-stop-shop" such as Baker McKenzie and Dentons, firms using a "sector-focused" approach as their marketing strategy may run the risk of pigeonholing themselves to certain sectors only. In other words, if a client is looking for a law firm that can accommodate their diverse business needs in a mega-deal, they may prefer a big law firm that is good at almost everything, rather than a "sector-focused" firm that is an expert only in a few key areas. Therefore, the latter may also lose out on the chance to become the sole legal advisor for a big-name client.
Secondly, as a general rule, smaller and more boutique firms will do better by marketing themselves as a "specialist", or tapping into specific markets. Note that by "smaller firms", I don't mean small, high street firms, but just firms that may not necessarily have the size or international presence of mega-firms like Linklaters and Clifford Chance. For example, a mega-size firm with prominent international presence may be better of marketing itself as an "one-stop-shop" to attract large corporate and institutional clients, which may need full-service offerings to assist them with a wide variety of matters.
That being said, the "sector strategy" and the full-service offerings are not mutually exclusive. Having worked at one of the world's biggest law firms myself, I notice that even mega-firms may internally have their own industry groups or sector classifications. The only difference is that those big firms may not specifically highlight the sector division as their UPS, because sometimes being able to handle everything "under one roof" is a better attraction point for their international clientele.
So... How Can I Use this Information in Applications and Interviews?
"How do we differ from our competitors?"
"What draws you to our firm in particular?"
I think most aspiring lawyers are familiar with questions like these in application forms or interviews. When answering these questions, a generic references to how a firm's international network or top-tier practice area stands out to you probably isn't the best way of addressing them, as almost all global law firms have cross-jurisdictional capability and expertise in certain practice areas these days. An excellent response requires tailoring your answer based on the market positioning and international strategy of each individual law firm. Very often, pointing out their "sector-focused" approach is a good starting point, and sometimes that may even be one of the few things that a firm really takes pride on.
Therefore, when writing your training contract or job applications (and if you are applying to the aforementioned law firms with a sector strategy), it is highly recommended for you to:
recognise the uniqueness of such "sector-focused" strategy;
show your understanding of how it actually works to help this firm retain existing clients or attract new industry clients to maintain its competitiveness; and
explain why you are specifically drawn to such approach, and perhaps give 1-2 examples of your past work experiences or extra-curricular activities, where you were exposed to any of those key sectors or developed an interest in working with certain industry clients.
In other words, citing their "sector-focused" strategy as one of the reasons why certain law firms appeal to you, or being able to differentiate a firm from its competitors based on such approach, can showcase the depth of your research and understanding of how an international law firm operates as a business.
Having worked with many of my students on the training contract application process, I'm also surprised by how difficult law firm interviews and assessment centres are nowadays. It's not uncommon for applicants to get asked the following commercial awareness questions at interviews:
"What are clients looking for these days when selecting their legal service provider?
"How can a law firm maintain competitiveness, retain its existing clients, or get new clients?"
In questions like these, being able to highlight a law firm's international strategy (which most candidates don't even have an idea that it's a thing) and confidently explain their strategic importance to the firm will significantly demonstrate your commercial awareness.
Notably, some law firms even specifically highlight their "sector-focused" approach and try to test your understanding of this in their application questions. See below for examples from Gowling's and BCLP's application form this year, which requires an in-depth understanding of their priority client sectors before you answer these questions:
"Gowling WLG is a sector-focused, international law firm. Our Trainees have the opportunity to work in different sectors during their Training Contract. If you could choose to work in one of our Sectors, which would you choose and why does it interest you?"
"What do you find attractive about BCLP's sectors/departments and which area(s) are you interested in having exposure to in your Training Contract and why?"
Again, in questions like these, being able to explain how such "sector-focused" strategy makes this firm unique and thus benefits you as a trainee solicitor is critical for your answer to stand out.
Conclusion
In summary, understanding the shift towards a "sector-led" approach in law firms is essential for aspiring lawyers, practitioners and even other business development staff. Adopting the right strategy not only enables law firms to differentiate themselves in a highly competitive market but also offers numerous advantages, such as nurturing long-standing client relationships, enhancing marketability and fostering industry expertise. However, this approach also comes with limitations, including potential pigeonholing and reduced flexibility for big-name clients who crave for full-service offerings.
For training contract applicants, demonstrating commercial awareness of a firm's "sector-focused" strategy — and articulating how it aligns with your skills, interests, personal and professional ambitions — can set you apart in job applications and interviews. By appreciating how these strategic considerations shape a firm's business operations and client relationships, you may even be able to "wow" the interviewers.
Remember to subscribe to my newsletter for more contents like this!
