As I pointed out in this earlier post, finding a niche can help grow your practice.  And, as Tom Kane pointed out months ago (don’t know how I missed it), a niche can help a solo survive in the big city.  And now, there’s yet another article, Finding a Niche (Jan. 2006) that describes how lawyers with niche litigation practices in specific localities are beating biglaw firms big time for big clients.  (see also this earlier post).  Here’s Larry Bodine’s money quote from the article:

You do have to target,” he says. “That’s the difference. You never used to have to do that. Nobody wants a generalist. A generalist is nothing to nobody. Everybody wants an expert. Stick to a niche. Be an inch wide and a mile deep, and then you will get all the business that’s related to the niche.

I still don’t think it’s wise to put all your eggs in one basket, and to focus on a niche to the exclusion of all practice areas.  Based on nothing but my own personal experience, I’d advise a 70-30 or 80-20 split, with the larger portion of your work devoted to the niche.  A diverse practice portfolio will protect you if one of those areas takes a downturn and also ensures that you won’t get bored with so deep a focus on one particular practice area.   Plus, a niche can help subsidize other areas of practice that you may want to explore but aren’t yet profitable.