Bruce MacEwen had an absolutely fascinating post on the troubles of the US law firm Cadwalader.
The short story is that the firm achieved five year's rapid growth reaching profits per partner of $US2.9 million. In doing so, the firm focused on one main market area, structured finance. To Chairman Bob Link, profits were all.
The collapse in the US financial markets badly affected the firm. Their attempts to build alternative practice areas failed. Now the firm has been forced into dramatic retreat.
I will leave you to read Bruce's story. I do not think that the firm's problems were in any way linked to corporate approaches as Bruce seemed to imply at one point in his post, but to greed combined with strategic mistakes.
There is nothing wrong necessarily with a focus on one market area, nor indeed with dependence on a small number of clients so long as you recognise and compensate for the risks involved. However, the problem is that when you are on a roll you become blinded to those risks.