Law students — read the paper to help find your niche (and a job)
The title is a bit glib but consider taking the action steps below if you have no idea what kind of law you might want to practice.
Look at Areas with High Demand and Low Supply. It will be helpful if you have an interest in the area of course but it will also be helpful if the area in which you are interested is active and constantly changing (high demand). Tax is a good example both on the demand side and the supply side. The demand is high because the law is constantly changing so the need for technical tax lawyers is up. The supply is low because there seems to be a disproportionate amount of older folks practicing in the area (particularly at law firms). This phenomenon is not unusual given the nature of the practice that generally requires additional training and/or schooling beyond the JD.
Follow closely current events that relate to the passage of new laws (particularly major legislation). The newspaper is a start but you may also want to check out industry periodicals that go deeper into the substance. Some obvious examples of areas in the news are tax (Bush rates expiring, AMT patch needed, various tax reform proposals), health law (Affordable Care Act, Medicare, etc.), and securities (Dodd/Frank, Volcker rule, etc.). You can also go to congress.gov to find out what subject areas are generating the most introduced legislation.
Dig deeper into topics that interest you. There are many sources that get into the substance. If you know lawyers that practice in a certain area, ask what they read. Ask your professor what folks practicing in the area read or what he or she reads. Use this research to help you pick one or two subject areas (niche) within the large practice area. Your career services department may provide some suggestions as well.
Find out where this law is being practiced. Once you have an area or areas and a subject within that area, find out for where folks practice this type of law -- government agencies, law firms, congress (on policy side), courts, non-profit organizations, companies (big and small), etc. Also, are there particular places in the country where these jobs are more abundant (i.e., DC for regulatory work, NY for corporate/securities transactional work)? Again, the career services department may be helpful, as will professors.
Network to find out what folks actually do. After you have your area, the subject or two within that area, and a sense of where folks practice that type or law, contact folks that practice the niche you identified and ask them about their path and what their typical day looks like.