Not at all! Let's say you're not a lawyer, but the owner of a bicycle repair shop. When you launch your shop's website, are you ethically and legally bound not to use the key phrase “Dayton bicycle repair shop” because it's also being used by your competitor down the street? The fact is that “Dayton bicycle repair shop” is a simple description of your business, not a phrase that can be copyrighted or legally protected.
For this reason, it is perfectly legal, and ethical, to build your site around the phrase “Dayton personal injury lawyer” and give your competition a run for its money. In fact, if you have been wondering how to get personal injury clients, targeting the most obvious key phrase may be essential
Of course, what you also need to consider is just how firmly entrenched that competing firm is for that particularly search phrase, and whether you can use cutting-edge SEO tactics to dislodge them from their #1 position in Google search results. It may be that the competing firm has been coasting for quite a while, and the reason they're showing high up in Google results for “Dayton personal injury lawyer” isn't because they have particularly good SEO, but because no one else has targeted that phrase. In that case, you may very well succeed in beating them at their own game, and placing higher in results for that phrase.
On the other hand, if you examine your competitor's site and determine that their SEO practices are rock-solid, you need to make a decision. You can either launch a full frontal assault by building your site around “Dayton personal injury lawyer,” or you can do an end-run around the perimeter and concentrate on less competitive phrases like “Dayton car accident lawyer” or “Dayton work accident lawyer.”