There's a niche I jumped into on a lark. Originally I thought it was a micro niche. It turns out there is a huge lawsuit(s) brewing, and I see more and more law firms every day jumping on the bandwagon and targeting keywords. Google AdWords tool is not showing many exact match searches for the keywords these law firms are targeting, but I am getting traffic coming in on some of them.

So, what I did was I looked at what they think they are competing for, and I bought all the domain names :-)

Should I sit on them? Develop them first and then try to shop them around? Or put them on the market? Will they pay?

I'd develop them first. Lawsuits can take a long time and you'll get more money.

Definitely develop them. With very little work you can maximize your potential profit. Putting them on the market now wouldn't yield a whole lot of money.