As a grad student in theoretical physics (which is what my degree will say), there are different subfields of theoretical physics which people specialize in. There are some rare cases where professors work in several different subfields (one of the professor at Chicago is a very good example), but they all started in one subfield and are able to work in several because there are often some similarities in many problems. Like the dissipation in a nonfermi liquid or a black hole can be studied with similar methods to those in fluid mechanics and things like the Higgs mechanism simultaneously occurs in condensed matter systems (actually where it was first discovered) and in particle physics.