The ROI of a Law Firm Marketing Budget
Like any business, a legal practice needs to allocate marketing and business development resources to acquire new clients and keep them engaged. Gone are the days of throwing money at vague promotional campaigns or passive legal directory listings that only promise “exposure” with no accountable results. So, how much should your law firm’s marketing budget stretch? And where should you allocate that spend to get the best bang for your buck? Current digital, social, and mobile technologies revolutionized how marketing dollars are justified by tracking spend through to revenue results, delivering a measurable Return-On-Investment (ROI).
Growth vs Maintenance
Firms seeking to grow by adding new clients will need to allocate a little more to their marketing promotions. A business plan for growth typically includes marketing and business development spend equal to 15-20% of topline income, which translates into about five-to-seven dollars earned for every marketing dollar spent. On the other hand, more established practices may be able to get away with spending 5-10% of gross receipts solely to maintain their existing client base. It’s less expensive to keep an existing client engaged than it is to find a new one, but that maintenance cost still isn’t zero.
Why bother marketing to your existing clients when they should be happy with the operational results you deliver, especially after long years of reliable service? Because your competitors are talking to your clients, with promises of doing even better. And you might not find out about it until your client places their legal claims elsewhere.
What’s in a Legal Marketing Budget?
A law firm’s marketing and business development budget is comprised of multiple components, all working together.
- People: Firstly, you need to put the right people on the job. Today, marketers are technologists and social engineers with skills in web analytics, email communications, search engine optimization, paid placements, social media, and more. An attorney who has focused their education and training on practicing law, but uses up their time to do marketing instead, will probably get better results bringing trained experts on board.
- Tools: Marketing tech today includes tracking and analytics, lead databases, email platforms, social media management bots, social media platforms, affiliate marketing networks, automated artificial intelligence (AI) algorithms, and Cloud-based integration. Even the best people need the right tools to execute profitable marketing campaigns in the current digital age.
- Ad Spend: Once you have the people and tools in place, it’s time to place your promotions in outlets and sponsorships that can reach your audience. Media, associations, even “organic” placements like search engines or social feeds all charge to advertise or promote your message on their platform. Accountable spend options like Pay-Per-Click (PPC) or even Cost-Per-Acquisition (CPA) allow you more control over the ROI of your marketing budget.
- Travel & Entertainment: Though attending conferences and entertaining clients is still a consideration, the cost of such efforts—especially with the health risks that may be involved during a pandemic—can present a challenge to the ROI of your marketing budget. Nevertheless, there are times when a smile and a handshake can close the deal. The trick is balancing cost versus risk and results.
Cutting Marketing Costs Intelligently
It’s tempting to reduce costs by cutting marketing budgets, especially in an economic downturn. But cutting indiscriminately can cause you to lose ground with both new and existing business. If you must cut budgets, then it’s critical to do so strategically. The most effective way to minimize marketing spend while maximizing ROI is to outsource your firm’s legal marketing and business development tasks. A marketing agency can promote you without being on payroll or adding expensive overhead. You need to know where to look first and for firms it’s currently LinkedIn, Google, and Facebook for the lion’s share. Other platforms such as Instagram and Tik Tok have their uses for firms too though, just not as adopted yet which will give you an advantage to grow faster through organic reach on these platforms. According to Forbes Magazine, “Advertising platforms have become incredibly complex in recent years. Simply checking the wrong box can inflate your spend and result in a negative ROI quickly.”¹ They go on to say the goal “is to align yourself with a quality digital marketing agency that will create a winning strategy and do the monthly tasks needed to continually generate leads.”¹
Also, consider sharing the cost of your marketing and business development with other firms across the country in a legal network. For a fraction of the spend for an in-house single-firm marketing team, a legal network like The National List of Attorneys (The NL) aggregates modest resources from individual firms across the country and communicates with clients on behalf of the entire attorney membership.
Through the power of outsourcing and aggregation, attorney network members of The NL leverage centralized legal marketing and business development experience with cutting-edge technology that promotes contingency-fee practices with NL Advocate, while also delivering premium client services to keep important forward-flow business engaged.
As an additional benefit of legal network membership, other member attorneys will preferentially look to you when they need counsel outside of their own jurisdiction. If your law firm is looking to save on marketing ad business development costs while maximizing your measurable, trackable ROI, a legal network with digital marketing agency chops like The NL is the best of both worlds for your firm.
How effective are your marketing efforts on your ROI right now? Join the discussion in The NL Community Forum on LinkedIn and let us know!
About The National List of Attorneys
The NL is the online B2B networking hub where premier contingency-fee attorneys connect and work with the business clients who need their help to get paid what they’re fairly due. We use claim performance data to provide the best legal referrals, advance the legal industry’s use of technology, and develop tailored client-focused strategies to maximize financial outcomes of legal claims.
¹ Forbes Magazine, Effective Marketing For Law Firms: A Step-By-Step Guide To Growing Your Clientele, Maxwell 2022