Over the course of my career, I have been privileged to speak at many legal industry events. Two of the most common topics I am asked to speak on are ethics with regard to legal marketing and measuring the return on investment of a marketing expenditure. As part of my presentations, I sought to answer the following questions with regard to marketing expenditures:
- How much can I spend?
- How much should I spend?
- What should I spend on?
- How much does everyone else spend?
- Is my spend working?
Calculating a Law Firm Marketing Budget
There are a variety of methods businesses can use to calculate the amount of money they should be spending on marketing. The most commonly used methods in the legal industry include:
- Percentage of Revenue: Law firms (except for personal injury firms) spend 2% to 5% of gross revenues on marketing. Other industries budget between 5% and 15%.
- Competitive Parity: Defensive strategy wherein you allocate based upon what competitors do to defend your market position.
- Objective-Based: Set marketing goals for the year so you know what your budget is expected to cover.
In addition to the actual mathematical formula, other factors to take into consideration include: (1) location, (2) size of firm, and (3) areas of practice. Furthermore, how marketing funds are allocated is driven by what you do, how competitive it is, and how your target customers behave. Importantly, once you’ve set your law firm marketing budget, spend what you have allocated and don’t wuss out.
Three Ways Law Firms Can Ethically Generate Business
Digital Content Marketing: Law firms should utilize a content marketing strategy to keep their websites fresh and updated with helpful, appropriate content. Adding content doesn’t only have to come in the form of blog posts – it can include local news, case results, speaking engagements, and awards, among other formats. When you do blog (and you should), your blogs should not be solely self-promotional. If all you do with your blogging is focus on tooting your own horn, don’t do it. Be helpful – provide useful information and it will be read and shared. Law firms can keep their digital content organized, avoid repetition of topics, and ensure blog authors stay on task by using an editorial calendar for their ethical legal marketing.
Email Marketing: Make your existing contacts work for you via database mining. If you don’t tell your contacts what you are working on, who will? You can use email marketing to announce firm news, throw parties and host events, and drive traffic to your existing digital properties. Email marketing allows law firms to manage business relationships and the data and information associated with them in a singular clearinghouse. Depending upon your level of expertise, you can create lead nurturing sequences to help automate the follow up and make your email marketing more scalable.
Video Marketing: Video highlights the attorney, not just the brand, and explains complex information simply. Video distribution is mostly free, video is in high demand, and most importantly, video is accessible to lawyers (inexpensive to make) and users (hearing and visually impaired, etc.). Be sure to include videos of lawyers from your firm and testimonials from clients and/or others. If you have a solo or small practice, you will be the featured “talking head” of your firm in online video. If you are part of a larger firm, I recommend shooting for diversity within your video subjects. You should include racial, gender, age, and ethnic diversity whenever possible so you relate to a broader audience online.
Monitor Your Metrics and Return on Investment
When I speak with lawyers, they often reveal they do not know their true acquisition cost numbers with regard to leads or cases. Many believe that knowing these numbers is actually impossible. Fortunately for us, the success of almost any marketing campaign can and should be measured with appropriate metrics.
Google Analytics: If you haven’t done it already, you will need a free Google Analytics account. It’s pretty simple – head over to analytics.google.com and set up a free account. Next you need to connect Google Analytics to your website. Once you’ve taken these steps, you should be sure you can monitor how much traffic your website is getting, which pages of content are the most successful, how much time visitors spend on your site, where your website traffic is coming from, and what conversions are taking place. You can include goal and event tracking to measure clicks to call, clicks to email, form submissions, and more.
Social Media Key Performance Indicators: All social media platforms come with free included analytics functionality. You should monitor and track your social media Key Performance Indicators (KPIs) accordingly, including your reach, engagement, following, link clicks, and conversions.
Online Call Tracking and Recording: Whether you’re starting a new firm and need a new phone number or you already have a phone number, you can use online call tracking and recording software to figure out exactly where each and every call is coming from. This is essential for ensuring you can track the ROI of your marketing efforts. Think phone calls aren’t as important anymore? Nope! 43% of all search-related conversions happen over the phone.
Acquisition Costs: Your law firm should continually assess and track its acquisition costs per lead and per case. You must conduct monthly, quarterly, and/or yearly reviews of your marketing metrics to adjust expenditures according to how campaigns are performing. This will help you ensure your ethical legal marketing is also profitable!
Two of my previous presentations on these topics can be found at the links below:
- Ethical Digital Marketing for Social Security Disability – American Association for Justice Social Security Success Seminar
- Ethical Legal Marketing and Determining Your Return on Investment – Houston Bar Association Law Practice Management Section Luncheon