Understanding the importance of marketing your law firm and actually finding room in your budget to do so are very different things. Most lawyers understand that marketing is an essential part of their firm’s success. But far fewer sit down and carve out room in their budgets to accomplish their marketing goals.
The good news is marketing your firm doesn’t need to bust your budget. Whether you’re a small firm just getting started or you’re part of a well-established firm that has grown over the years, you can afford an investment in marketing.
How Much Does the Average Law Firm Budget for Marketing?
Marketing budgets vary a great deal. However, the average firm spends between 2 and 10 percent of its revenue on advertising and marketing efforts. The specific amount varies based on the size of the firm and the marketing strategies they want to implement. Other factors that affect the size of a firm’s marketing budget include:
- Area of practice
- Approach to client acquisition
- Access to effective marketing channels
- Cost-per-client acquisition
- Time spent on marketing plans
How Much Should Your Firm Spend on Marketing?
Knowing how much the average firm spends to market helps you plan your marketing budget, but it isn’t enough to finalize your decisions. Having a general guideline is great but it’s just a start – it’s general.
To create a budget for your firm you’ll need to consider a few specific things. To begin with, ask yourself:
- What are my marketing goals? To achieve success, your goals must be clear and you must be willing to fund those goals. You can have the world’s most elaborate and potentially successful marketing plan, but if you don’t put the funding behind it, it will fail.
- Why am I marketing my firm? The general answer is “because I want it to be successful,” but what does success mean to you? The goal of marketing is to generate leads and convert them into clients.
Some attorneys cite well-meaning reasons for marketing their firm, such as establishing goodwill in the community or reaching out to people who need legal advice. These are great secondary outcomes for marketing your firm, but if you’re going to make a financial investment in marketing, you need to see a concrete return. You need to get clients from your efforts.
What to Consider Before Setting a Budget
Now that you’ve established a clear foundation on which to build your marketing plans and budget for those plans, consider the following:
- What kind of law does your firm practice? Personal injury, family law, and bankruptcy practices – those that work directly with clients (B2C) – tend to spend more on marketing.
- What are your firm’s profit margins? The bigger your margin the more you have to invest back into marketing. This might seem obvious, but it’s important for lawyers not to put too much pressure on themselves. If you’re working in a low-profit margin field, you shouldn’t expect to be able to invest major money into marketing.
- What’s your firm’s target market? Lawyers that work directly with consumers need to spend more on marketing. You might need to spend more, too, if you’re focused on a specialized market. The better able you are to define your ideal client the better you’ll be able to accurately target them.
- What is your geographical location? Additionally, how large is the location you want to target? Firms in more densely populated urban areas tend to focus on smaller geographic regions.
- What are your competitors doing and how much do you think they’re spending? You don’t want to copy them, but you do want to keep up with them.
- What is your firm’s sales cycle? Some areas of law have short sales cycles, such as criminal law or personal injury. In these cases, an event occurs and the client looks for an attorney shortly after the event. Estate planning and family law firms, on the other hand, have longer sales cycles. Legal services might not be needed immediately and could be needed throughout a person’s life.
- What’s your average client’s lifetime value? This is somewhat related to the previous question. The greater the value of each client, the more sense it makes to invest heavily in getting one client on board. If a client’s value is less, the opposite is true. You don’t want to spend too much time or money on each client.
- What are you going to do to handle an increase in clients when your marketing efforts are successful? Marketing doesn’t end with the outreach. You’ll need to service clients once they come to you and planning for that needs to happen before they arrive.
Determining what to spend on marketing your law firm can be challenging. And even after you have a budget, you’ll need to decide how to spend it and what tools are going to give you the greatest return. Legal Web Design can help with these decisions and more. To schedule a consultation to discuss your situation, contact us at 888-480-3585.