How Much Should I Spend on Marketing My Law Firm?

How Much Does an Average Law Firm Spend on Marketing?

Experts recommend dedicating anywhere from 2% to 18% of a business’s gross revenue to marketing, but according to a 2018 report by the Legal Marketing Association, law firms allocate an average of 6.7% of revenue to marketing

While it is typical for a firm to allocate anywhere from 3%-10% of revenue to marketing, it varies greatly by area of practice. A practice that needs a steady stream of new clients, such as a personal injury or a workers’ compensation firm, will have to spend much more on SEO or mass media advertising than a firm that caters to hospitals or government agencies.

Marketing and Advertising are Not Interchangeable Terms

Also, remember that “marketing” and “advertising” are not synonyms.  Your law firm’s marketing budget will be used to cover expenses related to :

  • Building and maintaining a website
  • Attending conferences and networking events
  • Designing and making business cards, signs, and other collateral
  • Search Engine Optimization
  • Google Adwords
  • Content marketing
  • Sponsorships
  • Memberships in industry, trade or professional organizations
  • Client entertainment
  • Mass media ads (television, radio, billboards, etc.)

It is unlikely that you will engage in all of these activities at first, but it is important to note that “marketing” does not mean “advertising.”

Marketing a “B2C” practice such as a personal injury, workers’ compensation, or family law practice should spend 5%-12% of gross revenue.

The 2018 Deloitte CMO Survey indicated that b2c businesses allocate the highest percentage of revenue to marketing, with 18% of gross revenue spent on marketing. A personal injury, workers’ compensation, or family law attorney falls squarely into the category of “b2c business.”  A practice that needs to reach the masses will often have to spend in this range in order to achieve the desired results.

Estimate the Potential ROI

For a smaller law practice, it may be a bit scary to look at the costs involved with marketing to the public, but when you consider the possible results, it becomes clear why so many firms are able to dedicate such a generous amount of their revenue to marketing.

For a firm that needs to reach the general public, SEO and mass media advertising tend to be the most effective channels.  Clients looking for representation in areas of practice such as divorce, personal injury, or bankruptcy will usually turn to Google or reach out to a firm they are already familiar with because of advertisements.

Example of a Personal Injury Firm in Cleveland

In the case of fdslaw.com, the firm is ranking on page one of Google for a number of keywords related to its area of practice.

According to Ahrefs, the firm gets an estimated 867 visitors each month from organic search.

Ahrefs’ estimates are usually underreported by a factor of 2-10, so it is entirely likely that the site gets in the ballpark of 2k-5k visitors a month.  If the site averages 3k visitors a month and 2% of those visitors contact the firm, that would be 70 leads a month.  If 10% of those leads turn into “good cases,” this firm would be looking at 7 cases a month worth $3k-$5k each.

Given those numbers, it’s a lot less scary to dedicate $3k/mo to advertising.

How much should you spend to market a new law firm vs. an established one?

If you decide to build a brand for your firm, it is important to consider the stage of your practice. If your practice does not have a brand (a name that everyone in your market recognizes) you should consider reinvesting 10%-15% of your gross revenue in marketing your firm. An established practice may be able to get away with a spend of 2%-5% to maintain its brand.

Marketing a B2B Law Firm

If your practice provides legal services to other businesses, your marketing will differ entirely from a practice that serves the general public. According to the aforementioned 2018 survey by Deloitte, the “service consulting” industry reports allocating 12% of gross revenues to marketing. For a firm whose area of focus could be described as service consulting, it could be beneficial for that firm to allocate 5%-10% of gross revenue to marketing depending on its stage of growth.

Second, Consider Your Firm’s Growth Stage

Are you just hanging out a shingle in your local town? Do you have a practice that is well-known in a given market but wishes to expand? Are you considered an industry leader and aim to simply maintain that status?

If you are just starting out in a market, it doesn’t matter whether you’ve just graduated from law school or if you’ve already become an industry leader. In the eyes of your target, you are unknown and undifferentiated.

In order for you to achieve some level of brand awareness and differentiation, you’re going to have to dedicate resources. You are likely going to have to dedicate 8%-15% of your gross revenue if you wish to establish a brand with a unique value proposition.



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