Do you wonder what your law firm marketing budget should be?
According to studies, you’re not alone. The question of how much to spend promoting the firm is one that provokes a wide range of answers and speculation within the industry.
That presumes, of course, that your law firm even has a marketing budget. As it turns out, according to the American Bar Association, those who have a defined marketing budget are still in a minority, at 46 percent. And that’s just the number for multi-attorney firms. The same study shows that only 14 percent of solo practitioners have a marketing budget.
Just because most firms don’t have a budget, it doesn’t mean they don’t care about marketing. Another study reported of the firms that do have a budget, 62 percent are looking to increase their marketing spend.
Factors to consider
How much you need to spend to have an effective marketing effort depends on several factors.
- What’s your practice area? Law is a very wide-ranging industry with a lot of possible niches. The personal injury lawyer needs a steady supply of new clients and has to reach a mass audience to find them. The corporate law firm can count on building a long-term client base and has a very narrow field in which to target. Marketing is equally important to both firms, but the personal injury firm will face higher costs.
- Do you have a recognizable brand? If your firm has been in the area for a long time, it will take a very modest amount to just keep the brand name at the top of people’s mind for when they need your services. But an up-and-comer will flood the market with a lot more advertising to get their name drilled into people’s consciousness.
- What is your market size? A small town will have very little competition. A big city will have plenty of firms competing for business. Within big cities, there’s a considerable difference between a place like New York and one like Milwaukee.
- How much more new business can you handle? If the partners are working close to full capacity, then a big marketing spend might bring in more clients than you can provide good service for. Conversely, if you plan to hire 3 new associates in the next year, you’ll want prospects for them to be talking with.
The bottom line
The spectrum of marketing spend ranges anywhere from 2 percent of gross revenue on the low end to 18 percent on the high end. You have to make the decision, based on the factors above, where your firm should fit within that range.
Keep in mind that marketing cannot be strictly defined as advertising campaigns. Your law firm is surely part of several associations, both for local business and for the legal profession in particular. That, and the cost of any events you attend for them, are marketing costs. So is the cost of building and maintaining your website, and everything from business cards to wining and dining a potential client.
Once you have your law firm’s marketing budget in place, you can start to define your return on investment (ROI), which will allow you to further refine your budget in the years ahead.