Law Firm Budgeting

How Much Should A Law Firm Spend On Marketing?

As a business and law firm owner, it is easy to fall into the trap of looking at your marketing spending as an expense to your business. Although technically it is an expense, it is an investment into the future vision you have for your firm. If you want to hire legal assistants, paralegals, and associates, then you will need to continue to generate more and more revenue year over year.


There are a lot of nuances to consider when determining how much of your revenue you should invest in your firm's marketing, but the goal of this article is to give you perspective and give you thoughts on how to approach determining your marketing budget.


If you need help determining what your marketing budget should be and the next steps you should take based on the current state of your law firm, contact us today for a free evaluation.


Average Marketing Spend For Law Firms

There is a lot of money being spent on different marketing ventures in the legal industry. Soma law firms don’t spend money on marketing efforts and some can spend up to 20% of their revenue on marketing efforts.


According to the U.S. Small Business Administration, small businesses that are in a B2C industry (law firms) should spend on average 11.8% of their revenue on their marketing efforts. This includes all B2C businesses, so it is important to recognize that there is some variation depending on the industry that the business is in.


From our experience, the typical amount a small law firm spends on marketing is around 5% of its revenue, but there is nuance in every small law firm's business. If you are just dipping your toe in the water of marketing, you may spend more than 10% of your revenue to reach a higher level of revenue that balances your ratio out to 11.8%. It's important to have a strong and proven plan if you want to invest in your firm's marketing efforts.


How To Approach Your Law Firm’s Marketing Budget

Instead of focusing on the average in the country for small law firms, I think it is important to focus on the state of your law firm and what you want for your law firm in the future. If we evaluate your goals, we could determine if you want to continue to be a solo practice or if you want to transition to a small law firm and have staff on board. If your goal is to grow through staff or grow your income, then you will need to take steps and branch into some marketing efforts to generate more cases for your firm.


When it comes to budgeting, something that most people don't mention is what that looks like initially when you determine you want to take that step. There is risk involved with your initial investment in marketing and the value of that risk is reaching the next phase in the growth of your firm. Although the national average marketing budget for a small B2C business is 11.8% of your revenue, that percentage may be higher in month 1 if you have never spent money on marketing before. Since that percentage will be higher in month 1, it is extremely important to identify the right marketing strategy or marketing partner so that you have a higher chance of reaching that next stage in your firm.


You can learn more about how to choose a marketing partner here


How Much Should Lawyers Spend On SEO vs Paid Advertising

When developing your marketing strategy for your firm, you could potentially come across the question of whether you should spend your marketing dollars on SEO or PPC / Ads. If you will be taking this jump into marketing, it is important to work with an experienced legal marketing partner because you will get the experience and knowledge they have gained working with many other law firms. Instead of determining what you should be doing on a day-to-day basis, it is a better strategy to speak to an experienced professional on this topic. The legal industry is one of the most competitive industries in the marketing world and as a small law firm, you don't want to risk spending money and losing it all because you didn't have the knowledge to compete in this competitive landscape.


When you are evaluating marketing partners that will handle your SEO and PPC / Ads, as a small law firm, you'll want to find a partner that also has experience working with limited budgets and other small law firms. It is also important to choose a partner that includes SEO in their management fee and does not charge you a percentage of your ad spend (some marketing firms will take a percentage of your ad budget and pay themselves). A lot of marketing partners will piecemeal tasks which will end up costing a ton for a small law firm.


Although this topic of SEO vs Paid Advertising can be a large conversation, your best bet is to do both, but have an experienced marketing partner by your side through this to help you not waste marketing dollars.


Minimum PPC & Ad Budget For Lawyers

The best part about PPC (Pay Per Click) and other Ad efforts is that you have the flexibility to adjust your budget up and down based on the return you are getting and based on your current capacity. As a general practice, if you will be spending money on Google Ads or any other advertising platform, you should start with Google’s Local Service Ads platform. This platform allows you to only pay when you generate a qualified lead and allows you to dispute phone calls that are spam or not cases you serve.


As a solo or small law firm, you most likely don't have the largest budget available to spend on advertising. This platform allows you to start small and have the greatest chance of getting a return on your investment. If you start with a $500 budget, set up your Local Service Ads account, and let it run for a month, then you can determine the return you're getting on your investment. As a small firm, you should start small with your advertising budget, validate the return on that spend, and then ramp up your spending. Once you can validate that you can generate revenue from the platform, then you can feel more confident in spending more with that platform and strategy.


Need Help Evaluating Your Firm & Mapping Out A Marketing Strategy?

There is a lot that goes into determining how much you should spend on marketing. Although there are national averages that you can work off of, there is a lot more nuance to them. It can be overwhelming to try and weigh that nuance and come up with an in-depth strategy while also trying to handle your legal work.


Our team of strategists is here to help you navigate these waters. We spend every day analyzing different law firms' marketing strategies and implementing our strategies for our clients across the legal industry. We have experience across many different areas of law with great success. Contact us for a free marketing evaluation if you need help developing your firm’s marketing strategy.

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