How to Establish a Law Firm Marketing Budget

Many law firms fall into the trap of a “set it and forget it” marketing strategy in which they overpay for marketing or advertising services and fail to really measure their effectiveness. Getting “some” clients from your paid marketing campaign might feel good, but if you aren’t analyzing your ROI, you may in fact be losing money over time. In this post, we provide some guidelines about how to establish a law firm marketing budget to meet your goals and ensure you’re getting a positive ROI on your spend.

Brand Building vs. Generating Leads

The first thing you need to understand is the difference between two broad categories of marketing: building a brand vs. acquiring new leads.

Although they are closely intertwined, the major distinction is that building a brand happens gradually and requires persistent effort, while acquiring leads can happen instantly from a single paid advertising channel.

Building a strong brand is a longterm strategy. It’s how you make your law firm known in your community, and amongst your target clientele. It’s generally less expensive, but it’s slower and harder to measure the results. Brand building activities may include:

New leads will be generated over time from your brand building activities. But there are also a number of paid lead generation methods that can create new leads much faster. Lead generation is not cheap, but it can be effective. Some of the common channels include:

  • PPC (pay-per-click) advertising on Google, Avvo, Facebook, etc.
  • Lead generation services: LegalMatch, LegalZoom’s attorney services, TotalAttorneys, etc.
  • State Bar lawyer referral services

If you only focus on brand building activities, you’re not likely to see short-term results, which can be discouraging. However, strictly focusing on lead generation activities can get expensive in a hurry, and unlike brand building, there are not as many longterm benefits.

For those reasons, a good marketing strategy will allocate some percentage of the budget to both of these types of activities.

Test and Analyze On a Small Scale

Effective marketing is quite the opposite of “set it and forget it.” It requires a lot of testing, iteration, analysis, and improvement. That’s why it’s so important to do these three things prior to paying for any marketing.

The first step to establish a law firm marketing budget is to test out some paid channels and collect data. Don’t just jump right in and spend your entire budget. You should plan to spend a little money across each marketing or advertising channel for a few months, just to collect data.

You need to get an idea of how much money you have to spend on each channel to get a single lead, and how likely that lead is to convert into a new client. It may be easiest to focus on just a single channel at a time.

It’s essential to have a good lead management system for keeping track of every new lead, how that lead found you (chances are, not all your new leads will come from the marketing channel you’re testing), and whether or not that lead ended up hiring.

Ultimately, your goal will be to measure the average cost to acquire a new client through each marketing channel, as well as an estimate of your average client’s lifetime value.

Keep in mind that certain strategies like SEO and brand building can take months before producing any results, so you will have to invest longer term into those strategies to get the required data.

Set Your Growth Goals

Although the average law firm reportedly spends 3.4% of its revenue on marketing, there are no hard and fast rules on this. Setting your marketing budget to equal a certain percentage of your revenues is not necessarily the right way to do it.

Instead, you should establish your marketing budget based on data in order to achieve your specific goals for growth. So once you’ve tested to figure out approximately how much it costs to acquire a client through each channel, the next step is to define your growth goals.

This involves deciding how much you realistically want to grow, and doing some basic math to determine where you will get your new leads from and how much you will have to spend to do so. Let’s illustrate this with a simple example:

Say your firm currently averages $100K in monthly revenue, by bringing in an average of 50 new client matters that are worth $2,000 each. You’d like to double that to $200K per month, which means you need to find a way to generate 50 additional new matters per month.

Your firm works with tech-savvy, younger clients, so you plan to do all of your marketing online. In your small scale testing, you determined that it costs about $10o per lead through PPC ads and those leads convert at 60%. Leads from SEO and content marketing cost $20 per lead, but they only convert at 10%.

This means spending $1000 on PPC will net you about 6 new clients, while spending $1000 on content marketing and SEO will net you about 5 new clients. While PPC may be slightly more effective for bringing in clients, keep in mind that SEO and content marketing are much more effective longterm toward building your brand. So it’s probably a good idea to allocate money to both strategies when establishing your budget.

Ramp Up Your Budget and Measure Results

Armed with all of this data, you can now finally implement a marketing budget. Based on your data and goals, you should plan to spend about $9,000 per month across some mix of PPC and SEO marketing in order to achieve your desired outcome.

You may notice that this number is significantly higher than the 3.4% average marketing spend, but that’s not necessarily a problem as long as your cashflow is in order. If you are trying to grow aggressively, e.g. doubling your monthly revenue like in our example, a higher marketing budget is probably the only option.

Also, you should always continue to track your incoming leads, and revisit your data often to ensure there is enough lead volume coming from each channel, and that the cost per lead is not increasing significantly over time.

If you find that a particular channel stops producing leads, or is generating a negative ROI, adjust your marketing budget accordingly by adding on additional channels and replacing the ineffective ones.


As you can see, establishing a marketing budget is not exactly easy and it shouldn’t just be a standard percentage of your revenue because that’s what everyone else does. That type of strategy won’t achieve your growth goals and might even end up costing you a lot of money.

Proper budgeting involves a lot of data collection and analysis. That’s why we are such big advocates of using a law firm CRM. CRMs make it much easier to capture this type of data about your leads, and analyze it over time.

If you don’t have a system in place for tracking data, paying for marketing is really just a shot in the dark. Sure, you might get some new clients out of it. But if you intend to actually grow your law firm, your success will be dependent on the ability to generate new leads for less money than you earn when they decide to hire you.

Finding channels with a positive ROI is the real secret to a establishing a law firm marketing budget, and the only way to do it is through proper data analysis.


Photo Credit: via Flickr (Used under the Creative Commons Attribution License)

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