One question frequently asked by lawyers is, “What is the right percentage of revenue I should invest in my marketing/business development efforts?’”
The truth is there is no definite answer. It depends on your firm’s goals, strategies, your priorities, and the status. Once you answer these questions you begin to put together a budget and begin planning.
The Importance of Legal Marketing and Business Development
Marketing is indeed crucial to any law firm—it can lead to the firm’s success or its collapse. Without marketing, your firm will not get enough exposure to generate the leads you need in order help you build your client list, generate more revenues, and increase your profits.
Many times when an attorney hears ‘marketing’ they think increased expenses. However I’m sure you’ve heard the idiom, “It takes money to make money.” Keep that in mind as you continue reading.
The 5-Percent Rule
If you’re unsure of how to determine the right budget to spend on marketing for your law firm, consider the 5% rule.
Your marketing budget covers all costs for advertising, promotions, and public relations. Good examples might be Facebook ads, Instagram page promotions, social media post boosts, Google AdWords, print ads, and other related expenses.
Essentially, your budget depends on your current revenue status. Experts say that about 2-5% of your revenue should be spent on marketing. However, if you are generating less than $5 million a year in services, you may want to consider going for a range of 10% to 12%.
The 10% rule is best applied if you want to grow your practice rapidly. Generally, though, if you have already built a good marketing foundation and are more focused on keeping your practice on top, then the 5% rule is reasonable enough.
Building a Good Marketing Foundation
There are a lot of things to remember when building a good legal practice marketing foundation. At the top of this list would be your brand, your marketing strategies, and the marketing tools you will use.
To strengthen your brand, you have to know your advantages/differentiators. Know who your competitors are. Know their strengths and weaknesses. Determine your competitive advantage over other firms that offer the same service as yours.
Once you have researched your competition, then you can strategize on how to make your firm and your brand distinct from them. You can now build a marketing plan and work out your priorities. This is where you decide which areas of your practice you should focus on more and which areas you can afford to allocate a smaller budget to out of the 5% you’ve set aside.
Once you have the budget and plan it’s time to figure out the marketing tools you will use. Listed below are some of the most effective marketing/business development tools you can utilize for your practice:
Website. Your law firm website is where you can showcase the services that you offer. Make sure you have an attractive web design, great content, and a strong call to action.
Social media. Social media marketing is a major part of growing any business today. You get to promote your firm with just one click, and you can instantly increase your customer engagement. Although this requires a larger budget, the profit you get out of it can be worth it.
Email marketing and LinkedIn. Email marketing and LinkedIn may take a little more time to generate revenue, but these tools will help you build your online profile and allow you to leave a lasting impression on potential clients and customers.
Google AdWords. The biggest problem most law firms will run into with Google AdWords is simply making sure they’ve got the long list of configuration options set up correctly. You also must understand the bidding and budgeting process before you begin to ensure your campaign is cost effective. While this tool can be very useful, it may be worth hiring an AdWords expert outside of your firm with SEO knowledge for a better outcome.
Collaborations with bloggers and social media influencers. Collaborations with bloggers and social media influencers are a fun way to market your practice. Not only will you get some exposure with the help of influential people, you will also get tips on how to make your practice more visible in the online world.
The Bottom Line
Legal Marketing and Business Development is just a matter of taking risks.In order to build a solid marketing foundation, you have to set clear and objective goals and spend a little bit of money. Don’t be afraid to spend 5% of your revenue on marketing—if it’s going to mean growth for your firm, it’s going to be money well spent.
If you’re a lawyer or law firm that needs help creating a marketing strategy, please contact us for a free consultation.