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How much should law firms spend on marketing?

February 15, 2021

How much should law firms spend on marketing in order to get results? Where should you start? And what on earth does a marketing spend cover?

Law firms can spend (on average) anywhere between 0.5-5% of their total yearly revenue on marketing. The common marketing costs include management of employees or agencies, tools and subscriptions as well as the media spend on adverts.

First let’s clarify what we mean by “results”.  This simply means a return on investment.

A return on investment means how many case-opens and paying clients you get from your marketing spend.  That’s right, marketing is about selling your services and getting you more paying clients.

Close your eyes and have a think...

How much do you think a small to medium sized business would spend on their marketing as a percentage of yearly revenue?

That was fun wasn't it... what was the answer?

In 13 years of working with businesses on their marketing, the average marketing spend has been anywhere between 0.5% and 5% of overall revenue. Though this varies dramatically by industry.

Retailers and startups are keener to spend more (remember this is just based on my experience of working in different sectors).

The latter often have funding or investment for marketing purposes and the former operate in a competitive industry, where a fast turn around of marketing campaigns is vital. 

Luckily for law firms, the buyers we are targeting are slightly less impulsive than the retail industry, though still have a very urgent need for your services in most cases.

What does a marketing spend mean? 

It's important to establish what marketing costs are and where you might spend the money.

To keep it simple, marketing spend falls into three areas:

 1 - Management cost

The management cost is the cost of your staff or the people who are managing, executing and reporting on your strategy. This is the expert team. The engine that drives awareness and new enquiries.

2 - Media costs

Media costs, for example paying to have your brand appear in places like Google search or YouTube or across social media platforms like Facebook, LinkedIn and Twitter. There is usually a cost associated with creatives such as video or visual ads as well as copywriting.

3 - Tools & subscriptions

The cost of any tools to assist the experts in delivering projects. For example you might use video equipment or tools to help provide data for things like SEO strategies. (Or you could use an agency who have all the tools already!)

So how much should your law firm spend on marketing?

I'm going to share with you some stats from some of the legal clients we work with. These should help you to get an indication of the results you might expect (I've given more detail about what each column means under the table). 

Results are taken as a monthly average in the UK and this table refers specifically to spend on adverts online. 

Channel

Monthly Cost

Avg. Monthly CPM

Avg. Monthly CPE

Avg. Enquiry Cost

Google Ads

£70 - £3500

£1.76 - £76.59

£1.40

£18-£50

Social Media

£35 - £340

£2.05

£0.05

£35-£120

  • Google Ads includes the Google search network, Google display network and Youtube
  • Social media includes Facebook and Instagram
  • Monthly cost is is the amount spend on the ads either per click or per 1000 people who saw them (CPM)
  • Avg. Monthly CPM is the cost per 1000 people seeing an ad
  • Avg. Monthly CPE is the cost per engagement, either a click, video view or interaction with a social media post
  • Avg. Enquiry Cost is the total amount spent divided by the number of enquiries. Please note, in most cases telephone enquiries were not tracked so this figure is likely to be lower than the total number of enquiries when phone calls are also taken into consideration.

Find out how to get legal clients.

Deciding what to spend on ads

So from the data above you might expect that investing £250 per month in Google Ads as a starting point could result in anywhere between 5-13 relevant enquiries (depending on the service you are trying to promote and how well your ads campaign is put together.)

The beauty of digital marketing is that it is scalable (both up and down).

You can adjust budgets daily, hourly or as often as needed based on real-time data to enable you to get more results for your money.

So you can invest more in what is working - and make decisions on anything that is not performing. 

We recommend starting off with small spends when it comes to advertising channels and then increase them gradually as they work.

I always advise clients who have never tried Google Ads campaigns before to start off with at least £250 per month. Particularly as Google often offers new accounts free credit of up to £120 per month. Find out more here

After a month you should have a clear idea of how much you've spent, where you spent it and what your return on investment was.

Check out how to promote your law firm online for more detail on average timescales for results.

Your approach might look something like this:

Scaling your ad spend

step 1

Research and set up

Determine your targeting and have your creatives (text ads, visual ads and video ads) ready to test. You'll also want to make sure your destination (your website sales page) is optimised and relevant to your ads. 

step 2

Invest £5-10 per day

This should be enough for you to review how things are working after a few days. Both Google and Facebook use data to try and make your campaigns more efficient, so you may want to top-load your budget at the start, get more data and then optimise your campaigns from there. 

step 3

Use the data and scale up

After a few weeks you'll be aware of which audiences are the most cost effective and you can make decisions about adjusting budgets or testing new audiences. 

Management costs

This is the expertise to plan and deliver your marketing strategy. A law firm's marketing team may look something like this:

  • Marketing manager - to design and help deliver your strategy, ensuring you are getting a return for your spend
  • PPC / Ads specialist - to create ad campaigns across Google, Youtube and Social media channels
  • SEO specialist - to optimise content for Google and website visitors as well as building links from other sites
  •  Designer - for ad visuals, banners and video
  • Copywriter - for website content, SEO, ad copy and branding
  • Webmaster / developer - for maintaining and developing your website  

This can cost anywhere between £3000 and £15,000 per month if employing someone directly. Or as little as £500 - £2000 if using an agency who know what they are doing

What should your law firm's marketing spend be?

The formula for deciding how much to spend on law firm marketing is actually quite straightforward.

Take any of your services, say for example personal injury.

Calculate what the average cost for an ideal personal injury case would bring to your law firm.

Then calculate what percentage of that ideal cost you would be prepared to spend on getting that client in the first place.

So for example if you're able to take 15% of a client's compensation award as your legal fee then you can quickly see how spending a fraction of that upfront on a marketing campaign to get that client in the first place was cost-effective.

Of course with services like civil litigation, it could be a year or two (at least) before you are paid for your work with that client - so you want to be aware of cashflow. 

Making sure you get a return on your marketing spend

Take the total cost of the management of your marketing department + the cost of any media and subscriptions and then divide that by the total number of enquiries that come in each month. 

This gives you the total cost per enquiry for your marketing spend.

You can then calculate what % of those enquiries lead to case opens. 

If you’d like help with your marketing strategy or understanding more about costs vs. results, get in touch and we can point you in the right direction. Contact us here

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