Lawyer Monthly - August 2021 Edition

62 WWW.LAWYER-MONTHLY.COM | AUG 2021 Different types of law cost different amounts to market. For example, in paid search engine marketing, personal injury lawyers cost four times as much to advertise as criminal defence lawyers. You can see from the chart below how the different types of law that you practice will have an effect on your budget. For example, a personal injury law firm will need to allow more budget for marketing than an estate planning firm because the market is that much more competitive and therefore expensive to market in. By utilising this chart as a guide, we can easily calculate the increase or reduction in budget depending on your business’s area of legal practice. Within this area, another factor you need to consider along with the type of law you practice is whether you serve business clients or if you are B2C (personal injury lawyer, divorce lawyer, etc.), because this too will have a bearing on your budget. Traditionally, any industry serving the B2C market is more expensive to market to, so if you are a commercial litigation lawyer, your advertising spend is likely to be less than a firm of divorce lawyers. If you want to work off the old-fashioned marketing budget calculation and fall in line with what the bigger law firms are spending, then all you need to do is take your revenue – either existing or desired for the year – and work out 3% of that figure. For example: Yearly gross revenue £100,000 X 0.03 (Your marketing budget percentage based on top law firms) = Your yearly marketing budget (£3,000) This may not seem like a lot to you. That is because one of the reasons that the top law firms spend a small percentage on marketing is because, as a proportion of their revenue, the figures are a lot bigger due to the size of their revenue (and, crucially, their profit margins – more margin means more money for marketing). For a company that turns over £100,000 annually, a mere £3,000 for the year is probably not going to serve you very well in a competitive marketing environment. Your marketing budget needs to reflect your revenue and your goals. If you look at the marketing spend of the top law firms graph 2 above, you will spot a pattern. As the revenue decreases, the marketing spend as a percentage of revenue increases with it. It would also be worth mentioning that, from a marketing perspective, law firms spend very little compared to other industries. In fact, across sectors, the average SME spends around 11% of its revenue on marketing. But law firms that are prone to relying on referrals still spend very little by comparison. My tip would be to treat your law firm like an SME in another sector and ignore what the other law firms are doing. If 41% of legal businesses are driving more leads as a result of increased marketing spend, then surely it would make sense to allocate more budget and use it well in order to get more customers? If you did this and used the same calculation as shown above, your legal marketing budget would increase to £11,000, and with a good marketing strategy you could be very confident of earning a very significant ROI (return on investment) with that budget. type of law B2B or B2C? Firm Revenue Estate Planning Intellectual Property Employment Corporate Bankruptcy Criminal Defence Immigration Divorce Personal Injury Top 100 2.67 % 2.71 % 2.86 % Outside Top 200 Top 101-200 Figure 1 Figure 2 £4.41 £5.99 £6.17 £8.18 £8.32 £10.71 £12.91 £18.54 £41.70 COST PER CLICK TOP LAW FIRM MARKETING SPENDS