Attorneys often ask how much they should spend on marketing their law firm each year. It is a simple fact that marketing is going to cost money. However, it's how you spend your money that makes a difference. You want to create a marketing budget that matches your goals.
The American Lawyer reports that the AM Law 200 firms spend about 2 percent of gross revenues on marketing related expenses. And that number is actually low. Law firm management consultancies have long held that law firms (except for personal injury firms, who must spend more) should plan on spending about 2 to 5 percent of gross revenues on their marketing efforts.
A law firm marketing budget typically covers costs for advertising, promotion and public relations. Law firms should also plan on including funding for the following:
- Alumni programs
- Attendance at industry, trade or professional society meetings
- Client costs
- Events and Seminars
- Mailings and communications
- Web site design and maintenance
- CLE courses
- Charitable contributions
Of course, these are just suggestions and there are many other marketing-related items that can also be included. It can be difficult to compare marketing budgets. Determining what you should spend will depend upon your location, the size of your firm, the firm's areas of practice and your expectations for the results of your efforts. If your goal is to increase your client base for existing practice areas or add new practice areas, your costs may be greater than if you are just trying to maintain your revenue stream.
Additionally, attorneys and law firms that depend strictly on traditional marketing techniques are quickly learning that many "tried and true methods" no longer perform like they once did. Attorneys could dramatically improve their results by updating their marketing programs to include more current practices.
Traditional marketing methods such as TV advertisements, print advertisements, targeted mailers, newsletters and other traditional advertising all have their strengths and weaknesses and still have a strong place in the media mix. That said, now is the time to invest in web based marketing. Traditional marketing methods still work, but the added value of a strong web based marketing program keeps you in front of potential clients when there is the greatest chance to influence and capture their attention.
Whatever marketing method you use, and regardless of your budget, there are still marketing principles to keep in mind that will ensure the best return oo investment. We leave you with three tips to make sure that you and your law firm spend your money effectively.
Spend All That You Allocate. Many businesses do not understand the need to spend money on marketing. The marketing budget is often viewed as a part of the overall budget that can be raided when other urgent expenses arise, instead of as a business investment.
Factor in Time As Well As Money. Spending your entire marketing budget won't help your business if there is no activity to match -- for example, face to face networking at trade shows, speaking at industry meetings, becoming active in industry groups etc.
Evaluate Your ROI. If you're going to spend money on marketing, you need to make sure that your investment is paying off. Any marketing effort should be evaluated after a few weeks or months have passed, and compared against profits. While the metric will vary by activity, it can be done. Analyzing your efforts can give you helpful feedback as you work to finalize your message.
With the right budget and mix of marketing activities, law firms can grow their businesses in a meaningful manner.