I’m going to share with you the average amount spent on marketing by law firms I work with, plus the fool proof method for you to decide how much your firm should be investing.
The average cost of marketing for law firms is about 0.5 percent to 5 percent of their entire yearly revenue. Management of personnel or agencies, tools and subscriptions, as well as media expenditures on advertising are all typical marketing expenditures.
By “marketing for law firms” we are referring to generating awareness and enquiries that can be turned into paying clients.
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 more eager to spend in my experience.
The latter often have funding or investment for marketing purposes and the former operates in a competitive industry, where a fast turn around of marketing campaigns is vital.
For legal practices, we believe that buyers in the legal industry are somewhat less impulsive than those in retail, though they have a very pressing requirement for your services in most situations.
What is marketing spend?
The management cost is the amount you spend on your staff to carry out, report on, and manage the strategy. This is the staff of experts. The engine that generates awareness and new enquiries.
There are many different types of marketing expenses, such as paying to have your brand displayed on Google search, YouTube, or other social media platforms like Facebook, LinkedIn, and Twitter. There is often a fee for creatives such as video or visual ads as well as copywriting.
Tools & Subscriptions
The fees associated with any equipment or resources that will help the specialists in completing projects. Software, for example, can be used to assist provide data for things like SEO strategies. (Or you might hire someone who has all of the tools!)
Average cost vs. Result
I’m going to give you some data from a few of our legal customers. These should assist you in determining the outcomes that you might anticipate (I’ve added an explanation for each column under the table).
- 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.
Deciding what to spend on ads
So, based on the data above, investing £250 each month in Google Ads might produce anywhere from 5-13 relevant inquiries (depending on the service you wish to market and how well your ad campaigns are put together.)
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.
How to scale your ad spend
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.
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.
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.
This is the skill set required to create and implement your marketing plan. A law firm’s marketing department may include staff with various specializations.
- The marketing expert in charge of developing and assisting in the implementation of your strategy, assuring a profit return for your investment
- You will be responsible for ad campaigns on Google, Youtube and social media platforms.
- SEO specialist – to optimise content for Google and website visitors as well as build 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.