Solicitors Marketing Budgets

How Do You Set Your Law Firm Marketing Budget?

When it comes to setting a marketing budget for solicitors, I understand that many solicitors do not know where to start. Whilst a very basic method is to take 5% of turnover as a starting point, this could lead you to missing out on a huge opportunity to make substantial profits.

The Reason Using 5% Could Be Costing You Thousands

It is best to remove ourselves from the legal world to look at this more objectively. Imagine you were guaranteed that if you spent £100 with your bookmaker, you would receive £150 in return, within one month. How many £100 would you give to your bookmaker? Surely the only answer is as much as you could possibly lay your hands on.

Moving back to the legal marketing world, if you are able to accurately show that for every £100 you spend on one marketing method you receive a return on investment of £150 in legal fees, how much would you spend? I accept that this is not a completely straightforward analogy, but it does prove or over-prove a point. That is, if you know how much each £ of marketing spend produces in fees, it makes it much easier to spend more and more on marketing. All big businesses understand this, but I meet many solicitors that struggle to grasp the concept.

However, there is one area where it is very accurately understood and that is the field of personal injury law. Solicitors will pay from £200 to £600+ for a personal injury case because they know that they are receiving a new instruction and it will generate a guaranteed minimum return in fees of at least £600 profit but usually more.

The inherent problem with this type of marketing (referral fee marketing that is) in that it is not building a future pipeline of leads for your practice. Once the client has been processed they are normally lost to the original provider of the instruction. It is much better to spend the money on your own initiatives, whether they are website marketing, print advertising or marketing your own client database. If you can spend the £100 on your own marketing initiatives, you have the opportunity to generate future instructions from the same client. The initial £ can be turned into an initial £160 will instruction, followed by a £1,000 employment instruction and a £3,000 personal injury instruction a few years later. The £100 initial spend has now created over £4,000 in fees for your practice.

The vital point to grasp with all marketing is that you must record how much you spend on every aspect of your marketing (figure 1), and how much that generates in fees (figure 2). If figure 2 beats figure 1 by a good percentage, then you have to carry on increasing the spend as long as it continues to provide you with a return.

Record, record, record…

The vital two parts of this message I hope have been clearly received, however to clarify they are:

  • Record how much of a return on investment you receive for each aspect of your marketing
  • If your marketing is working, do not limit yourself by budget, spend more to make more profits.

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Law Firm Marketing

Case Study

From biggest fee earner to no fee earning whilst doubling turnover

I’d been looking for somebody to help me with marketing for a while, and I came across Nick on Google.

That was three years ago, and in that time it’s fair to say that he’s had a massive impact on my business, and my life as a result.

In the early days, my goal was simple and specific: increase the turnover of the business so that I could take more money out of the business.

I had an amount in mind, and I expected it to take years to get there, but when I achieved it in just six months, it began to dawn on me that this guy really knew what he was talking about.

As a result of that early success, and with Nick’s help, I realised that my expectations were too low, and what I could actually achieve, with the right thinking and guidance, was far beyond what I’d ever imagined.

What Nick saw – and what he made me see – was that my business had fantastic potential, but to realise that potential, things needed to change.

Even before Nick got involved, we were getting a decent volume of leads, but it was what was happening to the leads that was the problem.

We weren’t tracking them, there was no process in place and to top it all off, we didn’t have a clear pricing structure, which meant that we were nowhere near as profitable as we could be.

And that’s where Nick came into his own. He built us a bespoke lead generation and sales process, and the results were staggering.

We pretty much doubled our turnover, allowing me to build a four-person sales and marketing team that gets us more leads and more sales.

Of course, Nick’s Google Adwords expertise has been a key part of our growth, and today it’s a hugely profitable marketing pillar for us.

But regardless of the medias or mechanisms we’ve used to grow over the last three years, it’s been Nick’s rock solid marketing plan that underpins it all.

He’s stopped me trying this and that, and got me to focus on the things that’ll have the biggest impact on the business.

And I think there’s a lot more to come – we still haven’t implemented everything that Nick has given us to do, and when we do, I reckon we’ve got around another £250,000 of revenue per year to add to our figures.

And it’s not just the business that’s seen a transformation – it’s been a personal transformation too.

When Nick first got involved, I was the biggest fee earner, and consequently I was reluctant to stop getting involved in cases.

Nick eventually made me see that if I was serious about growing this business, that needed to change and as time has gone on I’ve taken on less and less work – now I don’t do any of it.

And I only wish I’d done it earlier, because the result has been me having more time to build the business, and spending time with the people that are important to me.

Not only that, but the business is stronger, because it’s much less dependent on me.

Nick was right about that one, as he has been about pretty much everything else – it pains me to say it, but it’s true!