If you’re wondering how much a law firm like yours should spend on marketing, this blog post is for you. Deciding on a marketing budget for your law firm is such a vital component of your law firm’s success in generating cases.

The challenging variable in law firm marketing is that some of your marketing isn’t going to work. Some strategies are going to clearly work, while others will become worthwhile tests. However, the biggest problem area that we’ve noticed after working with over a hundred law firms is the segment of your marketing that works, but isn’t track-able.

Regardless, it is always smart to have a clear marketing budget, so that you can enter each quarter knowing what you’re getting into, based on your goals.

Below you’ll find 8 questions to ask yourself when determining what your law firm’s marketing budget should be.

#1: What are my firms growth goals for the next six months?

The general rule of thumb when it comes to deciding what your law firm’s marketing budget should be is to look at your gross revenue from prior years. Most companies choose to allocate about 15% of their company’s gross revenue to their marketing budgets.

But, for most law firms and attorneys, there are different variables that must be weighed.

If you’re a solo practitioner, you may not be looking to drastically grow because that also means that you’ll have to hire additional paralegals, support staff and attorneys. 

If that’s the case, you’ll likely want to stay below the 15% threshold.

On the other hand, if you’re a multiple attorney firm and you have the bandwith to drastically increase the number of cases and clients whom you serve, you may want to go beyond the 15% threshold. 

So, ask yourself what your growth goals for your firm are. 

#2: How committed are you to online marketing?

Perhaps you’ve dabbled in online marketing (paid search or search engine optimization) before. You gained a few clients from it, making it a worthwhile investment. However, you’re unsure about how much of your marketing budget you should be spending on it?

If you’re invested in online marketing, we recommend allocating 60% of your marketing budget towards online endeavors. This can include: paid search campaigns, search engine optimization campaigns, paid social campaigns, generating client reviews, etc. 

On the other hand, if your law firm is more of a B2B firm (business law, corporate law, etc) then you’ll likely want to invest just around 30% of your entire marketing budget to online. 

#3: How competitive is your practice area and local market?

The truth of the matter is that location and practice area play a huge role in determining your marketing budget. 

If you’re in a major metropolitan area (New York, Chicago, Los Angeles just to name a few) then your marketing campaigns are going to be much more expensive and competitive.

While there are certainly areas where you can strategically spend your budget, you’ll want to factor this into your overall marketing budget. 

On the flip side, if you’re in a smaller geographic market such as: Boston, Philadelphia, Tampa, Fort Lauderdale – or further out from a major city – you’ll be able to more comfortably allocate a smaller portion of your marketing budget towards online marketing.

#4: What is the ROI of your current or past marketing efforts?

It’s important to continually audit your current and past marketing efforts.

This data will likely tell you where to spend your marketing dollars, and how much you’ll need to sustain or exceed the results that were gleaned from those campaigns. 

In the same breath, you’ll be able to quickly understand which marketing campaigns or tactics absolutely did not work, and you’ll be able to safely remove the budget you would allocate for that area. 

#5: Are you going to have an experimental budget?

As the age old saying in marketing goes: if it can be tested, it should be.

The backbone of any great marketing strategy involves testing. Whether that means testing new marketing strategies and platforms, or having additional marketing budget to test your creative (copy, visuals, calls to action, etc). 

You’ll need to allocate a certain portion of your budget solely for testing. 

If you’d prefer to go the “safer” route, and allocate more marketing dollars towards channels and strategies that have worked for you in the past, that’s okay too.

#6: What tier is your law firm?

At the SMB Team, we like to classify our clients into 3 different tiers. This allows us to clearly identify which “bucket” our clients fall into. 

So, how is this helpful to you? 

Understanding where your law firm stacks up will help you identify what kind of marketing dollars are needed in order to face your competition, see results, and have marketing campaigns that actually produce results.

Tier 1:

Typically speaking, Tier 1 clients are solo-practitioners. Most times, they have ventured off from their “big name” law firms, and started their own practice. These solo-practitioners are looking to increase the amount of leads, build brand awareness, and compete with the “big name” law firms in their local areas.

Their marketing strategies, budgets and tactics will be unique to them.

Typical marketing budget: $17,000 / year. 

Tier 2:

Tier 2 law firms and practices are multi-attorney firms. They generally have around 2-3 attorneys as well as a paralegal who is answering the phones. In some cases, Tier 2 clients have receptionists who are dedicated to answering the phones when potential clients call the law office.

Their marketing strategies, budgets and tactics will be unique to them. They may be more inclined to experiment with additional marketing strategies, as well as increase their marketing budget YoY.

This tier of law firm does not have an internal marketing person. Therefore, they will be relying on an agency or a few agencies to help them assist in creating their marketing strategies. 

Typical marketing budget: $36,000 / year.

Tier 3:

Tier 3 law firms have 1-3 partners, 2-3 attorneys, 2 paralegals and a dedicated receptionist or secretary answering the phones.

Additionally, Tier 3 law firms have an internal marketing director or strategist who is creating the marketing plan and budget each year. 

Typical marketing budget: $50,000+ / year.

#7: Are you able to handle more leads?

If you saw a theme in our prior point, you’ll notice that having a dedicated staff member answering the phone calls is an extremely important part of maximizing your marketing strategies.

Are you and your law firm truly equipped to handle more leads with an increased marketing budget? Will you have a dedicated person who is available during business hours (and in some cases, beyond). 

If not, you may want to second guess spending more money on marketing without having a dedicated person to field the phone calls from incoming leads and clients. 

#8: What are your main KPI’s (Key Performance Indictaors)?

Are you going to be measuring cost per case? Cost per quality lead?

How do you want to measure the success that you’re having from your law firms marketing campaigns. 

This matters when setting your law firm’s marketing budget because it will help you identify areas of opportunity as well as areas for improvement.