First year law firm budget9/6/2023 Whether or not your law firm earns thousands, millions, or indeed billions, the simple truth is that you need to know how to create an effective budget for your marketing. According to the 2018 legal report by the Legal Marketing Association and Bloomberg Law, the world’s largest law firm by revenue – Kirkland & Ellis, who earned $4.1 billion dollars in 2019/2020 – will be among those spending 2.67% of their revenue on marketing, which equates to an eye-watering $84.5 million dollars. It is these figures that have led to a huge increase in legal marketing. This year it has been reported that 62% of legal businesses are looking to increase their focus on marketing efforts and business development – a figure surely inspired by the fact that 41% of law firms that have increased focus and expenditure in marketing have reported it as the single factor that has been most effective in driving new business. As legal marketing becomes more prevalent, marketing budgets have risen, with law firms slowly realising they need to increase their marketing outlay in order to develop their business. Now everything is more sophisticated, more strategic and more connected both within the online sphere and outside it. In the last few years, the legal marketing landscape has changed significantly the days of simply providing a good service and relying on the wheels of the referral network to turn are over. This guide will go through the best steps to create your law firm’s marketing budget to maximise your return on investment and win you the most new leads. Most law firms that do have marketing budgets spend between 2 and 15% of their revenue on their marketing output. It is also vital to remember that a smaller marketing budget well spent is better than a bigger marketing budget used poorly. Effective legal marketing budgets should be based on your individual law firms and a variety of factors. But if you are a smaller firm spending at that lower end, the odds are that your marketing might not deliver the results you desire. Most law firms that do have marketing budgets spend between 2 and 15% of their revenue on their marketing output, with the majority of outlays skewing more towards the lower end of those figures. However, doing this could mean that your law firm is missing out on a lot of potential clients and revenue. It seems that relying on word of mouth and referrals is still the preferred method of attracting new clients. According to recent American Bar Association reports, fewer than half (46%) of law firms have a marketing budget, and only 14% of solo law practices have a defined budget. In short, there is no one figure that you should spend. So How Much Should I Spend on Legal Marketing? Measurement is the key to a successful marketing strategy and the budget is the start point for that process. Without knowing your budget, you will not be able to measure your success, which could lead to a marketing strategy that is operating blindly and does not deliver. This month, we begin with the question of how much money you should spend on your law marketing budget.ĭeciding your budget should be the first thing you do before you make any other decisions on your legal marketing strategy. Hence, we are launching a new monthly feature on legal marketing designed to guide you through the law marketing landscape and help you to gain a better understanding of how to effectively market your business.
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