Best Practice: How to maximize your law firm's marketing dollars
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm is a 6 attorney firm in downtown Chicago. Our practice is a litigation boutique focused on representing individuals in personal injury and divorce matters. We do a fair amount of advertising and have had mixed results. We tried radio and limited TV ads, have an innovative website, have done some pay per click ads on the web and are now considering a lead referral service. Do you have any suggestions concerning what we should be investing in marketing and what we should be doing to maximize our results?
A. Studies that have been conducted indicate that law firms that provide services to business firms (B2B) spend approximately 2.4% of fee revenue on marketing. However, law firms that focus on individual consumers (retail law if you will) spend much more - 10%+ of fee revenues on marketing - especially if strong referral networks are not in place. I have several PI, SSDI, Elder Law and Estate Planning firm clients that are spending 10%+ of their fee revenue or greater on marketing. I have some extremely successful PI firm clients spending 20% of their revenue on marketing.
The amount of appropriate investment can depend upon referral networks in place. I have successful PI and Estate Planning firms that are getting all of their business from their referral networks and spending next to nothing on marketing and advertising. (By referrals I am speaking about professional referrals not involving a referral fee and client referrals. If referral fees are involved they should be considered a marketing cost) So it depends upon your situation, the type of cases you are going after, etc.
Measure Return on Marketing Investment (ROMI)
As important as the amount of your marketing investment is to your program - you must constantly measure the effectiveness of your various marketing program activities and know at all times your ROMI (return on marketing investment). Then you determine what is working for you and what is not working - then fine tune your program.
Implement Effective Inquiry/Lead Management and Client In-Take Systems
Many firms spend enormous amount on marketing and then drop the ball on managing and processing prospective client inquiries. Inquiries that are generated through the internet or advertising are colder leads than referrals from other clients or referral sources. Cold inquiries expect 24/7 response - often you only have a two-hour window to get back with these inquiries or they will contact someone else. Before you make major investments in TV, Radio, Pay-Per-Click, or Internet Referral Programs make sure that you have put in place the appropriate inquiry/lead management and client in-take infrastructure and staffed accordingly. Otherwise you may find that you are getting the inquiries/leads but are not being successful in converting them into paying clients.
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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.