Clients often ask us how much they should spend on marketing their personal injury law firm each year. Here are a couple of tidbits of information to start off your thinking in the New Year.
Typically regional defense firms with under a hundred attorneys will spend around 3-4% of their gross annual fees, exclusive of firm marketing staff and consulting fees. By reviewing what the average firm of that size and stature in your geographic area will bill in fees, you can estimate what they spend to grow their business.
Determining what you should spend will depend upon your location, the size of your firm, your firm’s areas of practice and your expectations for the results of your efforts. If your goal is to increase your client base for existing practice areas or add new practice areas your costs may be greater than if you are just trying to maintain your revenue stream.
Advertising costs vary by market, so the larger the market you are located in, the more it will cost to create a noticeable presence. For example, TV advertising in the New York metropolitan area is by far more costly than in Indianapolis. The broadcast costs are largely based on the number of viewers. That larger population also equates to a greater cost in other types of advertising, such as newspaper, radio and outdoor, as the cost to reach as many potential clients as possible is based on a cost per thousand.
If your firm focuses on personal injury, bankruptcy, family law or other consumer based practices you will most likely require a higher budget. Anecdotally, clients generally feel that they have gotten the greatest bang for their buck when they spend 15%-20% of their gross annual fees for their marketing programs. Your marketing will have to focus on referrals from other law firms and by reaching as many new prospects as possible, whether it be on the web, in print or broadcast, or better yet, a combination of all three.
So why is it that defense firms can get away with allocating such a smaller percentage of their fees to marketing? It is because their targets are easily identified, more easily reached and each potential client may represent many new cases as opposed to a single plaintiff or a few referrals from another firm that does not litigate the same types of cases as your firm. Many of their clients are insurance company claims executives and corporate counsel at large corporations. These clients read the same trade publications, are members of the same organizations and travel in the same circles.
While these guidelines may provide you with a great starting point, the fact is that you should work closely with a law firm marketing agency to assist you in determining what your marketing budget should be. There are reasons that may justify increased spending and there are reasons that might indicate the opposite.