The better you know your numbers, the better and more effectively you can manage your law firm. In particular, the better that you know your marketing numbers, the easier it becomes to find new clients and grow your firm. It is always important to remember that, as attorneys, we are in the business of providing legal services rather than merely practicing law. This means your law firm is a business that must be treated as such, and it must be managed through the tracking and managing of key metrics. One of the most important metrics to leverage when growing a law firm is the use of a marketing budget. A marketing budget will ensure you stay on track financially with your marketing initiatives. It also will prevent you from throwing hard-earned money down the drain with your marketing spend.
Building, Monitoring, and Adjusting Your Budget
Many attorneys are uneasy with financials. The topic can be intimidating. After all, this is not a topic generally covered in law school. We have law degrees, not MBAs. But a marketing budget is quite easy to set up, and you don’t need any type of accounting proficiency to do it. A basic spreadsheet is all you need to get started. You can also delegate this task to someone else to complete and manage for you. The key is just to get a marketing budget created as soon as possible if you don’t already have one.
This budget should accurately and comprehensively reflect the amount of money you allocate to marketing your law firm. At my firm, because we are in hyper-aggressive growth mode, we spend 25 percent of gross revenue on paid marketing. Our marketing budget allows us to visualize and make sense of our marketing spend. It comprehensively covers and breaks down every aspect of our marketing, such as Google Ads, TV, mailed newsletters, and all other marketing efforts we pursue, so that we have eyes on all our channels and what we are spending on each of them. If we find a particular initiative is working well, we will add more money to it. Conversely, if a marketing channel is not working well, then we will pull money away from it or stop it altogether. The budget can and should always be adjusted as circumstances dictate.
Instead of randomly spending money on marketing (which many attorneys do) and hoping it brings back a return on your investment, creating and monitoring a marketing budget allows you to be very intentional and disciplined with your marketing spend. This will result in much less wasted money and much better and more effective use of your marketing dollars. You want to fully maximize your marketing dollars, and that is what a marketing budget can help with. Plus, the budget will ensure your marketing investments are diversified. You never want to be stretched too thin in any one marketing channel. If, for example, you are highly overleveraged in search engine optimization (SEO) spend, and Google suddenly and radically adjusts its algorithm (this will happen), you are in trouble if all your marketing spend is tied up there. A budget allows you to make sure you have a diverse set of marketing dollars spread across multiple channels, which gives you better and more predictable results.