How to optimise your Law Firm Marketing Budget in 2022

How do I set my law firm marketing budget?

The industry is changing. With the disruption of digital transformation and the decline of the traditional partnership model, firms are charting new waters. This makes it a struggle to optimise your marketing activity and marketing budget. We take a look at how law firms can get the most bang for their marketing bucks in 2022.

When we start looking at how to plan your law firm marketing budget, the first and most obvious question is how to set that budget. In this blog, we’ll consider this against industry averages before going on to explore how to ensure your firm gets the most return from its marketing spend.

How do I set my law firm marketing budget?

How do you allocate funds to your marketing activity? The most common way to plan a marketing budget is to look at it in the context of overall revenue.

Typically, businesses allocate between five percent and 14 percent of annual revenue to marketing – with business-to-business firms typically spending more. However, this metric has been under severe pressure in recent years. 

In its The State of Marketing Budgets 2021: Insights from Gartner’s Annual CMO Spend Survey, the consultancy firm Gartner says, “Despite an optimistic outlook from marketers in 2020, marketing budgets as a percentage of company revenue fell from 11% to 6.4%. This is the lowest proportion allocated to marketing in the history of Gartner’s Annual CMO Spend Survey.”

If your firm is allocating six percent of revenue, it’s a good bet that you are spending in line with the best brands in the sector. But how do you know whether you are spending that six percent of revenue in the right places?

How do I allocate my law firm marketing budget?

The mistake that many businesses make, especially smaller and mid-size firms, is to start planning marketing tactics before you have a clearly defined marketing plan. And the pre-requisite for a clearly defined marketing plan, is a concise but comprehensive marketing strategy.

There is no point trying to allocate marketing budget before you have defined your marketing strategy and marketing plan – you simply will not be able to make the informed decisions necessary to ensure your law firm marketing budget is being spent where it can deliver the best returns.

Begin with your law firm marketing strategy

Your marketing strategy is a high-level statement of intent that flows from your top-level business planning objectives. 

At a high level, your strategy needs to consider:

  • What is your purpose? Increasingly, purpose is about talent recruitment and retention as much as it is about a compelling customer proposition.
  • What are your core competencies? How does this translate into a clear product set? Does this product set deliver great value to your clients while delivering a healthy profit for your firm?
  • Who are your most profitable current customers? Who (and where) are your target customers?
  • Are you consistently delivering on your core offer? How does this compare to your competitors?

These answers should be articulated in detail in your law firm’s strategic marketing plan.

How should law firms approach the strategic marketing plan?

While every market sector has its own idiosyncrasies, a strategic marketing plan for a law firm should follow the same format as a strategic marketing plan for any other business.

For those who haven’t embarked on a strategic marketing plan before, let’s run through the essential elements of a strategic marketing plan.

  • Executive summary: clear and concise summary of your objectives.
  • Marketing goals: ensure they are aligned with your business goals – and make them specific, measurable, achievable, relevant and time-bound (SMART).
  • Market analysis: the political, economic, social, technological, legal and environmental factors that will impact on your firm over the next three to five years.
  • Definition of your target market: which customers are you targeting? Why? And where can they be found?
  • Competitor analysis: who are your major competitors in your defined target markets? How do their products, values, services, prices and customer satisfaction compare?
  • Marketing strategies: outline each of the marketing practices and channels through which you might wish to reach your target audiences.
  • Pricing and positioning: a definition of the offer you are making to your target market. Your brand strategy can be defined here.
  • Measurement: set out the budget and how you will measure performance about your stated marketing goals.

Only once you have defined your law firm marketing strategy like this, can you really begin to allocate your law firm marketing budget with any confidence.

How should law firms approach their tactical marketing plan?

The tactical marketing plan leads on from your strategic planning process. Here, you can lay out the detailed steps that you will action in order to achieve your strategic marketing goals. 

These steps will be guided by your strategic vision. For example, if you are targeting B2B clients, it is likely that your social media channel of choice will be LinkedIn. However, if you are targeting an older demographic of consumers, Facebook would be a more appropriate social channel on which to plan activity – and spend.

Your law firm marketing plan should cover at least a twelve-month period. It should outline each step in as much detail as possible and map out any dependencies between tasks. For this reason, it is often helpful to plot out your tactical marketing plan on a Gantt chart. Alongside each activity, you can allocate resources and – finally – budget.

In addition, for each task, you should assign goals and define how you will measure success in achieving those goals. This is vital if you are going to track the effectiveness of your marketing spend.

How do prioritise where to spend my law firm marketing budget?

The great truth about marketing budget planning is it gets easier. Each activity you undertake in your tactical marketing plan will deliver metrics about your return on your marketing investment. 

Thanks to the detailed strategic and tactical planning you have undertaken, over time you can build up a comprehensive understanding of how your law firm marketing budget best achieves your firm’s goals. You can understand exactly how much each new client costs you and the new business every marketing activity generates. 

This puts you in a much better position when it comes to the following year’s tactical marketing plan and the subsequent allocation of your law firm’s marketing budget.

How can we help?

Actionstep doesn’t stop at matter management – it’s a highly comprehensive software that can help you manage and coordinate just about anything, including your marketing campaigns and activities. Actionstep has powerful lead capture and marketing management features to help you grow your firm.

And, when it comes to planning your law firm marketing budget, Actionstep gives you the tools to easily define all your marketing campaigns and related activities and to set budgets, timeframes and expected results. You can create workflows, store file notes, emails and documents and link actual expenses to each activity.

We understand that, as a marketing decision maker in your firm, you want access to clear insights that help you prioritise your marketing activities and budget. Talk to our team today to discover how we can help you.