What’s a Realistic Marketing Budget for a Small Law Firm?

January 28, 2022

How to look at your previous revenue, determine your goals, and which percentages should be set aside for ongoing marketing efforts.

Small law firms and solo attorneys need to prioritize marketing if they are going to compete with the bigger law firms in the area. 


When your small law firm is ready to win online, but you aren’t sure where to get started with your marketing strategy, or even how much to allocate towards your marketing budget, you might find yourself stalled before you even have a chance to get started. 


Here’s how you can finalize your marketing budget and goals in 2022.

The Importance of Setting Your Marketing Budget

When starting to set your marketing budget for your small law firm or solo practice, you may be reaching out to various marketing agencies to determine what the standard rates might be. Many of these marketing agencies will offer services with flat fee rates. 


While this can help you plan ahead, if you do not know how you should be budgeting for your marketing strategy in the first place, you may not know whether the rate is fair or if you are being taken advantage of.


If you do not have a set budget in mind, you will not be able to measure the success of your marketing campaign. This could be devastating for your marketing strategy, especially if it does not deliver, and you are unable to tell where your marketing strategy went wrong.


What Do Most Small Law Firms Spend on Marketing?

So where should you start with your marketing budget? The majority of law firms spend anywhere between two and fifteen percent of their revenue on marketing. However, if you are a solo attorney or operate a small law firm, your marketing budget will likely be on the lower end of that scale. We recommend setting aside 6% of your gross annual gross revenue for marketing purposes, but if you’re in a high volume practice like DUI or PI, that goes up to 10-15%. This money should be spent on marketing, advertising, and business development. 


A good way to gauge how much you should be spending on your law firm's marketing is by taking a review of your revenue over the last three months. This will give you a baseline idea of how much money you’ve brought in and how much you can reasonably spend on your marketing budget.


Remember, having a smaller marketing budget won’t hurt you if you spend your marketing budget more wisely than a law firm that has a bigger marketing budget but is spending it poorly.


How Should You Allocate Your Law Firm Marketing Budget?

Once you have an idea of how much your law firm is going to be spending on your marketing budget, you will need to decide how to allocate these funds. The different types of marketing that you start with can determine where your budget should be allocated. 


For example, if you are a personal injury law firm, you can expect to spend nearly four times as much in search engine optimization and digital marketing as someone who practices criminal defense. The more competitive the practice area, the more expensive it will be to market in.


Do not forget to set a portion of your marketing budget aside for business development as a brand as well, as this can have an impact on your marketing budget as a whole if you need to re-brand.


Don’t Forget to Set Your Marketing Goals

When setting your budget, it is important to consider what your marketing goals are. Certain types of marketing are going to cost more. 


For example, if you are focusing on pay-per-click advertising, you can expect to spend more in marketing than someone who is spending time focusing on blogging, social media development, or personal outreach. Pay-per-click advertising is going to save you time in the long run, but may not be as effective as some marketing techniques.


Consider what marketing strategies have worked for your law firm in the past, so you can determine which marketing goals to make going forward. Remember, your marketing budget should always reflect your law firm's revenue and where you hope to be in the next year.


Although some of the largest law firms spend from two to four percent of their revenue on marketing, as a small or solo lawyer, you should keep in mind that the amount of money your law firm spends on marketing may be considerably more due to the competitive nature of the market.


As a whole, the legal industry spends far less than others on marketing. Many businesses find themselves spending ten percent or more of their revenue on marketing annually. Since the law firms are more likely to rely on referrals, It is often not necessary for law firms to increase their marketing budgets to that extent.

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