The Ultimate Guide to Figuring out a Legal Marketing Budget

Date: November 5, 2020


Marketing for attorneys is imperative to the success of a firm. From interstate billboards to the local TV spots parodied in Better Call Saul, law 

firm marketing is a billion-dollar industry—and now, more than ever before, firms are focusing their efforts on digital marketing.

No matter what marketing strategy a law firm chooses, the goal is the same: to increase profit margins by bringing in the type of clients that generate the most profit in the quantities that support the highest level of operational efficiency. In other words, get clients that contribute the most to your bottom line. 

This guide explains why investing in marketing is important for law firms, as well the four steps required to maximize return on a marketing investment. 

Why Marketing Matters 

In order to understand why law firms invest a significant amount of money into marketing, it is important to be familiar with the concept of return investment, or ROI. Return on investment is the measure of increased profits that result from a marketing campaign expressed as a percentage of marketing expenditure. In other words, ROI measures how many extra dollars a firm earns for every dollar it spends on marketing. 

Although it can be scary to hand a sizable chunk of operating funds to a marketing firm, the good news is that marketers never expect a firm to kiss those funds goodbye. Instead, marketing campaigns aim for (and measure) a return on investment, or ROI.

Calculating ROI

The basic formula for calculating ROI to divide the increase in a firm’s revenue as the result of a marketing campaign by the cost of the campaign. To make this a percentage figure, the result is multiplied by 100. 

In other words: (Sales Growth – Marketing Cost) / Marketing Cost = ROI

For example, let’s say a firm spends 5k annually on marketing and has a gross revenue of 300k annually. This firm decides to up their marketing budget to 15k, and, as result, they make 350k annually. 

Now for the math. Because this firm brought in an additional 50k in revenue but spent an extra 10k on marketing to earn that additional revenue, their net revenue increase is 40k. 

40k (net increase in revenue) divided by 10k (cost of new campaign) is 4. Multiplied by 100, that yields 400%, so this firm had a 400% ROI on their new marketing campaign.

As long as ROI expressed as a percentage is greater than zero, the money a firm spends on marketing isn’t going into the trash – it’s coming back by way of increased revenue. 

This, of course, assumes that 100% of revenue increase is attributable to a marketing campaign, which may or may not be the case. Some firms experience revenue growth quarterly without increasing marketing efforts. In this case, it is important to account for the percentage of an increase that is attributable to marketing spend. 

Marketing firms help with this more advanced calculation by using analytics that track a customer’s progress through the sales funnel (more on that later) and engagements with marketing materials. 

Finally, understanding the history of a firm’s performance trends can make this easier. If gross revenue jumps by 20% in the two quarters following the launch of a marketing campaign and no other explanation for the increase exists, a firm can safely assume that most (if not all) of the extra revenue is the result of the campaign. Although (we’ll say it one more time just in case), it’s always best to have plans in place to measurably track that return. 

This demonstrates why a firm might choose to invest a sizable sum in marketing: paying up front can lead to greater returns down the road.

Step 1: Determining a Budget

Once a firm has decided to invest in marketing, the next step is determining the appropriate marketing budget. 

Most lawyers and other industry professionals don’t have a background in marketing, so they usually decide to hire a marketing firm to handle their efforts. How much a firm should spend will vary depending on a number of factors, including:

  • Firm size
  • Practice area
  • Location
  • Client retention strategy
  • Business strategy and goals
  • Cost-benefit analysis

Understanding how each of these variables affects marketing spend is a critical step to setting a firm’s budget, so let’s break down how each of these factors affects what you should be spending.

Firm Size 

Firm size is one of the major factors that will determine the size of a marketing budget. This calculation includes the number of attorneys, number of clients, and gross revenue.

Bigger firms with more attorneys will invest more capital towards their marketing plan than solo practitioners will. For this reason, marketing budget is often expressed as a percentage of gross revenue, rather than as a fixed dollar amount.

Experts recommend that businesses spend anywhere between 2% and 12% of their gross revenue on marketing efforts. According to a 2018 Legal Marketing Association and Bloomberg Law joint study, the average law firm spends 6.7% of gross revenue on marketing. That means for every million dollars a firm brings in, an average of sixty-seven thousand dollars is redirected towards marketing efforts. 

This number can also be adjusted to suit a firm’s needs, and higher numbers might not always correspond to larger firms: although a large firm with sizable profit margins may have more budget flexibility, a brand new firm might be in greater need of marketing services because building a client base is a high priority. 

Practice Area

The percentage of revenue a firm devotes to its marketing budgets also differs by practice area. Litigation and personal injury attorneys often require significantly more capital to be set aside for marketing, as lead generation and brand awareness are critical for practice areas that require new clients on a regular basis. This principle extends to some degree to any kind of business to consumer (or B2C) practice. 

On the other hand, for firms whose clients are businesses, government agencies, or other larger bodies typically spend less on marketing than B2C firms do. There are several reasons for this.

Because their audience is smaller (there are fewer businesses than civilians in a given market, and even fewer government agencies), marketing strategies can more precisely target the exact clients these firms need to reach. Instead of a costly campaign intended to reach thousands of individuals, marketing efforts can leverage conferences, trade shows, and business publications to reach only those clients who can be best served by the firm. 

These firms may also be able to rely more on word of mouth, and because a client can stay with a firm for years (or even decades), generating new leads may be less important than ensuring loyalty. All of this can add up to a smaller budget being required to meet these firms’ marketing needs.

Local Markets

A firm’s location can also influence its marketing budget. A densely populated city may be a competitive market for law firms, and an increased marketing budget may be necessary to break through the competition. 

On the other hand, rural practices also face challenges. Although the competition from other firms may be less intense, a firm’s clients may be spread out across a larger geographical area. This means that the marketing efforts that target those clients need to expand. 

Client Retention

Determining the average length of time a client remains with a firm is another important factor in finalizing a marketing budget. The longer a firm retains a client, the greater the ROI on the initial marketing spend: for each new client brought in, a firm can expect years of increased revenue. It may make sense for this type of firm to spend more and accept a lower initial ROI with the understanding that benefits will continue to accrue over the long term. 

For firms who typically see high turnover in clients, the increase in revenue per new client will be smaller. That said, if a firm’s operating model is to bring in a high number of new clients each month, investing in marketing can be necessary to reach that goal. This type of firm should not necessarily spend a smaller portion of its budget on marketing. Rather, it should pursue a significant ROI on an annual (or even quarterly) basis, with the understanding that marketing spending will need to remain at a consistent level over time. 

Business Strategy and Goals

Budget decisions should be goal-informed, and a firm’s goals will differ depending on its strategic plan and current situation: in other words, marketing priorities are determined by how a firm generates revenue and how much progress needs to be made for the firm to reach its revenue goals.

For example, if a firm’s needs require it to double the number of clients it currently serves, it will need to allocate a greater percentage of its operating budget to marketing than if its goal is to increase the number of served clients by 10%. 

Before setting a marketing budget, it is important to sit down and come up with a list of desired outcomes. In addition to increasing the number of clients, these goals could include attracting a different type of client (i.e. a more lucrative one), or breaking into a different geographic or practice area. 

Cost-Benefit Analysis 

Marketing is a sound and necessary investment, but no investment is completely without risk. There’s always the possibility of an unforeseen event resulting in a lower ROI than expected. 

This means that firms should also take into account their risk tolerance and ability to recover from unforeseen circumstances when setting a budget.

This risk and reward calculation is easily understood in terms of ROI. 

For example, if a law firm develops a campaign with a target ROI of 5%, it might be unwise for that firm to invest a considerable portion of its operating budget into the project. There’s always the possibility of an unforeseen event lowering that percentage, and because the margin for a positive ROI is fairly small, the risk of investing a large sum may outweigh the potential rewards. This firm might want to start with a smaller portion of its operating budget allocated towards marketing and plan to scale up over time. 

On the other hand, if market research and comparables suggest that a firm can expect an ROI of 500% (which could be the case for a firm that is just starting out or has very little name recognition), investing a larger portion of its operating budget might be wise. 

A firm’s immediate needs will also determine this calculation. Firms that are functioning well and seeing considerable profit margins have the liberty to either invest a considerable sum in marketing or to start smaller and scale up over time. A firm that is struggling and in desperate need of more clients, however, may not have the luxury of choice. Seeking a plan that targets a high ROI and putting a substantial percentage of operating budget into that plan may be the best way for this type of firm to get its earnings back on track. 

Adding it Up

Marketing teams and firms bring a significant amount of expertise to the table. A trusted marketing partner can help a law firm weigh these factors and decide where in the 2-12% range of gross revenue a firm should be. 

Remember that every law firm is different, so what worked for one may not necessarily work for another. Marketing efforts also need to be constantly tweaked, which can include budget adjustments. 

Part 2: Maximizing Budget

Once a firm has determined its gross revenue, the next step is to maximize that budget by understanding how marketing efforts generate sales. 

Breaking this process down into a functional, reasonable, and success-driven marketing blueprint is all about understanding the sales funnel.

Sales Funnel for Legal Marketing

The sales funnel model represents the path a client takes from learning about a firm’s services to signing a contract. The model helps marketers identify the types of information and interaction that facilitate this process. Ideally, messaging should become more targeted as a client moves further into the sale funnel and closer to the point of committing (i.e., scheduling a consult or retaining your firm).

Lead Generation

The “top” of the sales funnel is about lead generation and awareness. This is all about catching a potential client’s attention. At this stage, a client is discovering a firm’s services. Content at the top of the funnel includes:

  • Websites
  • Paid ads
  • Social media platforms
  • Podcasts
  • Video series
  • Infographics

This content is something that anyone could easily come across in their searches. The intent is to reach a broad audience.

Lead Nurturing

The middle of the funnel is about nurturing leads that were established at the top of the funnel. The goal is to make sure that clients who found out about a firm are intrigued enough to continue engaging with the firm. This is accomplished by making sure that the middle of the funnel provides additional value to the client. 

Leader nurturing for law firms can employ options such as:

  • Premium blog posts
  • White papers
  • Case studies
  • Comparisons


The bottom of the funnel is about getting a client to choose a specific firm. This stage is about cementing relationships.

The bottom of the funnel should contain more direct and targeted communications. Some options for law firms once a potential client has reached the bottom of the funnel:

  • Email marketing
  • Client lunches
  • Free consultations
  • In-person events 

Budget Breakdown

The sales funnel model also allows firms to visualize marketing priorities and adapt accordingly. 

Top of funnel activities are a requirement—these help clients become aware of a firm’s services. A firm might begin by devoting 50% of its marketing budget to top-of-funnel activities like website, paid ads, social media, and blogging. 

The rest of the budget should then be devoted to eliminating any “leaks” in the sales funnel, or places where a potential client stops interacting with a firm. A firm might dedicate 30% of a marketing budget to lead nurturing through whitepapers, case studies, and live chat, and the final 20% to conversions, which might include free consultations and taking prospective clients out for lunch.

Of course, the initial budget breakdown is only the first step. Firms can then use analytics to assess site traffic, click rates, and performance, and this data can provide insight into how a sales funnel is operating. Budget percentages should then be adjusted accordingly. 

For example, if a firm’s website isn’t getting any traffic, that firm can devote an extra 10% of its marketing budget to top-of-funnel activities. Conversely, if a website is getting tons of traffic but the firm isn’t signing any new clients, then a greater percentage of budget needs to be allocated to the lower portions of the sales funnel.

Part 3: Measure and Analyze

Once a firm has determined its marketing budget and established a preliminary breakdown of budget priorities, it’s time to begin evaluating progress. This is accomplished by tracking specific key performance indicators (or KPIs), and analyzing the data to look for insights. 

Important KPIs

Just implementing a marketing campaign is not enough to guarantee success. Instead, firms need to get in the habit of regularly evaluating and analyzing the results to see what’s working and what isn’t.  

In addition to ROI, firms should track sales revenue, cost per lead, traffic-to-lead ratio, lead-to-customer ratio, landing page conversion rates, and website traffic by source (including paid ads, organic, and social media linked traffic).

This can be made much easier with the implementation of a Customer Relationship Management (or CRM) system. Most CRMs have the ability to produce analyzed reports on all of the impressions a firm has made. How many people read the posts, and what percentage of people did what the post prompted? This type of data reveals which strategies are currently working well, as well as the areas that require attention.

While analyzing results is simplified by the use of a CRM, analysis is still possible without this system. It may take longer to gather, record, and present the data, but it will still yield the same pertinent information.

Conducting regular analyses of marketing efforts can help law firms stay ahead of the curve and run at top efficiency.

Part 4: Refine and Adjust

Once a marketing plan is underway and regular reports are providing insight into performance, marketing is all about refining strategies until the desired results are produced. This draws on the creative problem-solving and persuasion skills for which both marketers and attorneys are known. 

The first step is analyzing KPIs. Let’s say that for Westers & Plank (an imaginary firm), 80% of website traffic comes from social media links, while only 15% comes from paid ads. This firm’s next step is to look at what it is spending on social media, paid ads, and other top-of-funnel strategies that are intended to drive traffic to the site. 

If Westers & Plank is meeting its goals for site traffic volume, whether or not the above breakdown is a problem depends on two things: if these numbers suggest that top-of-funnel marketing budget is being used efficiently, and if meeting site traffic goals is also translating into meeting conversion goals. 

Let’s say that Wester & Plank is spending 50% of its top-of-funnel marketing budgets on paid ads and another 50% of its budget on social media. Is that money being spent efficiently? Perhaps not. Given that this firm is generating over five times more traffic with social media than with ads, these ad dollars may be put to better use on social media platforms. 

Of course, this also depends on the type of traffic that is being generated by these different channels and whether or not that traffic is translating into increased conversions for the firm. Let’s say, for example, that a savvy social media marketer makes a firm go viral by inventing “the law firm peanut butter challenge” (or something of the sort). This firm’s site traffic will skyrocket. While brand awareness has intrinsic value (after all, just because a campaign doesn’t lead to an immediate conversion doesn’t mean that it might not do so down the road), a lot of this traffic is likely to be generated by people whose geography or expected needs don’t make them good candidates for conversion. 

This means that Westers & Plank also has to evaluate whether its site traffic is leading to conversions. Ideally, this will include analyzing which of these channels brought the clients that end up in the middle or bottom of the sales funnel into the top of the sales funnel. In other words, it will reveal how clients who end up scheduling a consultation or retaining a firm initially learned of that firm’s services. 

If Westers & Plank discovers that although 80% of its site traffic comes from social media, 75% of its retained clients discovered the firm through paid advertising, their answer is not to equalize spending between paid advertising and social media. Instead, this firm should devote a greater percentage of its top-of-funnel budget to paid advertising because this channel is leading most directly to increased revenue.

While working with a CRM can yield valuable insights that firms can use to continuously adjust strategy, it is also important to remember that no reporting system will ever be able to render an entirely comprehensive picture of a client’s path to conversion. Humans are complex, and decision-making is often more nuanced than can be meaningfully measured on the scale that a business operation requires. This means that while data can and should help guide strategy, it is also important to not entirely cut out pieces of a marketing campaign that aren’t obvious traffic drivers. There’s something to be said for continuing to build trust with an audience, even if these efforts don’t turn up in the data as having generated clients. 

This is why the “law firm peanut butter challenge” is not entirely without value. As long as this content is on-brand for the firm in question (i.e., it promotes their professional values), the resulting name-recognition matters, even if it doesn’t demonstrably result in more short-term leads. Consider this scenario: the peanut butter law firm becomes a household name with eleven to sixteen year-old children in the US because of a viral TikTok video. This firm practices divorce law, so when fourteen-year-old Deb learns that her aunt is getting a divorce, she mentions that the firm in question is “really cool.” Deb’s aunt laughs this comment off, but later, when the firm’s name shows up as the fourth result in her search query, it’s her first click: she recognizes the name, and her niece’s comment has resulted in her feeling positively towards the firm. Deb’s aunt might never indicate that the peanut butter video brought her to the firm (instead, she’d likely credit the paid ad), but this awareness-raising campaign was critical to her conversion.

There are an infinite amount of ways to adjust a marketing strategy, and thinking outside the box is recommended. Here are some of the advanced online marketing strategies a law firm can implement to yield greater success.

Compare to Competition

Firms should regularly look at their competitor’s websites to be sure that their own sites both stand out from and eclipse their peer institutions’ efforts. If a firm discovers that a competitor’s website ranks more highly in search results or is considerably more informative or user-friendly than their own, this is a clear indication that this firm should devote budget dollars to improving its online presence. This is especially trust if evidence suggests that leads are being lost to this competitor. 

It is also important that this research be conducted while keeping the client’s perspective in mind. In fact, one thing that a marketing partner can bring to a legal team is a relatively limited expertise in the law.

Consider this monstrosity of a sentence: 

Any person who has cohabited with another to whom the person is not legally married in the good faith belief that the person was married to the other is a putative spouse until knowledge of the fact that the person is not legally married terminates the status and prevents acquisition of further rights.

While a long-practicing divorce attorney might remain unfazed by this passage, this kind of language is nearly impenetrable for lay people. The subject alone is 28 words! Somebody from outside the legal field can quickly pick up on any terms or constructions that, while they might be familiar for an attorney or paralegal, can be confusing for non-legal professionals. 

Assaulting a potential client with overly complex language is a great way to send them fleeing right out of the sales funnel. Adopting a potential client’s point of view can help a firm notice elements that can be adjusted or implemented to yield greater success and higher conversions. 

SEO Optimization

Firms should make sure that all advertisements and calls to action are optimized for search intent. A practical way to do this is through a Search Engine Optimization (SEO) tool like or Both sites let marketers analyze search queries to see what are the most trafficked terms and what questions are commonly being searched. 

Having this knowledge can put a firm a step ahead of the competition by allowing it to rework its site’s service pages or blog posts to directly answer the commonly searched queries. This will ensure high traffic coming to the page and, in time, secure a higher ranking on the search engine results page (SERP). 

SEO optimization is a complex and long-term strategy, and popular search engines regularly adjust the algorithms by which they sort and rank online content. This means that SEO is not about completing a one-time overhaul of existing content—it’s about developing an ongoing plan to monitor rankings and adjust strategy accordingly. In addition to SEO tools, many firms employ specialized SEO agencies to help with this. These firms provide the advanced guidance, structure, and ongoing creation and maintenance of content required to help firms rank in a competitive market. 

Leverage the CTA

A call to action (or CTA) is any element or device that prompts a user to take immediate action. Within the legal sphere, this will primarily consist of encouraging people to call a law office or fill out and submit contact forms. 

Sample CTAs include

  • Schedule your free consultation now!
  • Subscribe to our newsletter to learn more about business services. 
  • Got legal questions? Chat with our assistant here!
  • To learn how we can help, call now! 

These CTAs should also include a link or a button: the whole point is to prompt somebody to take an immediate action that leads them further into the sales funnel, so offering a way to take that step along with the instruction to do so is critical.

At the end of the day, all marketing efforts have the same goal: to increase lead generation with the hopes of increasing the number of clients. CTAs are the most reliable (and easily trackable) way to do so. A firm should make sure that all service pages and blogs have smartly worded, effective, and clickable CTAs that can drive traffic and increase conversion rates. 

If a firm is experiencing an influx of phone calls after the implementation of these CTAs, it may consider purchasing a service that records all query calls. This is a successful way to make sure that no information is ever lost, even if no one writes it down, and it also acts as insurance so no client ever falls through the cracks. 

Go Multimedia

Firms may want to consider incorporating videos onto their site’s pages. Video makes a site friendly to “visual learners” as well as those who prefer to read. A good rule of thumb is to offer multiple methods of engagement to account for different content consumption preferences: blog posts for readers, videos for podcasts for those who would rather listen, and infographics and charts for the visually inclined. 

Videos can be shot directly in a firm’s office. The cameras on cell phones are getting more advanced each year and can be used to record a video for a professional site. Similarly, a computer’s webcam can also get the job done quite well.

Again, search intent is paramount, so make sure that all non-text items are searchable. This can be accomplished by using titles, alt tags, and meta descriptions that repeat the keywords used in the content. After all, search-engine bots can’t crawl through and rank sites based on video content (at least yet).

Make sure that all videos are relevant and contain useful information that potential clients will find useful. If they’ve already watched a firm’s videos, that firm will be top of mind when they’re looking for legal advice down the road.

Talk with Current Clients

Another great way for firms to find out which ad campaigns are most beneficial is to discuss with current clients. This conversation can be tailored to discover which campaign brought a client to that firm—CTA on a service page, a blog post, or the fact that the firm’s site was the first search result in the SERP. 

All of this information helps a firm determine which elements of a marketing campaign are working and, conversely, which are not proving as effective and have room for improvement. 

From there, firms can focus on some of the less effective methods, tweaking them until they start bringing in the desired results.

Don’t Forget Face-to-Face

While a marketing team’s work is certainly important, this is not the sole method of lead generation any practice should be implementing. 

Law firms should never underestimate the importance of face to face meetings or marketing events. Whether it’s networking events, speaking engagements, community events, bar association occasions, or engaging at local schools and universities, any and all of these events can do wonders for lead generation. 

Even when a firm has reworked and optimized its firm’s marketing strategy, representatives should still make sure to attend as many events as possible—every new person is a potential client or referral source (which are just as important as leads). 

Investing in Reputation

The legal field spends a significant sum on marketing efforts every year. Large firms can bring in hundreds millions of dollars annually, and some even bring in billions. This means that many firms are spending hundreds of thousands to millions of dollars per year on marketing.

With marketing taking up a significant percentage of a firm’s operating budget, it is important for attorneys and practice managers to understand the basics of determining a marketing budget, allocating that budget across priorities, and making adjustments based on an analysis of KPIs.

It’s also worth remembering that while increased revenue is the goal, marketing isn’t only about ads, and marketing efforts don’t only exist to attract new clients. Broadly defined, marketing is responsible for preserving and elevating a firm’s reputation—both with the general public and within its professional community. 

After all, a firm’s successes can only become part of its reputation if they are publicly known—and they will only be remembered if that firm’s brand effectively captures and promotes the qualities that enabled that success. A solid marketing strategy can turn a brand into reputation—and, over time, a reputation into a legacy. 

Take the Next Step

Need help setting your legal marketing budget? Reach out to 9Sail today for a conversation.