We are in an age of accountability, and marketing departments have to prove their worth.
One of the most important questions in the marketing field, and in legal marketing specifically, is how to calculate the return on investment (ROI) of the dollars spent on marketing. In the law firm world, this question has become much more crucial than it was a few years ago. As law firms’ marketing budgets become tighter, lawyers are becoming increasingly more interested in knowing how their marketing dollars are being spent, and to what end.
We know that people do business with people they know and trust, and have seen – that’s where we step in. Marketing can make a lot happen, but there are caveats. We can’t control the product, the pricing, attorney follow-ups, sales skills, presentation skills, or people skills.
A good deal has been written on the ROI of legal marketing. The basic principles that I see as most crucial are the following:
1. Many of the measures of ROI are imperfect at best. Although it’s easy to say with certainty how much a law firm spent on, say, a CLE seminar on tax issues involving trusts and estates, and it’s easy to know how many current and prospective clients attended the seminar, it’s quite difficult to ascertain what new client matters may have resulted from the seminar and thus how much revenue was generated. There are many reasons why a new client might come to a firm or why an existing client might choose to give the firm new legal work.
2. Return on investment must be calculated over the long term. A period as long as two to three years is generally needed to realize the benefits from a media campaign, a social media program involving brand exposure, or a blog. Quite often, an attorney will look for a major influx of client work after three to six months. It doesn’t happen that way. The firm’s leaders need to have intestinal fortitude and need to persist with their plan.
3. Even though ROI is hard to measure, a firm that makes serious attempts to measure ROI is doing much better than a firm that doesn’t even try. Although it may not be easy to directly track revenue from a seminar or an advertising campaign, there are ways of approximating the value of the marketing expenditure. The firm could measure the number of billable hours worked by its trusts and estates department in the six months before the seminar and in the six months afterward. An increase would give at least an indication that the seminar was worthwhile.
4. All the good marketing plans a law firm can make through seminars, media campaigns and the like are probably going to be useless for ROI purposes unless the attorneys know how to follow up and deliver their message. A good marketing team can increase brand recognition, can help foster trust and a sense of stability, and can encourage lawyers to do their part. But the lawyers need to close the deal.
5. It’s always better to plan a marketing campaign ahead of time with thoughtfulness and intent, and it’s likewise better to plan the use of an ROI measure ahead of time. If the firm chooses to pay for search terms via Google, for example, that marketing expenditure should be coupled with a planned and appropriate ROI metric, such as the firm’s cost per impression, cost per click, or average position in response to a Google search.