One of the most frequently asked questions partners ask themselves when they decide to grow is: How much should a law firm invest in marketing?

How much should a law firm invest in marketing?

The answer, as so often, is: "it depends".

The legal profession is a very heterogeneous industry, to which no general rules can be applied without being superficial.

Within the same firm, there are often more conservative partners, who do not "believe" in marketing and therefore block investment decisions, and some more enthusiastic ones, willing to support their objectives of generating higher turnover and profitability with this discipline, which is basic in other sectors.

Marketing is a tool, like a hammer. Nobody tells you they don't believe in the hammer. It is a tool and, as such, with the hammer you can build a cathedral or smash your finger. It depends on how you use it. Likewise with marketing.

Budget setting often leads to arguments, tensions and unpleasantness among partners, as well as pressure on marketing managers to find out how much the competition is spending. For benchmarking purposes, research findings from the Legal Marketing Association indicate that firms in the US spend between 2-10% of turnover on outside vendor services, in addition to team remuneration and lawyer time. You can read about it in this post on the Communication and Marketing blog of the General Council of Spanish Lawyers.

Now, to find out how much your firm's budget should be, we offer you the six key factors that influence what a law firm should invest to try to make itself a more attractive option for potential clients:

1. The extent of the law firm's ambition and goals

A firm determined to grow quickly knows that it must invest, both to attract clients and big-ticket matters, as well as the best lawyers.

Inorganic growth also requires a strong brand, as it is not just the chequebook that counts when it comes to attracting fellow travellers, especially if you are looking for prestigious lawyers.

Marketing plans are simply ideas on paper if they are not backed up with resources. If a small firm intends to grow, it is logical that it should devote a significant part of its annual budget to generating awareness, prestige and contacts, reflecting its expectations.

2. Type of services offered by the firm

The type of law practice you engage in will definitely influence the need for investment.

Firms that provide recurring legal services (often on a retainer basis) tend to focus on retaining existing clients rather than attracting new ones.

On the other hand, if the firm is involved in transactions or litigation, it must be more active in order to be top of mind when the opportunity for collaboration arises. This means that it will have to make a greater effort to keep its professional reputation and trusting relationships with potential buyers and their prescribers alive.

The brand, both the firm's and the lawyer's personal brand as a recognised expert, for matters where the client's company is at stake, is a guarantee for the risk-averse buyer. The saying "Nobody ever got fired for choosing IBM" applies here.

3. Specialty: B2C or B2B

Individual firms invest heavily in mass advertising, as their target clientele does not allow for precise segmentation, e.g. car accident or consumer fraud law firms.

In contrast, corporate lawyers specialising in certain sectors or types of companies can use content-driven attraction marketing and thereby maintain awareness over long sales cycles, where the lawyer's personal intervention as an expert and the generation and growth of trusting relationships with key people are essential. They require less advertising, but more lawyer time.

4. Size of the firm

Size, of course, matters. Smaller firms need to invest proportionally more than larger firms because there are core activities, such as updating the website, blog and social media, that require a minimum spending threshold to reach sufficient critical mass to be well perceived in the marketplace.

5. Starting level of recognition and positioning

Firms that already have commercial prestige should invest less in promotion. Although maintaining positioning is not easy, brand building requires more investment than brand maintenance, especially in a market where referrals from satisfied customers remain the main means of attracting them.

6. Lawyers with a personal brand

The firm that has lawyers with personal brand and relational capital, who are also committed to the firm, can afford to invest less than firms that do not.

Partners who are first names in the market have a very positive direct impact on a firm's relevance. The personal brands of top lawyers build the firm's brand, more often than the other way around. Having recognised experts who contribute their opinion is one of the main claims for the firm's visibility.

Likewise, the most important marketing asset for firms is their own lawyers promoting the firm on social media. This powerful activity is called employee advocacy (in our industry, associates advocacy) and depends on pride of ownership, commitment to the firm's future and confidence in the firm among its members. Like almost everything that matters, it is so valuable that it cannot be bought with money.

These six factors - objectives, type of services, specialism, size, current recognition and the contribution of its lawyers' brands - define the level of investment a firm must make in order not to frustrate its aspirations.

What other factors do you consider relevant?

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This article was originally published in Miranda 360 and written by Lidia Zommer.