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Marketing Roi Benchmarks For The Legal Industry
Posted By: durdog* on 7/15/2004 10:01 PM (CST) 125 Points
I’m trying to find out what would be considered a desirable Marketing ROI for the legal industry. Specifically I'm working with online marketing, but that is not overly relevant. I just want to know what would be considered average as well as desirable marketing ROI.

Much appreciated!!
FB

Posted by: SteveByrneBranding Accepted Answer
7/16/2004 2:30 PM (CST)
The legal industry, as with all professional services industries, has been struggling with this one for some time, particularity over the past 10 years. All professional service providers share a common problem in that the selection process for firms is often a complicated one and much of the information crucial to decision making is very difficult to discover. It’s a little easier to measure the number of leads attained or leads-to-meetings conversion numbers, but true ROI is a problem.

At some point the practioners become involved in the sales process and things like chemistry and professional tone become factors in making the sale. Also, “the sale” can be a single project legal matter or a life time of client legal matters. How do you measure ROI for thirty years of business from a single insurance client? Ongoing client service and client entertainment are to be included in the cost of keeping a client and are therefore part of the ROI numbers.

Still as marketers we have to try and progress can be made. Try these links for more info:

Legal Marketing Association and
http://www.legalmarketing.org/
Association of Legal Administrators
http://www.alanet.org/home.html

hope this helps,

- Steve
 
Posted by: SteveByrneBranding Accepted Answer
7/16/2004 5:38 PM (CST)
The Numbers ...

Regarding a number answer to your question, over all professional service firms will spend the same 5% (plus or minus) of gross sales on marketing. So if your firm is billing $50 million annually, a marketing budget might be $2.5 million. That seems high, but it depends on what you’re including – lawyer and paralegal @ average billing rates, entertainment (very big number with most firms) staff and any full time marketing people salary plus direct marketing costs. The point is it all adds up. So, what’s your ROI for $2.5 million? There are various viewpoints, I think at least three times (or $7.5 million in new business billings) on the investment is a reasonable number keeping in mind that the firm could grow much faster than that based on the economy or other factors beyond the marketing effort.

just my experience.

- Steve
 
Posted by: bobhogg Accepted Answer
7/27/2004 8:22 AM (CST)
It's a good question, and one that should be being asked no matter what industry you're in.

However, I have a feeling that we would all be hard-pushed to actually come up with a definitive figure on what an average ROI on marketing is within our respective industries.

Anybody disagree?!
 
Posted by: ASVP/ChrisB Accepted Answer
8/7/2004 1:57 AM (CST)
Bob makes a cogent point. The key, however, is not what the average ROI is (who wants to be average?) but what hurdle rate of return the shareholders place on such expenditure.

In a legal partnership, as in other professional services firms, I can imagine there would be many fine minds turned towards arguing the relative merits of any particular expenditure, all mindful of protecting their own areas...

The important thing is to get the parameters agreed up-front. No marketing manager wants to discover they are being measured on a basis they were not expecting.

Marketing is a lot like the law. You can never be sure, no matter how well you argue your case or sell your pitch - whether the jury will come down on your side, or the side of the competition. And FWIWIMO no marketer should be judged based on the ROI of a single campaign, marketing is about longer term, more strategic isues which develop fully over time.

I would suggest using strategy mapping and balanced scorecard to determine the effectiveness of the firm's marketing strategy over the firm's strategic timeframe. That would allow subjective and other objective measures (e.g. brand awareness, recall, propensity to call, other survey results) as well as financial measures to be included an assessment. Feel free to contact me if you need more details.

Hope this helps.

ChrisB
 
Posted by: jose04 Accepted Answer
8/7/2004 11:35 AM (CST)
Durdog

Nixon Peabody’s practice area itself comes to about 365 services. This sort of range build up gives confidence to the client and therefore they will decide positively on patronizing the firm. Check http://www.nixonpeabody.com for interesting ideas related to a leading law firm.

I strongly think that the issue of ROI is a by product of the perfectly streamlined, smoothly running business, which is focused towards achieving its mission statement. ROI is just a working standard, set as an expression of efficiency for a firm. In the long run ROI will be significant and improve, as organisational missions get achieved.

The mission statement of any legal firm must draw inspiration from the generic purpose of the existence of law, and that is to deliver justice. If the firm can achieve it speedily, cost effectively, then it should be the product of the holistic efficiency of the law firm. Issues like the competency of the lawyer, the research base and set up, quality checks on the correctness and comprehensiveness of the case preparations undertaken, the trust and relationship built with the client etc, also mean specific cost implications. Any efforts which has monetary implications to achieve this desirable process of promoting justice is the investment necessary for the legal industry. Such investments apart from acquiring legal databases, technology, office backup, communication facilities, training for attorneys etc have marketing overtones. Maintaining a database of such money spent on marketing cost heads, time taken for justice to be achieved for the client, etc should be analysed to arrive at an ROI value. This should shift from firm to firm. I’m sure that the links suggested by Steve above, should give more inputs on this.

Hope these thoughts help.

Regards
 
Posted by: Val (Moderator)* Moderator Response
8/8/2004 11:50 AM (CST)
Hello all. I am closing this question, since its more than 2 weeks old. We do this to make sure members' contributions are rewarded in a timely manner and to improve the visibility of newer questions. Thanks, so much, for participating!

Val (Moderator)
 


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