Measuring What Matters In Your Law Firm Marketing Plan
Most lawyers hate math yet math is a critical part of any law firm marketing plan. There are three metrics in particular that are critical to the success of any law firm marketing plan.
These numbers help you not only in determining the success of your past marketing efforts, but they are also helpful in allocating funds for future marketing investment.
Below are the metrics, their historical value, and their value in your law firm marketing plan.
Client Lifetime Value
Client lifetime value is the profitability of your relationship with a client throughout the entire term of his work with you.
Measuring client lifetime value helps you understand the profit attributed to the average client relationship.
You can use client lifetime value to determine how much to invest in acquiring and deepening client relationships.
The best way to measure client lifetime value is to look at all your client relationships and determine how much money the client has invested in your firm, add up the amount of business the client has referred to you and divide that by the number of years you have had a relationship with that client.
Once you add up that number for all your clients and divide it by the total number of clients in your portfolio, you will have an average client lifetime value number for your law firm.
Client Acquisition Cost
Client acquisition cost is calculated by taking spending from a specific marketing campaign and dividing it by the number of clients that are sourced as a result.
For example: If you spend $1,000 on a direct mail campaign and you engage 10 new clients as a result, the client acquisition cost for that campaign is $100.
This is a valuable metric for measuring the success of individual marketing initiatives.
It is also valuable because it helps determine how you will allocate your marketing budget in the future.
Return on Investment
We use the return on investment calculation to determine the effectiveness of a marketing initiative.
Using the example above, if you invested that $1,000 in direct mail and the 10 clients you attracted provided you with $3,000 in new business, the return on investment from that campaign is 200%.
We use return on investment to determine the effectiveness of marketing initiatives.
These metrics are powerful when used as forecasting and decision-making tools. I’m guessing you currently do not track the data necessary to use these metrics in your law firm marketing plan. If this is the case, you can estimate them on a comparative basis and begin tracking them once you implement your law firm marketing plan.
Rest assured, these metrics will not just make you a better law firm manager and they will also make you more money.
Research Will Improve Your Legal Marketing
You must know who your client is and how he thinks. How does he make decisions? Who does he trust? How can you become his trusted advisor?
You must also be equally “in tune” with your referral sources. What do they want from you? How do they think when they refer you a case?
Understanding the way these people think is essential to great legal marketing.
How do you become familiar with the thinking of your clients and referral sources?
Do some research. Here are three ways to improve your knowledge of your target audience (clients and referral sources).
Ask Them Questions. This is the most obvious way to understand someone. Simply have a casual conversation with both clients and referral sources about how they make decisions, and about the things that are important to them.
Read The Things They Read. Identify a few specific niche markets that your clients belong to. Read the trade magazines for those industries. Trade magazines are excellent sources of information on people in specific industry groups. People are usually proud of achievements that are recognized in these trade publications. You can often interview the authors of articles and recipients of awards given by industry trade magazines. This will prove insightful.
Go Where They Go. Industry conventions and trade shows can also provide you with insight into the world of your clients’ lives and the lives of your referral sources. Once you have selected a market niche, look for trade shows and conventions that are popular among the members of these groups. Attend a few of them and mix with the people who are members.
Research is a great way to refine your legal marketing. The more tightly you target your potential clients and referral sources, the better you will be able to attract the right clients and referral sources.
Your Instant Law Firm Marketing Plan
Today I have something really special for you.
In this week’s Valtimax Podcast I outline the twelve most cost effective strategies for attracting and engaging new clients.
This is a law firm marketing plan delivered to you in a 42 minute podcast.
It’s everything you are looking for on a silver platter.
Don’t like law firm marketing? That’s fine.
Listen anyway and you’ll find some excellent relationship development strategies as well.
Here’s the link to the Valtimax Podcast that blows all the others away.
Listen and send me your feedback.
I bet you’ll love it.
You can put your law firm marketing plan together yourself or you can follow my lead.
Law Firm Marketing Predictions for 2012
This is a time of year when most people are preoccupied with New Year’s activities. Typically, readership of this website dips as many people are focused on other things.
Since it is just you and I paying attention, this is the perfect time for me to make some bold predictions for the next twelve months.
Prediction 1: Small and mid-size law firms will steal a record number of clients using value-based billing
On 2011 the most successful attorneys I know have literally stolen work from big firms because of the way they price their services.
Most clients view hourly billing as an immoral, unethical and inconvenient – if not a disgusting practice. If you offer a reasonable alternative to hourly billing, you will reap the rewards.
Prediction 2: Major search engines will change their algorithm significantly to force lawyers to abandon search engine optimization.
SEO has always been a black art practiced by college dropouts; nefarious outsourcing companies located a dozen time zones away, and a guy in his underwear at his kitchen table. 2012 will be the year Google finally slaps these folks silly.
Search engines can change their algorithm faster than anyone can adjust. Forget SEO and do some real marketing.
Prediction 3: Attorneys who focus on actual face-to-face networking will out earn attorneys who focus on social media.
This will be a bad year for socially awkward, homebound, agoraphobic lawyers.
Whether or not you realize it, you cannot Twitter and Facebook your way to a million dollar law practice.
Get off your ass and meet with people.
Prediction 4: A record number of recent law school grads will hang their own shingle.
This prediction was, by far, the easiest to make because it is already happening.
Big Law is not hiring. Kids in law school are sweating. There is no alternative. They are hanging their shingle and claiming to be fully minted lawyers. Scary but true.
Get ready for a low priced, newly licensed attorney to move in next door.
Prediction 5: Resentment, anger and frustration among Big Law Partners grows to an unprecedented level as they see the quality of life enjoyed by their solo counterparts.
Experienced attorneys (called Partner regardless of their equity stake in big law firms) will be overworked in 2012. This will occur because big law firms are not hiring inexperienced associates and because many “partners” do not know how to attract their own clients.
This overwork combined with the insatiable need to bill more hours will frustrate those “partners” who do not succumb to illness. This frustration will lead to great resentment for the solo practitioner who attracts clients on demand, offers alternative billing and sets his own hours.
Now you may not agree with any of these but it should be fun to see which of them actually come true.
The Economy Doesn’t Matter
I saw something the other day that is a great lesson on “How to make money in this economy”.
In a shopping center down the street from my home, there was a high end restaurant on one end. The place was given five star reviews by just about everyone. It had been around for 25 years. In the boom economy you could never get a table there. It was always packed and the prices were outrageous.
On the other end of the shopping center there was a Burger King. During the good times, the dollar menu was a favorite of the “mommy and me” crowd and the drive thru had a line of contractor’s trucks around the block. That place had also been there for over a decade.
Last week both places closed their doors for good. Bankrupt. Out of business.
Was it because of the economy?
Well, let’s see…in the same shopping center there is a casual Mexican joint that has a line out the door everyday for lunch. They open at 11AM and they close at 9PM. I drove by last week on three different nights and the parking lot was packed during dinnertime. It’s not fast food but it certainly is not gourmet.
Same shopping center. Same traffic. Same economy.
What is making the difference?
I can’t say for sure but here’s what I know:
I received a post card in the mail from the Mexican place when they first opened. It was a discount coupon and invitation to visit. When I went there for the first time they asked for my email address and every Monday I get their “special of the week”. They also gave me a “bring a friend for free” coupon during my first visit (so that I would return). And they asked me for my birth date (so they can invite me to celebrate it at their place with a free meal if I bring three or more people).
The gourmet place never sent me anything; never invited me to come over, and damn sure never cared about my birthday. And good old BK didn’t do anything locally to promote their business. They just relied on the scary bigheaded king character on television to drive traffic to them.
The key take away for you is this:
You have to take responsibility for your own success. Do not rely on the economy. Do not rely on the “brand” of your law firm. Do not rely on your reputation as an exceptional legal practitioner.
Make an effort to develop relationships with people who will become your clients and with the people who will refer clients to you. Invite them in. Get to know them. Show them you care.
You make your own economy. You can still do well. You just have to work a little harder and work a lot smarter than you did in the past.
Complaining about how tough things are will get you nowhere.
If you want to attract clients to your law firm you need to take action. If you are confused about what action to take, give me a call: 305.692.5531.
If Not Now…When?
“The timing is not right.”
This is one of the excuses I hear most often from lawyers. This excuse is used to justify a lack of action. Sometimes the lack of action is related to making a staffing change within their firm. Sometimes the lack of action is related to firing a problem client. Most often the lack of action is related to developing systems and processes related to client acquisition.
If you have ever felt this way, I have good news for you…
This is the perfect time to take control of your future.
The beginning of a new year is always a great opportunity to evaluate your progress and make some changes.
Take a few moments and write down your goals for your personal income for the next 12 months.
Next think about how many clients you will need to work with and how much (on average) they will need to pay you, to help achieve that goal.
Finally make a list of things you must do each day to find, engage and develop relationships with these clients.
If you do nothing else, for the rest of the year, review this information daily.
I have shared this exercise with hundreds of people over the years and the results have been nothing short of amazing. This works because, at a subconscious level, your mind begins to find ways to help you achieve your goals.
Over time you will find the things you do each day to bring you closer to your income goal will change. This happens because your subconscious mind guides you to test new client acquisition strategies over and over. You may not even realize you are doing it. That is the power of setting a goal and linking it to daily activity.
Of course there are other things you can do to help yourself. Things like following a system that has been successful for other lawyers. Things like modeling the behavior of some of the most successful people in your profession. Things like having someone hold you accountable for taking action.
All of those things (and a few others) would be helpful as you strive to grow your law firm.
But none of those things will make a difference if you do not take the first step.
That first step is to decide that the timing is right; actually the timing is perfect, for you to take action.
Do not wait another second. Take that first step right now and reply to this email with the three things you are going to do immediately to build the law firm you have always wanted.
The Basics of a Law Firm Marketing Plan
Who, what and how.
That’s what a good law firm marketing plan is all about. In its early stages, your marketing should answer three questions:
Who will you target?
What can you do for them?
How will they best receive your message?
These three questions become an actual marketing plan when you do the following:
Decide Who You Want to Target
Attorneys will often believe that EVERYONE in the community can be a client for their law firm. While this may be true – everyone could be a client – it is a terrible marketing strategy. Narrowing your ideal client down to a specific target market is the best way to be perceived as an expert. Focusing on a specific niche will help you effectively communicate on a direct and personal level with your target client.
Communicate Your Competitive Advantage
What makes you different? Why should someone choose to work with you? This is a critical question that you must answer with your law firm marketing Plan. If you look like everyone else and you say the same things everyone else is saying, you give people no other choice but to make a decision based upon price.
Deliver Your Message In the Most Effective Way Possible
Does your ideal client read the newspaper? Does he/she read trade magazines? Do they attend educational events? Are they computer savvy?
You must understand how your ideal client likes to disseminate information. Learn where they get their news. This will help you understand how to get your message through to them.
At the start, a law firm marketing plan consists of nothing more than addressing these three strategic elements. Getting them correct is critical. Think them through thoroughly.
What You Don’t Know About Marketing for Law Firms Can Kill You
This past week I met the leader of a law firm that is on life support. His firm is literally hanging on by the thinnest of threads. This guy is hoping that they will land a big client “within the next few weeks” to help him make payroll.
He called me to “pick my brain” on law firm marketing. He wanted me to show him the magic beans he could plant that would help him grow his revenue overnight. He asked about pay per click advertising, newspaper ads, handing out flyers at flea markets, etc.
Unfortunately for this guy (and the 40 employees of his law firm) it is too late.
He can do all that stuff and some stuff he didn’t mention but even if he gets 20 new clients he will be in the same predicament within the next six months. Why?
Because there is nothing that makes his law firm different from any other law firm in his area. Clients have no compelling reason to work with him. He is the same as everyone else. There is no law firm marketing trick that can fix that overnight. It takes time and it takes some careful planning.
The one question I ask every new client before I decide if I work with them is the question this guy can’t answer:
Why would someone choose your law firm over everyone else who does what you do?
Ultimately your clients decide if your answer is correct…and they vote with their wallets.
Florida Lawyers Need Marketing Consulting for Law Firms
Just about every day someone asks me why I focus specifically on Marketing for Law Firms. (They also ask if I only work on marketing for law firms in Florida. The answer to that is “NO” I work with attorneys all over the United States. ) Here are some numbers from the Avery Index that will help you understand why Florida lawyers need marketing help.
Florida has 11.7 lawyers per 10,000 residents. This means that for every lawyer there are about 855 people living in the state. About 70% of those lawyers are in private practice – which is to say they don’t work for the government, aren’t teaching full time and they are not in a corporate role as counsel. So there are about 1,300 people for every lawyer in private practice in Florida. (These are rough numbers but I am trying to illustrate a point).
Then you break that population of 1,300 potential clients down by specialty and you realize that not everyone needs a lawyer or can afford a lawyer. Real Estate Attorneys, Probate Attorneys and Divorce Attorneys for example may never be necessary for a significant portion of the population. Corporate attorneys are only necessary for business issues. Criminal Defense Attorneys only work with a small segment of the population.
If we assume that 50% of the population in Florida will need your services in any given year, the pool of eligible clients narrows to about 750 per lawyer. If we assume that only half of those people can afford you, the pool narrows to 375 people per lawyer. So in any given year, only 375 people will be ready, willing and able to hire each Florida attorney.
Finding those 375 people every year and convincing them to give you their matter and their money is the reason Florida lawyers need a marketing consultant for their law firms.
You Need a Law Firm Marketing Plan
Who needs a law firm marketing plan?
Actually, every law firm needs to have a marketing plan. This is especially true for sole practitioners or small law firms. Law firm marketing plans are important because they keep you focused on developing and deepening client relationships. This is something that often goes overlooked during the day-to-day practice of law.
Here are four reasons why a law firm marketing plan is important:
Having a law firm marketing plan forces you to think about attracting new clients. In most firms, marketing is not a discipline that is given a great deal of thought. Many times, attendance at networking events are the only marketing-related activities that take place. Developing an actual marketing plan forces you to think about who you want as a client and how you will attract them.
A law firm marketing plan will keep you on track. If you want to know how to get somewhere you need to follow a road map. A good law firm marketing plan will serve as a road map that will lead you toward achieving your business development goals. It will also bring you back on to the right path when you head down the wrong road.
Writing down your marketing plan will commit you to working on client acquisition. Everything we write down seems to magically happen. This is the power of a psychological commitment. Committing your law firm marketing plan to paper will help cement this commitment in your mind. Since action follows commitment, your plan stands a better chance of becoming reality if it is in writing.
A law firm marketing plan helps you keep a record of things that work…and things that don’t. Most of us operate under the trial and error philosophy. We try something and if it doesn’t work, we don’t do it again. This only makes sense if you give something a FAIR trial. Doing something half-hearted and claiming it didn’t work is not really giving it a fair shot. Creating a law firm marketing plan, executing it and comparing the results of your actions to the desired results (outlined in the plan) will be valuable in determining which marketing tactics you should implement in the future.
Every lawyer needs a law firm marketing plan regardless of the size of his/her firm. Sit down today and sketch out some ideas. If you dedicate 15 minutes each day to writing down your marketing ideas, within two weeks you will have the foundation of a solid law firm marketing plan.