Determining the right marketing budget for a law firm depends on several factors including firm size, growth goals, and practice area. Here’s a breakdown of what you should consider when allocating your marketing budget:
Small Law Firms
Medium Law Firms
Large Law Firms
Marketing budget by firm size
Small Firms: According to the U.S. Small Business Administration, small firms should allocate 7–8% of their gross revenue to marketing. However, some law firms start with a range of 2–5%, particularly for those firms prioritizing efficiency over growth.
Medium Firms: Medium-sized firms often dedicate 5–10% of their revenue to marketing. Most medium firms are in “growth mode,” and tend to compete with other local law firms for clients.
Large Firms: Larger firms can allocate as much as 10–20% of their gross revenue to marketing since these firms have more resources to expand their market share. You’ll see this most commonly in competitive practice areas like Divorce Law or Personal Injury.
Law firms looking to grow tend to spend more.
Firms aiming for growth should consider spending between 10–12% of their revenue on marketing.
If a newer firm is looking to establish a brand presence in a new market, or reach more clients online, they’ll want to invest heavily in digital marketing strategies, such as paid advertising, content creation, and local SEO.
Your practice area can influence how much you need to spend to compete.
High-Competition Areas: Certain legal areas like personal injury, family law, or criminal defense often require a larger marketing budget due to intense competition.
For example, personal injury firms may spend significantly more to dominate paid search or advertising.
Niche Areas: Firms specializing in niche practice areas may be able to spend less, but they still need a strong presence in specific digital channels that resonate with their target audience.
As an example: Smaller estate planning law firms may not need quite as large a budget as a medium or larger sized personal injury law firm, since they generally target a less competitive niche in a smaller geographical area.
A note on competitive niches: Newer firms in highly competitive regions will probably need to allocate a larger portion of their revenue to marketing so they can break through the noise.
Beyond digital marketing, these types of firms may want to look into investing in branding campaigns, networking efforts, and sponsorships.
SEO can help lower the total cost a firm may pay per case.
In marketing, CPL (“cost per lead”) is an important metric. In law firm marketing, a “lead” is a case. So to judge how well a marketing campaign is running, you’ll want to calculate your total “Cost per Case.”
How to calculate Cost per Case
Total # of New Cases / Total $ spent on marketing = Cost per Case
Local SEO can help lower that overall Cost per Case since law firms do not pay for when someone clicks on a natural organic result in Google’s search results.
By investing in SEO, a law firm can save themselves a ton of marketing budget.
Here’s an example:
Wade Litigation invested in SEO starting around May 2023, and saw slow but steady growth. Now, 2 years later, they appear in over 2,600 searches a month.
That same website traffic would have cost them close to $20,000 a month to replicate with Google Ads.
Sample Marketing Budget Breakdown
Let’s assume a medium law firm is making $5,000,000 annually.
If they allocate 10% of their revenue to marketing, here’s how you might divide that among marketing channels to get the best results:
- 40% ($200k): Digital Advertising (Google ads, Bing ads, social media ads)
- 30% ($150k): SEO (content optimization, technical SEO, citation building, etc.)
- 20% ($100k): Website design, social media content, public relations, videos
- 10% ($50k): Brand building (branding, billboards, connected TV ads, swag, gifts)
Final Considerations
Your marketing budget should align with your firm’s growth goals, client base, and competitive landscape.
Small firms focusing on steady growth may need less, while large or aggressive growth-focused firms will likely require a larger spend to stay competitive.
A law firm in a highly saturated market will need to invest more in branding and advertising to make a lasting impression.
By understanding the specific needs of your law firm—whether you’re a small boutique firm or a large, growth-focused practice—you can create a marketing budget that delivers a strong ROI without wasting money on marketing services that don’t fit your exact situation.
