Move on, Halloween and Thanksgiving: it’s law firm budget season.
While budgeting is never a particularly fun exercise, creating the law firm’s 2022 marketing budget brings a lasting baggage of the COVID-19 pandemic and new challenges in an increasingly digital world. It is essential that law firm leaders understand this specific context and allocate their resources accordingly.
Industry data shows two themes law firm executives should keep in mind this budget season:
Marketing spend is down in 2021, but it’s not forever. According to the State of Gartner’s 2021 Marketing Budgets, overall marketing budgets have grown from 11% of revenue in 2020 to 6.4% of revenue in 2021. This is the lowest level of marketing allocation. of the history of the investigation.
Spending is down, but these unprecedented times won’t last forever, and there are already signs of a rebound: In an August 2021 survey, marketing directors said marketing spend rose 5.2% in the past 12 months. At the end of the year, they expected a 13.4% increase from 2020 levels.
Although there is no specific legal data on the subject, Thomson Reuters reports that demand from law firms is up 7.3%. And while overall second quarter overheads were down 4.1% from a year ago, that’s a substantial jump from the first quarter, where they were down more than 8%. %.
To remember : It is dangerous to use your meager pandemic budget as your new baseline. Your competitors are starting to reinvest in marketing communications and business development tactics.
As the Gartner survey summarizes: “Marketing budgets have always been the first of corporate budgets to be cut and the last to be restored… the illusion of savings today poses a significant risk for tomorrow, because brands lose the ability to reach customers with targeted and timely messages.
This budget season, resist comparisons to 2020 and 2021. If you must have a temporal connection, look at 2019 for a pre-pandemic perspective on marketing investments. But be prepared for a distinctly different landscape, as we’ll see next.
Marketing expenses are becoming virtual. Law firm marketing budgets are about to undergo a major shift, according to a report from Calibrate Strategies:
- 84% of law firms plan to spend more on technology and digital programs as a result of COVID-19;
- 82% plan to reduce their sponsorship spending; and
- 93% plan to reduce in-person events, with more than a third reducing events by 50% or more.
To understand the significance, it’s helpful to see how companies allocated resources to these categories before the pandemic. While every business (and every marketing budget) is a little different, ALM Legal Intelligence benchmarks provide some pre-COVID benchmarks:
For both business sizes, sponsorships and events included more than half of their marketing budgets – and may soon be overtaken by the single-digit category.
To remember : If you’re one of the many law firms on the verge of investing more in digital marketing, be sure to do it wisely.
One main concern: the law firm’s website. Your social media, paid search, organic search, and digital advertising will drive traffic to your website. It is the foundation of everything. Is your current site designed to close business? Does it provide the evidence potential customers need to know you’re a safe choice? Since more than half of your visitors will be looking at lawyer biographies, are their profiles smart and memorable?
Second: your digital strategy (or lack thereof). It’s easy to waste a considerable amount of time and money online (as many of our Netflix and Amazon accounts will attest). It’s hard to rank which keywords people actually use. It is difficult to build a loyal and engaged following on social media. It’s hard to capture a prospect’s attention with a digital ad and guide them through a sales cycle. Don’t believe consultants who say otherwise.
Instead, approach your digital marketing as you would your old-fashioned business development:
- Make the right first impression. Your website is now your home space.
- Introduce yourself to the network where your prospects are. Be present on relevant social networks. Think of Google as your new go-to source and make sure your SEO answers that age-old question “Does anyone know anyone who does this?”
- Build up your credibility. Without live events to serve as a platform, share articles online and speak in webinars.
COVID-19 has disrupted the operations of law firms. Smart companies will take this opportunity to re-evaluate their marketing strategies with creativity, determination and empathy for customers. Pitfalls abound for companies trying to sustain pandemic budgets forever or rushing digital without a clear plan.[View source.]