Most firms set next year’s marketing budget by taking this year’s spend and adding a little. It is quick, and it is the reason nobody can defend the number in March when one channel stalls and somebody wants it cut. Build it backward from signed cases instead, and it takes two sittings before the holidays.
Start with the cases you need, not the money you spent
Write down how many signed matters you need next year, by practice area. Not revenue. Cases. Then write what one is worth to you on average, in fee collected rather than claimed value.
Now work backward. Signed cases come from consultations, consultations come from inquiries, and inquiries come from channels. If you know your consultation to signed rate and your inquiry to consultation rate, you can turn a case target into a number of inquiries you have to produce. If you do not know those two rates, that is the first thing to fix, and it is a month of writing things down rather than a project.
Do this by practice area, not for the firm as a whole. A family law inquiry and a commercial dispute inquiry cost different amounts to get and convert at different rates, and an average hides both. If you cannot source half your matters, start with closing the gap on where your cases actually come from, because every number below depends on it.
Split the budget into three kinds of spend
Budget arguments happen because three unlike things are sitting in one line item. Separate them before you assign a dollar.
- Infrastructure. The website, hosting, intake and case management tools, call tracking, the email platform. This is the cost of being open. Review it on price, not on performance.
- Demand capture. Google Ads, the directories you can prove send you matters, and the search work aimed at people who already have the problem. Judge this line on cost per signed case and nothing else.
- Demand creation. Your LinkedIn presence, speaking, bar and chamber involvement, the referral relationships you maintain. This line pays back late, which is why it is the first thing cut in a nervous quarter and why most firms never learn whether it works.
Pricing the first line is a procurement exercise. The second is arithmetic once you have the rates from the section above, and what a healthy cost per lead looks like covers how to hold a number against it. The third is a judgment call you make once a year and then leave alone.
Decide now what gets cut in March
Every firm I work with has a channel somebody is suspicious of. The suspicion surfaces in the middle of a slow month, which is the worst possible time to make the call.
So write the rule into the budget document while nobody is anxious. Something like: if cost per signed case in this channel stays above a set number for two consecutive months, we pause it and the money moves to that channel. Pick the number now. You will be calmer and more honest in November than you will be in March.
Do the same with vendors. Put a review date beside each line, with what you need to see by then written out in one sentence. Running those conversations on a schedule instead of in a crisis is most of what strategy and vendor management actually is.
Leave a line you can spend without a meeting
Set aside a small monthly amount that any one person can spend without approval. A sponsorship of a Greeley youth league, a test campaign in a town you have never advertised in, a video shot on a phone.
The point is not the amount. It is that the channels worth adding next year almost never appear in this year’s plan. Firms with no discretionary line only add something new when they are desperate, which is when it is most expensive.
Put the review dates in the document itself
A budget without review dates becomes a spending habit by February. Pick four dates, one a quarter, and write beside them the three numbers you will look at: inquiries by channel, consultation to signed rate, and cost per signed case.
Name one person who owns the review. In a firm without a marketing hire, that is usually a partner who does not want it, which is the gap a fractional CMO fills. Either way the name goes in the document.
Common questions
What percentage of revenue should a law firm spend on marketing?
You will find percentage of revenue benchmarks published everywhere and they are a sanity check at best. A percentage cannot know whether your intake converts, or whether your market has five firms in it or fifty. Build the number from cases and rates, then look at the percentage it implies and decide whether you can live with it.
We are in Fort Collins but want Denver cases. How much more should we budget?
More than the map suggests, because you are buying attention where nobody knows your name and the ad auction is more competitive. Treat Denver as its own line with its own target and its own timeline rather than a wider radius on existing campaigns. Expect it to look worse than your home market for a while, and decide up front how long you will give it.
Should the budget include partner time?
Yes, at least as hours. Referral lunches, LinkedIn, the committee you sit on: that is the demand creation line, and it is the easiest thing in the plan to quietly stop doing. Writing the hours down makes the tradeoff visible when a trial month eats them.
When should we actually do this?
November and early December, while this year’s numbers are nearly complete and before the holidays take everyone’s attention. A budget written in January is a budget written in a hurry.
I run this exercise with firms from Fort Collins and Greeley down through Longmont to Denver, usually across two working sessions in November. If that is the help you want, law firm marketing covers what is specific to firms and the homepage has the short version of how I work.