Knowing (and more importantly, finding ways to improve upon) your return on investment is crucial to your law firms’ success in any marketing endeavor, and especially in a legal lead generation campaign. The good news is it’s typically very easy to calculate your ROI, since you’re only paying for valid leads that are delivered to your firm. Here we’ll walk through some sample ROI calculations that can be easily transferred to your firm. Lawyer internet marketing is very expensive and competitive, so it’s a good idea to audit your marketing campaigns every few weeks so you know where your money is being well spend, and where it’s being wasted. Anytime we do digital marketing for lawyers, we make sure to do periodic reviews with them to make sure they know, and we know, what’s performing well and needs to be ramped up, and what’s not and needs to be cut.
How Much ROI is Enough?
Across all business types in the US, marketing campaigns typically aim to get a return on marketing dollars invested of 200%-300%, or 2-3 times their initial investment. When talking about marketing for legal firms, we’re generally looking for slightly higher due to the increased labor costs… associate attorneys, paralegals, investigators, and expert witnesses generally don’t come cheap. So when dealing with digital marketing for lawyers, you probably want to get a slightly higher ROI than the average.
So let’s say our bottom line to consider a marketing campaign worth doing is 3-1, and we’ll be happy at 4-1. So for every $5,000 invested, we should be making back at least $15,000, and hopefully closer to $20,000. We’ll dive into ways to improve our conversion rates and boost our ROI as a result shortly, but first, let’s take a typical personal injury lead generation campaign over the course of a typical month.
Car accident leads tend to run $200-$250, so for this example we’ll say $200 per lead. So if you’re working with a legal lead generation company that’s delivering you 50 billable MVA leads per month, your investment in $10,000, meaning you probably need to make back $30k or more.
Conversion rates, or the number of leads that you turn into clients, varies largely depending on your intake teams’ capacity, persistence, and phone skills. There’s also an element of your law firms’ minimum case threshold, since obviously a firm that will accept a $10k auto accident case is going to have a higher conversion rate than a firm that has a $25k minimum. Lots of marketing companies neglect the minimum threshold when doing marketing for legal firms, and as a result can end up sending a lot of small cases to a firm that’s only looking for serious injury claims – not typically a recipe for success, or high ROI.
That said, in general our lawyer internet marketing clients report conversion rates between 15%-25% on our auto accident leads, so in the interest of being conservative, we’ll say 15%. According to Martindale Research, the average personal injury case nationwide is $52,900. That number is obviously skewed by a few gigantic settlements, since 84% of all settlements were under $75,000. Assuming you’re not getting any multi-million-dollar settlements from this campaign, let’s cut that number in half and call it an average of $25,000 per client. Further, assuming a 33% contingency fee, that would bring the firm’s gross profit per case, before any expenses, to about $8,000 per signed case.
Here’s how the math works out in this scenario:
50 car accident leads = $10,000 invested
50 car accident leads x 15% = 7.5 cases
7.5 cases x $8,000 = $60,000 in contingency fees.
$10,000/$60,000 = 6-1 ROI
This scenario should make just about all personal injury firms happy. That said, if you adjust the conversion rate down to 10%, or the average case size drops from $25,000 to $10,000, the numbers get a little murkier. So the key numbers to track are:
- Average Case Size
- Conversion Rate Per Campaign
- Cost Per Lead
- Volume Per Month
With these 4 simple pieces of information, you should be able to see at a glance what marketing and lead gen campaigns are working well and should be ramped up, and which are failing and should be killed or scaled back.
Let’s look at one more practice area, workers’ compensation leads, since it’s typically a lower priced lead and less attorneys fees per case.
Workers Compensation Lead Gen Campaign ROI Calculation:
- Cost Per Lead: $100
- Leads Per Month: 1000
- Conversion Rate: 15%
According to Martindale Research, the average workers comp settlement is $21,800. There are many factors that go into this, but it’s largely similar to a personal injury claim, where you’re getting compensated for your medical bills & ongoing treatment, loss of income, etc. Again adjusting for the few outliers that bring the average way up, we’ll call the average case worth $10k, with attorney’s fees of $3300 per case, on average.
100 work comp leads = $10,000 Monthly Investment
100 work comp leads x 15% = 15 signed cases
15 cases x $3300 = $49,500
$10,000/ $49,500 = Just under a 5-1 ROI
Both scenarios are assuming the 15% conversion rate. While this is the bottom of an average range, if we’re being completely honest, there are some firms that flat out suck at intake. So if you’re one of those firms, working with personal injury lead generation companies is probably not the best option… you’d probably be better served building out a solid referral base, or doing things within your community to brand your firm locally.
Digital Marketing For Lawyers: Intake, the Great Equalizer
Lawyer internet marketing tends to work best for firms that are equipped to call early, call often, send text and emails, aren’t afraid to be persistent, and are good on the phone with prospective clients. That said, here are some tips to help increase your conversion rate, and as a result, the ROI of your personal injury lead generation campaigns. This is taken in part from our article on client intake tips, found in its entirety here. Generating the lead is only part of a successful lawyer internet marketing campaign, following up and being good on the phone will exponentially help your conversion rates and ROI, yet so many lawyers overlook it.
- Make your first call within 10 minutes of receiving the lead. Often, people will fill out multiple forms online, and even if they can’t talk at the time of form submission, getting into their voicemail, inbox, or text app greatly increases your chances of success.
- Leave voicemails, send text messages, and send emails. People have different ways they prefer to communicate – meet them where they are, don’t assume everyone has the same communication preferences as you do.
- Try calling after hours. A large volume of web form submissions come because the potential new client is at work and can’t talk on the phone. If you make a call right away and get voicemail on day 1, make sure you’re calling back after work hours but still a reasonable hour of the day, typically between 5-8pm.
- Use a drip marketing system of some sort. There are tons of drip email marketing and SMS services available for free, or close to it. Since you’re paying for the marketing to get the information anyway, you should have multiple touch points, offering the free consultation and even to drum up referrals down the road.
While legal lead generation isn’t for every firm, a well thought out lawyer internet marketing campaign can have a Return on Investment that can help you grow your law firm very rapidly. Just make sure you know your numbers.