This is my next article on how attorneys can increase and keep more of their profits. My last post looked how firms can grow profits by leveraging technology. I stressed the point that there’s a big difference between using technology in your practice and actually leveraging it fully and increasing efficiency. I’m going to use this article to discuss the first thing most firms think about when it comes to growing profits – marketing. Want to make more than most of the other law firms out there? If the answer is “yes” then read on. If the answer is “no,” then,……..well………ok.
Most firms immediately think of marketing when they decide to grow profits. There’s a few things to consider with that approach. First, the quickest way to grow profits is to improve your firm’s efficiency as most offices are an exploding volcano of wastefulness which looks like this:
Not focusing on efficiency means that you might as well just be running money through the paper shredder. Second, attorneys tend to implement a
resource consuming, profit depleting, return on investment killing inefficient approach when increasing their marketing. This article is going to focus on the problem of inefficient marketing as the rest of this series is dealing with the first problem (the general inefficiency of law firms).
Attorneys put their money in the wrong place in an effort to “get more phone calls”
If you’ve been following this blog for any length of time then you know I’ve gone on, and on, and on, and – you get the point, about the need to invest in marketing assets that you’re going to own rather than renting ad space from third parties. Rather than continuing to beat that same drum I’ll provide a few links to articles on the topic. For those of you who don’t follow this blog then, first of all, you can subscribe in the right hand column of this website and never miss another post (hint, hint). Here’s some more reading on the difference between investing in your own assets rather than spending money on rent (the links will open in a new tab).
Attorneys will be more profitable if they focus on using marketing assets which they own
Let’s use some simple math to show how your firm will be more profitable if you focus on investing in assets rather than spending. We’ll look at two competing methods. Method one will assume you received one hundred clicks through pay per click at an average cost of $25 per click. Method two will assume you invested in a blog post, at a cost of $125 (which is what we charge for blogging as part of our attorney web design and seo service) and the post receives one hundred clicks over a period of ninety days. Let’s assume, for the purposes of discussion, that 100 clicks results in $10,000 of revenue.
- Revenue – $10,000
- Marketing – ($2,500)
- Net – $7,500
- Revenue – $10,000
- Marketing – ($125)
- Net – $9,875
Obviously Method 2 is a way better result. Here’s the bigger thing – that $2,500 you spend for pay-per-click in that first month is gone and will never generate you anything beyond the original $10,000 in revenue. To get the next ten grand you have to drop another $2,500 in advertising. The blog post that you own, under Method 2, will keep bringing in revenue. This means that attorneys who focus on Method 2 will end up looking like this fine chap as time goes on:
Those who focus on method one, by contrast, will end up looking like this guy as time goes on:
My preference would be to look like the former.
I know what you’re thinking. You’re saying “but I can’t wait three months to get one hundred clicks from a blog post when pay-per-click can get me that in a month.” First of all you should be blogging regularly and the return on those posts will compound exponentially. Second of all, if you focus on the instant gratification of pay-per-click then you’ll be chasing your own tail for the next twenty-five years wondering why you’re not getting ahead. Are you really willing to spin your wheels for twenty-five years just so you can avoid the few months it takes to get a law blog off the ground?
The most interesting thing is that I speak with attorneys who use the argument above to justify their continued use of pay-per-click. They take a “but I need business now” approach. These attorneys aren’t even considering the fact that lawyers can advertise for free on Craigslist and that the business such advertising brings in can keep things going while your blog gets traction. In the end, if you want to be profitable, you should only be putting your resources into something that you’re going to own at the end.
Want to be successful? Invest in your firm rather than spending money on it. If you don’t want to be successful then, don’t.