Marketing is an investment, not an expense, for law firms that want long-term success and growth. While many firms view marketing as a necessary cost, strategic marketing requires viewing spending as an investment that provides future returns. To shift to an investment mindset, firms should evaluate recent spending to identify expenses versus investments, create a marketing plan focused on investments like targeted client events and website development, and devote a set portion of the budget to ongoing marketing investments even during difficult financial times. Viewing marketing as an ongoing, long-term investment is critical for law firm survival and competitiveness.

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MANAGING CAREER STEPS MARKETING FINANCE PRACTICE MANAGEMENT ADVICE TAKING THE LEAD
Marketing Is Investing
in Your Future
By Tea Hoffmann
LAW FIRMS VIEW and budget for their mar-
keting expenditures in a variety of ways, but there is
a pervasive view that marketing is an expense rather
than an investment. How can firms change this
mindset to ensure their long-term success?
Simply put, strategic law firm marketing is an
investment. Great law firms understand and embrace
this fact. However, many firms, if not most, continue
to think of, and budget for, marketing as an expense.
During the recent economic downturn, many firms,
even those that had once invested heavily in market-
ing, began to view their marketing efforts as expenses.
Other firms have considered marketing as an expense
since their inception.
The mindset that marketing is an expense is one of
the greatest impediments to a law firm’s growth. Law
firms who think of each dollar spent as an expense are
thinking short term. Lease payments and copy paper
are expenses. Once paid, these items do not create a
future return. On the flip side, an investment is not
immediately realized in most cases, and one expects a
return or benefit to be gained from the money spent.
Sales and marketing training for your lawyers, a great
website that draws clients to your firm and obtaining
and retaining excellent marketing staff are invest-
ments, and the majority of your marketing budget
should be dedicated to such investments. (See the box
on page 67.) Understanding the difference is critical.
Firms that want to grow and compete must embrace
this attitude.
MARKETING COST NORMS
Marketing budgets vary by industry, company size, length of time
in the market and overall business goals. Law firms have lagged
behind other similar professional service companies for over a
decade now. Gartner, Inc., surveyed firms across varying indus-
tries in 2014 and found that they were spending, on average,
10.2 percent of their annual revenue on marketing activities. The
American Institute of Architects reports that architects spend
between 5 and 10 percent on marketing. The American Lawyer
reported in July 2014 that the Am Law 200 firms spent about 2
percent of gross revenues on marketing-related expenses.

2. www.lawpractice.org l September/October 2015 Law Practice 67
Law firms have traditionally operated differently than other
businesses but, as a point of reference, a business that desires
to maintain its current market position, as a rule of thumb,
spends approximately 5 percent of total revenue on marketing.
Companies looking to grow or gain greater market share are
spending around 10 percent. Charitable contributions fall outside
of the marketing budget.
A WISE MARKETING STRATEGY
Many law firm marketers argue that their firms are simply not
spending enough money on marketing. Having practiced law
and having managed marketing departments, I know the internal
struggle from both points of view. The lawyers in many firms view
all marketing activities and staff as expenses. Yet the marketing
department strives to promote activities that are investments and
will add to the firm’s bottom line. The former position is pervasive
but is slowly changing as more and more firms begin to recognize
that without strategic marketing investments they will lose their
competitive advantage. So how can your firm shift from a market-
ing-expense mindset to a marketing-investment mindset?
The first step is to evaluate how current dollars are being spent.
Begin by looking at the last six months’ spending. Honestly eval-
uate why the firm spent the marketing dollars. Talk through each
item with your marketing and leadership team to determine
what the return on investment was or may be in the future. If you
can’t articulate why the money was spent and the future benefit
that will be derived, then you have a marketing expense. Once
you have gone through each item, compare your expenses to
investments. Note that some items are not easy to identify. For
example, is a hotel room purchased to visit a new client prospect
an expense? Traditionally, travel costs associated with business
are expenses but, for this exercise, I would classify these costs as
investments. While no immediate return may be gained, there
may be a future return.
The second step in this process is to create a written marketing
plan that is focused on investments. I have worked with firms that
have websites, but their sites are not working for them as invest-
ments. Websites that are essentially online brochures and do no
more than give directions to the firm or provide the most basic,
and expected, information are an expense. The same holds true
for many law firm events and memberships. If you are spending
money on tickets to sporting events, for example, and not requir-
ing your lawyers to attend them with their clients, I would submit
that this is an expense. You may have created some goodwill but
you have lost a valuable opportunity to get to know your clients in
a different context. Targeted events that deepen and further client
or prospective relationships are investments.
Finally, devote dollars to marketing investments. Firms that
maintain that they cannot afford to invest in marketing will strug-
gle to survive in the long term. Some level of marketing invest-
ment must be maintained regardless of the financial state of the
firm. If your budget is limited, pick two or three marketing invest-
ments that will be low in cost but high in impact and commit to
making these activities successful.
Don’t get comfortable. Yes, things do seem to be improving for
law firms, but firms that stop making investments in marketing
now will be surpassed by those that have shifted to an aggressive
marketing mentality. A stop-and-go or stop-and-wait mentality
toward marketing will hamper your firm in the long term in ways
that may not be evident immediately but will surface eventually.
For growth firms, marketing is an ongoing investment and should
be part of a long-term survival strategy. LP
Tea Hoffmann is the managing principal at
Law Strategy Corp. Law Strategy Corp provides
proven strategies designed to help lawyers
and firms become more efficient, effective,
productive and profitable. teahoffmann@
lawstrategycorp.com
Targeted events that deepen
and further client relationships
are investments.
INVEST WISELY
Each of these items is an investment, if positioned properly:
• Targeted advertising.
• Client development meetings (referral sources, peers,
industry or trade group meetings, existing clients, prospective
clients, etc.).
• Existing and prospective client entertainment.
• Targeted events and seminars.
• Graphic design and branding costs.
• Law firm network activities (if used properly).
• Focused mailings and communications (e.g., newsletters,
invitations, announcements, alerts and holiday cards).
• Marketing-related training.
• Client interviews.
• Marketing staff professional development.
• Memberships in industry, trade or professional organizations.
• Proposals and pitches.
• Public and media relations.
• Tickets and sponsorships.
• Website design and maintenance.
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