How to Create a Measurable Law Firm Marketing Budget

Throughout its history, many law firms have shied away from traditional marketing to maintain a sincere and pragmatic image. With the rise of digital marketing and increasing competition, law firms are pivoting their focus on full-scope marketing strategies to stand out. Continue reading to learn the need for law firm marketing, how to create a budget, and track your law firm’s budget with legal billing software.

The Importance of Law Firm Marketing

Law firms are, first and foremost, a business. All businesses rely on a steady flow of new clients and businesses to stay afloat, and growth is an important part of the strategy.

With this in mind, many law firms are focusing on marketing to gain a competitive edge in the market. Unlike some of the flashy, over-the-top campaigns we see in other industries, however, law firm marketing is intended to showcase how trustworthy, professional, and reliable a firm is.

It’s common for law firms to use all available avenues for digital marketing, including search engine optimization, email marketing, social media, content marketing, and search ads.

How Much Do Law Firms Usually Spend on Marketing?

The marketing budget for a law firm can differ according to its goals. But interestingly, many law firms have no budget at all, leaving marketing efforts on the back burner.

If you’re intent on setting a marketing budget, know that large law firms spend anywhere from 2% to 5% of gross revenue, while small firms spend between 5% or 10% of gross revenue, according to the American Lawyer.

The budget can vary according to many factors, however, such as location, existing branding and reputation, and practice area.

What Should My Law Firm Marketing Budget Be?

In determining your law firm budget, you should consider:

• Law firm age: Younger firms typically have higher budgets to capture market share
• Area of practice: Different practice areas have different goals and sales funnels
• Location: Highly competitive areas will require higher spend
• Current marketing efforts: Starting from scratch will require more initial marketing spending to gain traction
• Marketing strategy: The level and types of marketing campaigns may call for different investments
• Competitor budgets: Large law firms in the area can drive up the cost of marketing for all firms

You should also consider retention vs. acquisition marketing.

Retention marketing is designed to remind your former clients of your services. Generally, it costs seven times more to attract and sign a new client than retain an existing client, so retention marketing has a better ROI overall.

Acquisition marketing is designed to attract new clients. The budget should be divided between traditional and digital marketing efforts, including social media, SEO, PPC, content, and print or television ads.

Instead of working with an arbitrary budget figure, develop a customized figure based on your needs and goals.

Best Practices for Creating Law Firm Marketing Goals and Tactics

It’s important to take the time to create a detailed marketing strategy and roadmap to save time and maximize your marketing budget. With a defined plan, you can evaluate your marketing efforts to see if you’re on track to reach your goals, adjusting as needed.

Establish Marketing Goals

Your marketing goal is what you hope to achieve with your marketing efforts. Without a set goal, it’s impossible to track and measure success.

Marketing goals should always be SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound). This ensures that you can track and measure your efforts effectively.

For example, setting a goal to “bring in new clients” doesn’t fit the SMART goals framework. You should have specific numbers and time frames.

Some examples include:

• Gaining X clients in Q3
• Increasing firm revenue by a certain dollar amount within six months
• Increasing web traffic by the number of visitors in a month’s time

Cultivate a Brand

Branding isn’t just for retail products. Law firms have brands, too, and the right brand can attract the ideal client. Cultivating a brand is a long and involved process, but establishing consistent and powerful brand assets like the mission and vision of the firm, the firm’s brand values, and its unique value proposition are a good starting point.

Leverage Content Marketing

Content marketing is key for law firms from both a general marketing perspective and an SEO perspective. Having valuable content not only establishes a firm as a thought leader in the industry, but it helps prospective clients discover firms as they search for solutions to their legal problems online.

It’s not enough to just churn out content for the sake of it, however. You should create original, in-depth, and valuable content that addresses common questions or concerns of the target client. This may include legal blogs and articles, podcasts, video series, and infographics.

Include Video Content

Video is quickly becoming a huge trend in all of the marketing, not just for law firms. Audiences prefer video over text because it’s more engaging. Video also helps to distill complex topics into more digestible content for better retention.

There are virtually limitless options for video content for your law firm. Consider options like client testimonials, industry interviews, or Q&A series that address common questions for your practice area. Videos can be used on social media, the firm’s website, and email blasts.

Tips for Tracking Law Firm Marketing Budget and Expenses

Marketing is an investment, so your marketing budget is not a “rainy day” fund. Whatever you allocate for marketing, make sure you spend it.

Consider time and money. Spending your entire marketing budget won’t do much if you’re not putting time into your marketing strategy. You should devote at least four hours per week to marketing activities, which you can track with task management tools.

Evaluate your ROI. If you’re putting hard-earned money into marketing, you should track your progress with timekeeping and expense reporting tools to ensure the spending is worthwhile. Different marketing channels have different time frames for tracking progress, but all of your marketing efforts should be evaluated on a regular basis.

Analyzing your efforts against your set goals will determine if you’re on track to meet them or whether you should make adjustments. It will also reveal the most successful channels, so you can allocate your spending appropriately in the future.

Key Takeaways

A flow of new clients is key to growth and profitability for a law firm. Marketing gets your firm’s name out there and attracts new clients, but you need a solid strategy and a marketing budget to direct your efforts and ensure you’re getting the most out of your spending.

Time is of the essence for law firms. Not only is accurate lawyer time tracking vital for record-keeping and tracking billable hours, but wasting time on manual tasks and following archaic processes distracts from what’s important: practicing law and growing your firm. 

Many lawyers choose to track time the old-fashioned way: manually recording their time in logs and calendars.

But this introduces the possibility of inaccurate timekeeping, missed billable hours, and — especially if your firm is large or growing — inconsistent record-keeping habits amongst your staff. As a result, you lose time, money, and even clients.

Replace the headache of manually documenting every detail of your day down to the minute with an efficient lawyer time-tracking software like Bill4Time. Save time, record every billable hour, simplify time entry and track productivity. Bill4Time gives you back the time you would otherwise spend logging hours so your team can focus on serving clients and growing your practice.

What Is Legal Time Tracking?

Legal time tracking is when a lawyer records how much time they’ve spent working for a client — whether it’s in the office, in a courtroom, or on the go. The American Bar Association (ABA) sets guidelines for legal time tracking. First-timers, especially, should:

• Regularly check their bills. That way, you can avoid getting accused of padding hours (or essentially rounding up and overcharging clients).

• Charge reasonable fees in accordance with Model 1.5 or your state’s equivalent. This number can help monitor your hours and share if you over or undercharged someone. 

• Use time tracking tools to help ensure accuracy and organization. You can log your hours via your phone, computer, or tablet.

Bill4Time helps you comply with ABA and state guidelines.  

What Do Lawyers Use to Track Their Time?

Legal time tracking has evolved in the past several years. Even still, lawyers stick to “ol’ reliable” and continue the traditional method of time tracking. They’ll handwrite their billable hours and manually log their tasks on notepads, spreadsheets, and sticky notes. When lawyers use this method, they usually track their time using 10- or 15-minute increments when they enter their time at the end of the billing period — and those are big chunks of time.

Increment Billable Hours

When you set up your time-tracking system, though, figure out the time increments in which you’ll charge your clients. Think about setting up a billing chart template. It’ll help you calculate how many hours you can charge per time increments.

The standard method for lawyers is to bill every 1/10th of an hour or every six minutes. Any shorter than that can be tedious and time-consuming when you try to manually track them. Any more increments risk overcharging and padding. The six-minute increments aim to combat both of these risks.

Automated Time Tracking

The busier you get, the more difficult it is to stay organized and stay on top of logging –– even when you have a billing chart. In that case, you may want to try automated time tracking. This technology allows you to log your hours right away and track how long you’ve spent in meetings, making phone calls, writing and sending emails, and going from website to website, among other tasks.

By the end of the day, you can easily figure out what you did and how long you spent on each client. It’ll give your administration team less of a headache when you submit your hours and send clients’ invoices.

What Is Time Tracking Software?

Time tracking software is a simple and efficient way to accurately log your time working for your clients. Bad timekeeping is the culprit for more than 30% of lost billable time, and our legal time tracking software is the solution. All you need to do is start a timer on your computer, phone, or tablet and enter how much time you spent on a task.

You may think, “Well, yeah, but why do I need software to do that when I can do it on my own?”

You’d be interested to know that that’s just one benefit of having legal time tracking software, as it also offers:

• Flexible time tracking: This feature covers recording billable and nonbillable time, separating tasks unrelated to internal non-client time and keeping track of staff, consultants, and other colleagues.

• Staying on top of your time spent on clients: With legal time billing software, you can check your weekly time summaries, so you can gauge your firm’s financial status and productivity.

• Easy time entry: This feature allows you to run multiple timers on one screen and account for appointments as time entries.

These features can make every billable hour count so you can charge your clients and get paid fairly.

Best Legal Time Tracking Software for Lawyers 

There’s a plethora of legal time tracking apps, so it may be overwhelming to choose one that best fits your needs. Ask yourself which features would be most important to you.

While you’re doing a search, see if the time and billing software offers:

• Convenience: Hours, tasks, phone calls, meetings, upcoming events, and every document you can think of. Do you have to be in the office at your computer to log this information, or can you do it anywhere?

• Accuracy: Accuracy should be one of your firm’s highest values, and the software you choose must reflect that. Does the software help your firm cut back nonbillable hours? Does it allow you to go back and make a correction if you didn’t stop your timer or need to update a client profile? If the answer is no, you may want to keep looking for technology that leaves wiggle room for human error.

• Accessibility: See if the software produces periodic reports on timekeeping. Knowing what you’re dedicating your time to and for how long helps you make more well-informed decisions about the direction of your firm.

There’s more to a legal software app than just timekeeping, so check out the other features the software offers that keep all aspects in check. That includes case, task, and documentation management, trust accounting, invoice template customization, and system integration.

Bill4Time is your way to go if you want to get to a point where you’ll barely have to think about legal billing. It’ll do the work for you, so you can focus on what’s most important: your clients. Within the first few hours of use, you’ll be convinced that it’s the best time tracking software. 

Common Mistakes Lawyers Make with Time Tracking

No matter how convenient spreadsheets and manual time tracking seem, they leave room for inaccuracy. If inaccuracy gets through to the clients, your reputation as a brand takes a hit. 

But what aspects of manual tracking can get you into trouble? Well: 

• You can easily lose track of time, making it easy to miscalculate your hours. That may transfer into under or overcharging your clients.

• You end up spending more time working, which means adding nonbillable hours to your day.

If you get into a dispute with a client, you’d have a hard time proving your process and the time spent working. Legal billing software prevents you from these stressful disputes. 

Another mistake lawyers make is waiting until the end of the day to log their hours. By then, you may not even remember what you had for breakfast. How would you remember how long you spent working on a client’s case and what you covered? Make a habit of recording this information right away, so you don’t make a mistake when sending your clients their invoices. 

Having a legal time tracking app can save you time (and panic) when you have to charge your client. That way, you can easily pull up what tasks you performed and for how long when you bill your client. If there’s ever a dispute, you’ll have the evidence of your work to back up your claim right in your pocket.

Implications of Improper Lawyer Time Tracking

If you improperly track your time, the consequences may go beyond a little back and forth with your client. They could accuse you of padding, meaning you overstated how much you worked for them and are overcharging them as a result. If you and your client don’t resolve this dispute, they could sue you for legal malpractice, which could destroy your firm.

On the flip side, improper time tracking risks revenue leakage (or an unintended loss of profit for your firm). So, all that time you thought you spent being productive ends up going to waste.

If revenue leakage goes unnoticed long enough, you may not have the funds to sustain your firm, resulting in bankruptcy or even going out of business.

Tips to Improve Time Tracking

To stay on top of time tracking, implement a time tracking policy and use your resources. Think about working with:

• Timesheets: We know it’s hard, but ditch Excel and your handwriting logs, and opt for a timesheet. Create a template that allows you to document your start and finish times on certain tasks. After a while, you may make a note of a pattern in your schedule, so you can expect a reasonable game plan every day and adjust accordingly. Review it every now and then to check your progress.

• Calendars: Having a big calendar up in your office or on your phone helps you know what to expect in the upcoming months. A calendar can make it easier to prepare your timesheet and designate certain times to log your hours. Bill4Time offers a seamless integration with Google Calendar allowing you to make updates on either calendar that are automatically synced. 

• Timers: Timers are a life saver for lawyers for obvious reasons, but it also helps differentiate billable hours and nonbillable hours, ensuring your firm’s integrity and precision.

The key to lawyer time tracking is making it simple. Tracking your time should be something that flows seamlessly throughout your day, no matter how many cases you’re working on. Bill4Time keeps your time tracking and legal billing in a centralized location to give you better insight into how and where your time and money are being allocated. To see how Bill4Time can do the heavy lifting for your firm, you can schedule a demo today to see the platform’s time-saving features in action. 

We don’t need to tell you that the legal industry has changed over the last few years — the once gradual switch to digital has become more rapid. While changes in the industry at large may not immediately impact the success of your firm, your client’s expectations and how they do business with you, will. 

In a 2022 commerce and payments trend report, 50% of consumers responded that they consider themselves more digital than ever before. Clients have unlimited on-demand access to pay bills or make purchases — all they need is internet access and a payment method. Time is a luxury and this simple payment process affords consumers the efficiency they desire. 

With paper check usage plummeting by 1.8 billion per year and 40% of individuals more likely to retain firms that accept online payments over those that don’t, adopting digital processes is the best way for firms to remain profitable and competitive in the market. 

Luckily, getting started with online payments has never been easier. Bill4Time’s built-in payment processor, Bill4Time Payments, offers industry-leading technology that makes getting paid faster and conducting business with your client easier than ever. 

Keeping track of the time spent on meetings, briefs, case research, the discovery process, and other billable hours is a fundamental part of a lawyer’s day. Every lawyer has their process for tracking their hours, but the important question is:

How accurate is the time tracking?

Losing track of time, forgetting to stop a timer, or otherwise “guessing” at an hour can lead to billing issues or even legal implications. Without reliable processes for timekeeping, law firms suffer from significant operational challenges.

What Is the Importance of Time Tracking for Lawyers?

Lawyers rely on billing by the hour almost exclusively. While some lawyers use a retainer or other billing structure, the majority of lawyers are tracking billable hours.

Errors in either direction are harmful to a lawyer and a firm’s reputation. If the billable hours are underestimated, the lawyer and firm lose money for the time spent on a client’s case. If the billable hours are overestimated, the client may question the accuracy. The last thing any lawyer wants in this competitive market is a bad reputation.

What Do Lawyers Use to Track Their Time?

Many lawyers use traditional methods of calculations where clients are charged on the billable hour in 10-15 minute increments. Lawyers often captured this time manually in a spreadsheet or on paper. However, this process of tracking time should be avoided as it is prone to human error and can be easy to lose track of time. 

Manual tracking is not only cumbersome in itself, but it has no accountability as a tracking method. The results aren’t as accurate as can be expected, and if there’s ever a dispute, the lawyer has no transparency to account for the time spent.

What Are the Risks of Lawyers Not Tracking Time?

Here are 3risks of not using time tracking software for lawyers.

1. Losing Billable – and Non-Billable – Hours

Billable hours are essential for a firm to operate, but they must be accurate. If a lawyer is manually logging billable hours, it’s a risk to overall profitability.

Worse yet, some lawyers don’t log time as they work, which inevitably leads to time being lost. Waiting until the end of the day can result in a 10% loss of time for lawyers. Longer than that and the loss jumps up to 25% or greater.

This doesn’t only apply to billable hours. Tracking non-billable hours helps lawyers accurately price legal services and identify processes that can be streamlined or outsourced to ensure the overall firm is profitable.

2. Discrepancies in Billing 

Billing processes can take up a lot of administrative time, especially with a manual time tracking process. The law firm’s staff has to sort through time records from individual attorneys, organize them, and enter them into a law firm’s billing system.

With efficient time tracking software, lawyers can track time on their own using the software, which is then consolidated for staff to generate accurate invoices. This not only ensures an easier billing process, but it reduces the time spent on administrative tasks that hinder productivity and cost money.

3. Impact on the Client Experience 

Clients may come to a law firm or lawyer for legal expertise, but the client experience is heavily relied on how easy it is to do business with a firm. This applies to all aspects of working with a firm but especially billing. 

It starts with having an efficient, automated time and billing process. With Bill4Time, a lawyer can easily jump between cases while timers capture time. This process allows lawyers to work freely without guessing about the time they spend on a specific case. Once this time is captured, the firm can create a detailed, custom invoice that accurately reflects the billed time. 

Showcasing your law firm’s use of legal technology and automated processes during intake is a simple way to set the stage for a transparent attorney-client relationship.  

Make the Switch to Time Tracking Software

Time is money, so lawyers need to adopt processes that are efficient and precise. With Bill4Time’s time tracking software, lawyers can gain better insight into where they spend the most time with custom reporting, and automated features to increase the accuracy of their billing. In and out of the courtroom, Bill4Time allows you to track and bill your time wherever you go.

A username and password are enough for many sites, this single-factor authentication is often used for retailers and other such sites. However, more sensitive data, like the information law firms store, should be guarded by multi-factor authentication. Hackers can access a lot of information with just a username and password, including a social security number, bank or credit card information, medical records, and more. On top of that, many people use a similar username and password across sites, so if a hacker gets one, they may get them all. 

This scenario is one that law firms simply can’t risk. As cyberattacks continue to rise, it’s imperative for law firms to educate themselves and utilize the cybersecurity resources available to protect their business.

What Is Multi-Factor Authentication?

Multi-factor authentication (MFA) requires one factor, such as a password, that’s combined with another factor, such as a code, a device, or other personal identifiers like biometrics or voice recognition. Even with these parameters, a long, intricate password that is difficult to trace is still important. Generally, a good password consists of 20+ characters or a phrase that can be very strong, yet easy for the user to remember. Hackers want quick “attacks,” so the goal is to create a long enough password that creates more work and is difficult to guess. 

It’s important to remember that no password is fail-safe, which is why MFA is important. It is an extra layer of protection that is difficult for a cyberattacker to have access to. 

Why Law Firms Should Enable Multi-Factor Authentication

Some firms think security is reserved for large and prominent law firms, but it’s actually more common for small firms to experience a breach. For one, there are more small or solo firms, and they often don’t have the resources or team to handle their security.

A firm with Office 365 or Google Suite can enable 2FA quickly and easily. Employees will not need to go through the two-factor process for each log-in. Instead, 2FA is required for each login attempt from a new device. 2FA requires additional verification every so often, but it’s far more convenient than dealing with a breach and the possible business, legal, and reputational harm.

Incorporate Legal Technology in Your Firm’s Cybersecurity Strategy

Utilizing law practice management software is a simple way to secure your law firm’s data. Using cloud-based software, like Bill4Time, performs automatic routine updates to ensure the platform is always up to date. Out-of-date software is a common source for cyberattacks because it creates a weak point for hackers to enter.

Bill$Time also offers customized security measures like MFA. This change can only be done by users with access to firm-wide settings, such as a firm administrator. Similarly, administrators can configure the user permission settings and access for every function. Permissions and access for each task and each user can be customized, including temporary access for contractors. Administrators can also track logins automatically, so if there is a breach, it’s easier to pinpoint.

Multi-Factor Authentication and Your Firm’s Email

An email account is among the most important accounts for law firms – and anyone else – to protect. More times than not, an email provides avenues to access other accounts. Password recovery is often tied to emailing a link to reset a password. If an email account is compromised, all the account passwords could be reset.

With two-factor authentication (2FA) enabled on an email, a hacker would need access to both the email account and a smartphone or other device. This added step reduces the risk of hackers not only gaining access to email but potentially resetting other passwords.

If a device like a smartphone or a tablet is used for authentication, it’s important that they’re also protected with a PIN or fingerprint. Again, this is about creating layers of security. Like email, having access to a phone, whether it’s stolen or hacked, gives someone access to an array of accounts and information.

Outlook on Multi-factor Authentication for Law Firms

Data breaches happen, but with preparation, they can be prevented or controlled. Law firms can protect their sensitive information by creating obstacles for cyber attackers like difficult, frequently changed passwords, user access controls, and multi-factor authentication.

A business can’t run smoothly without a consistent process, proper legal project management, and work allocation among staff. In law firms, tasks can originate from many sources — clients, partners, or firm management. How these tasks are distributed typically depends on specialization, skill, and time sensitivity. Unfortunately, what’s not mentioned in this list is bandwidth. Accounting for staff workloads can be difficult in situations where there are too many time-sensitive tasks or limited staff. If your staff is overloaded with tasks the likelihood of items falling through the cracks increases as well as burnout. Both of which lead to a decrease in productivity and disruption of business. 

To limit risking business continuity or your staff’s mental health, it’s essential for law firms to create streamlined, consistent systems to distribute workloads and keep all employees on the same page. 

Here are 3 tips for better legal project management and work allocation of law firm staff: 

1. Plan and Strategize

Effective work allocation requires thorough planning and strategizing with real-time visibility into the staff’s schedules and workloads. This is especially true of large firms with a lot of staff members. If partners or management aren’t aware of how much each associate or staff member is balancing, they may unintentionally overload them. 

Ideally, there should be a centralized task management system that management uses to plan and assign work to associates and other staff members. This system should be updated daily and would provide current information on everyone’s current responsibilities. This ensures that management and partners can monitor their workloads and avoid piling everything onto just a few people.

With this information at their fingertips, partners and management can make strategic decisions to ensure that the appropriate work is allocated to the appropriate staff. 

2. Divide Work Evenly

Overloading some associates and leaving others underutilized can quickly lead to issues of burnout, poor work-life balance, and job dissatisfaction. At a time when firms are struggling to attract and keep talent, proper work allocation is paramount. 

Legal practice management software can help partners and firm management to evenly distribute work. LPMs provide a comprehensive view of the staff and their time, schedule, and skill sets, giving partners and management all the information they need to develop all the staff’s competencies and keep the workload more balanced. Workloads should be balanced across departments as well. Work allocation requires planning, especially so in larger firms with multiple departments or offices. This is all the more reason to make work allocation a strategic and streamlined process. 

Processes for work allocation can be standardized and systemized across the firm, offices, and practice groups. Law firms can set this up on their own with task and time management solutions, but if necessary, a larger firm can hire support staff to handle work allocation and develop systems to assign work to the appropriate parties.

For example, a work allocation manager can manage workflows and monitor skills and availability across all practice areas, departments, and locations to ensure the entire machine is running smoothly.

3. Track Development Needs

It’s tempting to hand off high-priority tasks to the most capable and experienced associates or staff members, but that doesn’t serve the firm’s long-term needs. If the same staff members keep learning, growing, and succeeding, it leaves skill and experience gaps in others. 

Law firms should have a comprehensive view of the qualifications, skills, and proficiencies each associate has, areas of growth, and the skills they’d like to develop in the future. This provides a more democratic method of assigning tasks while keeping the whole team learning and growing together. A law practice management software that has custom reporting functions can help keep track of user activity or where tasks have been historically allocated to simplify this process.

If significant skills gaps are discovered, law firms need to take a proactive approach to correct them. All associates and staff members should have management training, business development training, client training, and communication training. Associates should have ongoing development in areas related to their practice or the firm’s goals. Partners and managers should be available for support and ongoing mentorship to help associates stay on track to reaching their goals.

The Importance of Legal Project Management

Legal project management and work allocation across teams can be a unique, ongoing challenge. However, with the right systems and processes in place, your firm can ensure that work is dispersed evenly and fairly. When done strategically, not only will this help move work forward and support productivity, but it will improve the overall satisfaction of your staff at the workplace. Above all, the livelihood and health of your staff is the true marker of a successful business.