The Law Firm Marketing Metrics Every Managing Partner Should Know
Carl Downey and I recently debated the most important marketing metrics on the Law Firm CMO Playbook Podcast. Catch the episode here.
During that discussion, I stood firm on my belief that there are only a handful of metrics that should truly matter to the law firm managing partner or owner.
First, you need to know how much the firm spent on marketing during the reporting period, typically a month. Without understanding the investment, it’s impossible to determine whether the results justify the expense.
Next, you need to know how many total leads the firm generated. This provides a high-level view of marketing activity, but lead volume alone typically says very little.
In my view, the most important marketing metric is the number of quality leads. And I define that as someone who fits the firm’s ideal client profile and has a legitimate need for your services. These leads need not convert into a client, and there are dozens of reasons why they may not. Also, too many firms become focused on generating more leads when they should be focused on generating better leads.
The next metric is the number of matters or cases signed-up (i.e. new clients). Marketing exists to create opportunities, but those opportunities only have value if they become clients. Tracking signed matters helps firm leaders understand whether the firm is effectively converting quality leads into business.
Finally, firms should track the revenue generated from those signed matters. While there can be timing challenges in certain practice areas such as personal injury – where revenue may not be realized for several months or even years – revenue remains the ultimate measure of marketing success.
Once you know your total marketing spend, total leads, quality leads, signed matters, and revenue, you can easily calculate other important performance indicators such as average cost per quality lead, average cost per case acquisition, average revenue per matter, and return on investment. Using these numbers is how you get to the right decisions about growth and investment.
One more important point. Just as important as the metrics themselves is how they are evaluated. Too many law firms place too much emphasis on a single month of results. Marketing performance naturally fluctuates due to seasonality, market conditions, staffing variations, etc. Instead of reacting to short-term fluctuations, law firms should focus on long-term trends. Looking at performance over several months provides a much clearer picture of what is working, what needs improvement, and where future opportunities exist. But remember, in order to evaluate trends, you have to have the data.
At the end of the day, managing partners don’t need complicated dashboards filled with dozens of metrics. They need a simple set of numbers that connect marketing activity to business results.
