Budgeting Beyond Numbers for 2024: Building the Business Case for Your Law Firm’s Marketing Budget
Budget planning is a critical process that shapes the financial trajectory and success of any organization. For small, medium, and large law firms alike, the budgeting process serves as a critical tool for planning, allocating, and controlling the financial resources of the firm and its various departments. When combined with a well-crafted business case, budgeting becomes a strategic process that goes beyond number-crunching to a persuasive argument that justifies investments, validates strategies, and aligns stakeholders. Without this combination, budgeting efforts can end up ineffective, inefficient, and unapproved.
From experience, we know that a business case can be the strongest asset in helping secure necessary funds by aligning anticipated financial spending with strategic objectives and potential return on investment (ROI). Think of the business case as the compelling narrative that answers the questions why, what, and how of your initiatives.
In Part 1 of this three-part budgeting series, we provided a seven-step guide to mastering your law firm marketing budget and answered the number one question we receive from law firms during the budget process.
As Chief Marketing and Business Development Officers (CMBDOs) and other department leaders delve into budget planning, we provide several strategies that can substantially simplify the task of constructing a compelling business case. While we recognize the existence of distinctive circumstances unique to every law firm, including the categorization of investments as marketing or business development expenses, this blog post outlines an approach to budgeting that proves effective for firms regardless of their size, structure or available resources.
Building a Better Business Case
Align with the Firm’s Business Strategy: Budget planning is most effective when it is tightly aligned with your law firm’s broader strategic objectives. A robust business case highlights how each anticipated financial expenditure contributes to the realization of the firm’s broader objectives. For example, if market expansion into key geographic areas is a strategic goal of the firm, a practice or industry group budget can build the business case that budget allocation for certain strategic initiatives aim to increase market share in this specialized area while supporting the targeted expansion of the firm’s reach and reputation.
This alignment fosters a sense of cohesion across the firm, ensuring that financial resources are channeled towards initiatives that drive larger growth opportunities and support competitive advantage and demonstrates clarity regarding the firm’s strategic vision through investment.
Articulate other department objectives supported: A well-crafted business case clearly articulates how anticipated financial expenditure supports key objectives of other departments within the firm. For example, through your collaborative relationship with the recruiting department, you understand that a key strategic objective involves the firm attracting and retaining partners with high-value clients or in a target industry or geographic market. With this information, you can make the business case the budget allocation for certain initiatives supports the ongoing efforts for the firm to be short-listed by prospective lateral partners looking for a firm that is visible well-positioned and supportive of their lawyers’ business development and marketing efforts, which can be a powerful recruiting tool.
Data-Driven Decision-Making: A robust business case is built on a foundation of thorough research and analysis. It presents quantifiable data, market insights, and historical trends that substantiate your budget requests. For example, at Furia Rubel we utilize industry-leading, AI-based digital monitoring tools, such as SEM Rush and Critical Mention, to gather relevant data and report key metrics to clients for public and media campaigns. This information positions in-house marketing teams and leaders to demonstrate the impact of media relations efforts throughout the year and during budgeting season.
This data-driven approach empowers decision-makers with accurate information, allowing them to make informed choices that optimize resource allocation and focus investment on activities that yield the highest returns.
Measurable ROI: A cornerstone of building a persuasive business case lies in crafting a well-defined and anticipated Return On Investment (ROI). Articulating and providing data on the expected benefits, whether they stem from increased revenue, enhanced client retention, talent acquisition, or heightened efficiency, serves as a compelling rationale for allocating funds. This methodology should also include a framework for tracking the progress and success of initiatives.
For instance, the evaluation of firm-hosted events or conferences can be achieved through the analysis of various data points and the adoption of a program to track and calculate the value of these activities, which can be both expensive for the firm and time-consuming for its attorneys.
An immediate gauge of branding and awareness impact can be established by evaluating the guest list, including current clients, potential clients, and referral sources, against metrics such as open and engagement rates for digital invitations. Calculating the value of ongoing legal matters associated with attendees, alongside the generation of new leads and business retention, enables the firm to assign a monetary value to the conference’s outcomes. Post-conference surveys tracking attendee engagement and satisfaction offer valuable qualitative insights into the event’s overall success and pinpoint areas for improvement. This approach also serves as an additional branded communication opportunity for the firm.
In addition to these methods, monitoring subsequent actions resulting from the conference, such as heightened matter retention, an increase in referrals, and successful talent acquisition, paints a more comprehensive picture of ROI. Lastly, keeping tabs on social media metrics, website traffic, and online mentions linked to the conference helps gauge its broader reach and influence on brand visibility. Through the implementation of this phased approach, law firms can quantify the ROI of their annual conferences via a comprehensive review. This strategic approach also positions firms to fine-tune their strategies for future events, ultimately maximizing their value.
By integrating an illustration of the anticipated ROI along with a strategic framework for assessing outcomes, your budget planning efforts are fortified, significantly enhancing the likelihood of securing approval for your initiatives.
Leveraging a well-structured business case allows CMBDOs and other department leaders within law firms to navigate the inherent challenges of budgeting with confidence.
In Part 3 of this series, we will explore the importance of budget review and resource reallocation in your marketing strategy, along with strategies to effectively manage and optimize your marketing budget.