Big marketing budgets not always the answer for law firm success

While many firms have concerns about how much marketing budget is required to drive branding success, Trish Carroll writes that the out-performance of two Australian law firms demonstrates that other factors are often in play.

In short:

• This article explains how law firms can limit their marketing budgets if they pour their efforts into relationship building and networks.
• Creating proprietary content and showcasing it on platforms such as LinkedIn can be an invaluable branding tool.
• All marketing campaigns should be monitored to ensure they represent a good return on investment.

How much should I spend on marketing and what works? This is an excellent question.

The answer depends on many variables – your firm’s business strategy, size, services offered, type of clients, years of existence and desired market position. You should also think about whether your firm is a challenger, disruptor, leader, or follower. However, regardless of the variables, your marketing budget should help improve client acquisition and increase firm revenue.

In the spirit of sharing the experiences of others, I have spoken to the founders of two relatively new and vastly different law firms, Buchanan Rees and Hamilton Locke. Both started from scratch about five years ago and are going gangbusters. I would love to say I have had something to do with their success. I have not. I have never advised either of them.

Before delving into the experiences of these two firms, it is worth remembering that marketing is about activities that raise your firm’s visibility and reputation for the purposes of creating brand awareness and name recognition. Importantly, it should also generate enquiries that lead to new clients, more work from existing clients and new sources of referrals.

How much to spend?

There is no right answer about how much to spend on marketing. Some firms allocate a percentage of revenue, for example. Thomson Reuters found that the average law firm marketing spend is about 2% of gross revenue. In my experience, the spend can be anywhere from 2% to 20% because it all comes back to what your firm is trying to achieve.

Marketing budgets in plaintiff law firms, such as Brydens, Carroll & O’Dea, Maurice Blackburn or Shine Lawyers, are higher because they usually rely on multi-channel digital marketing strategies. To understand what this means, read about what Brydens did (https://www.gsquared.com.au/work/brydens-lawyers/). It will help you understand how clearly the relationship between marketing spend and ROI can be measured.

A tale of two firms

Buchanan Rees is a two-partner firm operating in one location (Sydney) and Hamilton Locke is a 66-partner firm with five offices in Australia and one in New Zealand.

Buchanan Rees

Buchanan Rees is a dispute resolution firm focused on complex commercial litigation, disputes and regulatory investigations.

Luke Buchanan and Simone Rees founded Buchanan Rees in 2019. Luke was a partner at Clayton Utz for 13 years before he left to start Buchanan Rees with long-time colleague Simone.  Simone and Luke had worked together at Clayton Utz for more than 10 years.

They wanted to create a specialist firm that offered all the technical excellence of Australia’s leading firms, but with the client service ethos of a boutique. That proposition is the firm’s point of difference. In high-end disputes, there is much at stake and stress levels are high. As Luke says: “None of our clients are in business to litigate, not even those who are plaintiffs.”

The firm makes an art out of understanding their clients, what matters to them, their risk appetite and preferred working style. They combine this insight with supreme legal expertise, commercial nous and tactical genius to deliver results. They are truly invested in achieving the best outcome for their clients. It is personal.

For such a new firm, being recognised by Best Law Firms as Tier 1 in Sydney for Litigation is quite something and picking up Global Law Experts Commercial Litigation Law Firm of the Year in Australia (2023 and 2024), and Corporate INTL Awards Commercial Litigation Law Firm of the Year in Australia (2024) is phenomenal.

The basis of the firm’s success is relationships. Luke spent Buchanan Rees’ first year having coffee with many people he had known at some stage in his career. His reconnecting strategy led to some big work and referrals. Meanwhile, Simone was busy connecting with industry leaders and professional services providers in the accounting, finance and insolvency sectors.

Luke and Simone keep connecting, building and deepening their relationships. They use LinkedIn to communicate in a one-to-many way that keeps their visibility high. They host intimate client and referrer dinners with prestigious and hard-to-get speakers and provide clients with highly tailored CLEs. They use networking groups to expand their networks in a targeted way, and Simone writes valuable content on current legal issues that is leveraged by digital marketing to raise visibility and generate business enquiries.  

The amount Buchanan Rees spends on marketing is quite low. The time Luke and Simone personally invest is high. Effectiveness of their external spend and internal effort is measured based on referrals, relationships renewed/begun, conversion to work and revenue growth.

Remember when the pitch from big firms on complex disputes was the importance of having ‘bench strength’. As a two-partner firm with four other lawyers on staff, Buchanan Rees proves that size in big-end-of-town disputes is not what matters.

Hamilton Locke

Nick Humphrey and Hal Lloyd founded Hamilton Locke in 2018. They are both heavyweight corporate lawyers who, between them, have been partners at Norton Rose, Baker & McKenzie and K&L Gates.

Nick and Hal decided to start a different type of law firm. They put people experience (PX) and client experience (CX) at the firm’s core in a way that eradicates rivalry, fosters collaboration and delivers better results for people and clients.

Everyone at Hamilton Locke is vested in the firm’s success. Everyone is invited to participate in the firm’s employee share ownership plan. The calibre of the firm’s collective legal brain is astronomical – the partners are a who’s who of the best in Australia.

Hamilton Locke is the fastest-growing firm in Australia and currently has 66 partners and 280 people. It has been recognised in the 2024 Client Choice Awards as the Most Innovative Law & Related Services Firm in its category and has received too many other awards to list here.

What’s their secret?

The founders had a clear vision of what they wanted to create – a challenger brand; these brands are disruptors and Hamilton Locke is doing that at pace. When Hamilton Locke was created, so too was Halo Group Holdings (now HPX Group). HPX brings together Hamilton Locke and Source, which provides on-demand legal, HR, governance, risk and compliance services in-house to some of Australia’s largest companies.

Thinking differently is Hamilton Locke’s secret. From a business development and marketing perspective, what they do differently has many facets. Here are two:

• creating and owning several communities and award programs, such as the Australian Growth Company Awards (a massive undertaking with nine categories) and the Australian Technology Scale-Up Awards (11 categories). This is genius and I suspect many of the nominated companies have become Hamilton Locke clients.
• undertaking LinkedIn marketing par excellence enabled by creating proprietary content at a firm and individual level. Nick Humphrey has more than 15,000+ followers on LinkedIn, more by many multiples than most other law firm leaders.

Hamilton Locke retains external support for key growth enablers and efficiency drivers, such as PR, digital advertising, graphic design and document automation. The firm does not allocate a percentage of revenue to marketing; it measures results by that timeless measure of revenue growth.

Things to consider

You can waste a lot of money on marketing if you do not have a clear strategy.

All marketing tactics should be monitored to provide accurate and useful data that helps measure its effectiveness and ROI. With digital marketing, it generates real-time reporting, such as spikes in traffic, views, comments, enquiries generated and, if it is not delivering the expected results, adapt and adjust. It is an ongoing process.

In July 2022, I wrote about three recently created firms, Bicknell Law & Consulting, Forward IP and Fresh Legal Solutions. Like Buchanan Rees and Hamilton Locke, they have crystal-clear strategies and value propositions. All these firms are operating in different market segments, yet they use similar marketing tactics to raise their visibility and generate new business.  

Effective marketing can be a game-changer when it is done well.

Trish Carroll is the principal of Galt Advisory, a business that helps law firms and individual lawyers devise and implement successful marketing and business development strategies. Contact her at trish@galtadvisory.com.au.