Maximizing Revenue and Client Acquisition

Speaker 1 0:00

Are referrals the biggest threat to your law firm ? Most estate and elder law attorneys say that referrals are the lifeblood of their law firm , but is it possible that referrals could actually be the biggest threat to your law firm ? Today , I'm talking about applying the 80-20 rule to your referrals and avoiding the biggest mistake that many estate planning and elder law attorneys make when it comes to driving revenue in your law firm . I'm Jennifer Goddard and you're listening to the Marketing LawCast , where we have real conversations about how you can grow a seven-figure practice you love while building personal wealth and your own financial legacy . One of your biggest challenges in growing your law firm is keeping a handle on client acquisition costs . How much does it cost you to get a new client ? Of course , one way to keep client acquisition costs low is to not acquire any new clients . Now , I know that's not what you want , but you might be surprised at how many lawyers starve their revenue because they don't want to spend any money on getting new clients , or as little as possible . Let me challenge that thinking for a few minutes . When I talk to lawyers who are hyper-focused on keeping their costs down , I usually find that they're relying on referrals for their new business . They have a false belief that referrals are free . Let me bust a myth right now . Referral clients don't come at a zero acquisition cost . Even if you don't spend much money to get a referral , you're probably overlooking a huge expense . The biggest cost in your law firm is the money you're not making .

Speaker 1 1:59

In a healthy estate planning or elder law firm , one that is profitably generating high six figures or more . Referrals account for about 20% of total revenue . That's right , about 20% . When I talk to lawyers who are struggling to get past the $200,000 or $300,000 a year mark , they are the ones who tell me , sometimes very proudly , that 80% of their revenue comes from referrals and they have never spent more than $100 a month on marketing . Yep , I can see that Now . Don't get me wrong . Referrals are great , but referrals are not scalable . You need more than referrals to get to the high six figures and beyond . Referrals don't scale up because they're not reliable . You literally have zero control over when a new referral comes into your firm . And here's another problem you have zero control over who your referral sources send to you and because you're letting someone else pick your clients for you , you lose control over your fee structure If you're living off of referrals .

Speaker 1 3:22

Here's what you're missing out on . Let's say you're bringing in $200,000 a year right now , primarily from professional and client referrals and word of mouth . That doesn't sound too bad , right ? It's about $16,000 and some change a month . I can see why lawyers who are stuck at $16,000 a month worry about spending more than $100 . On anything , 16,000 a month is bare minimum . That's only about four or five new clients every month . It's just enough to keep the lights on pay for computers , hardware , software , professional memberships , after taxes , health insurance and a meager contribution to your retirement plan . That means you're taking home only about 90,000 a year , which definitely means you're living in a struggle city . In fact , according to a bank rate survey just released in July , most Americans say they need about twice that , about $233,000 a year , just to feel financially secure , and about twice that , or about $483,000 a year , to feel rich .

Speaker 1 4:48

So what happens at $90,000 a year ? Well , it's precarious . A big life event like a car accident or an illness or really any big unexpected expense is a potential disaster and you can forget about traveling or paying for your kid's college or for private education or a vacation home or living well in retirement or selling your practice at some point and , you're sure , not creating the kind of generational wealth that you help others build and protect every single day . Here's the other thing what happens if you miss one or two or three clients in any given month ? Now , instead of your $16,000 that met the bills , you're at $7,500 , or $3,500 , and suddenly you're in the red . And how easy is it to miss one client a month ? Let me tell you , even the best of us miss a client now and then . There's not a business person out there who doesn't have a bad day or a bad run , and none of us is immune to the impact of political swings that can crash the economy and just the rumors of change can cause prospects to just really hang on tighter to their wallets . But the successful practice not only has a financial cushion , where missing one or two clients doesn't really rock the boat , but they also have multiple revenue drivers . They are not relying on a handful of financial advisors or the hope of word of mouth to sustain or grow their revenue .

Speaker 1 6:49

If you're doing a million dollars a year and something goes wrong , or a lot of things go wrong , and you lose half your business , sure that's going to hurt , but if you've been doing that million dollars a year for a few years , you've got a cushion . You can write it out . You have time to course correct . That's a luxury you don't have at 200,000 a year . Now let's say you are doing 200,000 dollars a year , primarily from referrals .

Speaker 1 7:21

Here's the beauty of the 80-20 rule . You're currently living off the 20 . You need to go after the 80 . There's a huge upside potential for you . You could get to a million dollars if referrals drive only 20% of your revenue , so how can you get that other 80% ?

Speaker 1 7:44

Well , if you want to break through your revenue struggles and get past the feast or famine that scares the life out of you when times are bad , you have to find more ways to attract great clients who will move quickly and are ready to pay premium fees to solve their problems now . You're going to have to invest more than a hundred dollars a month in marketing . You have to dial in your marketing message so you can attract your best next clients , like I said , those who are ready to move now and are willing to pay a premium fee to fix their problems right now . You're going to find those people where they are looking for you . You'll find them where they are literally searching for the answers to their problems in asking their most trusted source , which is Google .

The Importance of Online Marketing

Speaker 1 8:46

If you don't invest in online marketing , you're not just leaving money on the table . You are cheating yourself , you're cheating your family , you're cheating your future and really , you're cheating the very people who are looking for you , who desperately need your help . They are going online every single day looking for you . There are tons of digital marketing strategies that can help make sure they find you . There are a great website that helps visitors become clients to . Search engine optimization that makes sure you show up when people are looking for you To pay advertising , social media , email marketing , a podcast , webinar marketing . Because I don't know you yet , I don't know which digital marketing strategy will be the best next step for you , but I do know this the 80-20 rule means that if you are relying on referrals , there is a huge revenue opportunity for you and your best next step is to believe it . Thank you , thank you , thank you .