Is Your Law Firm Too Reliant on CMC Referrals?

They knew the cost was significant and would ideally like to reduce it, but they also felt trapped by the arrangement. Cutting back substantially on CMC referrals could mean losing a significant proportion of the new enquiries the firm currently depends upon. Switching the tap off overnight simply wasn’t a realistic commercial option.

This is an extreme example, but it demonstrates the problem with allowing any external source to become responsible for too much of your new business.

CMC Referrals Can Be a Valuable Source of Work

There are obvious reasons law firms use CMCs. Generating enquiries directly takes investment, and building a strong presence on Google doesn’t happen overnight. A CMC may already have the marketing infrastructure and consumer reach required to generate enquiries at scale.

This can be particularly useful when a firm wants to enter a new area of work, increase volumes quickly or supplement an existing pipeline. Purchased leads can also make financial sense when the numbers work. If a firm understands its acquisition cost, conversion rate and average value of an instruction, it can make an informed decision about how much it is prepared to spend acquiring each new client.

We don’t think firms should stop buying leads simply for the sake of generating everything themselves. The more important question is whether the firm has the right balance.

What Happens When You Become Dependent on Them?

The £50,000-a-month example highlights something we think more firms should consider.

If even a relatively small proportion of that budget had been invested consistently in the firm’s own marketing over the previous few years, what position might it be in today?

That doesn’t mean spending £10,000 on SEO one month and expecting CMC leads to be unnecessary the next. Building a reliable source of direct enquiries takes time. SEO, content, PPC, website development and conversion rate optimisation need to be approached properly and consistently.

However, that investment builds something for the firm itself.

A strong website can continue generating enquiries. Content can build authority and visibility over time. SEO can create positions in search results for commercially valuable searches, while PPC can provide another source of immediate enquiries. Improving conversion rates can also help the firm generate more from the traffic it already receives.

Over time, even diverting a relatively small percentage of a substantial CMC budget into developing these channels could reduce the firm’s reliance on purchased referrals considerably.

Instead of asking, “Can we afford to reduce our CMC spend?”, the longer-term question becomes “How do we put ourselves in a position where we can?”

Building Something Your Firm Owns

One of the biggest differences between paying for referrals and investing in your own marketing is what you’re left with afterwards. When you pay for a referral, you’re primarily paying for that opportunity. If you stop paying, the flow of opportunities may stop with it.

Investing in your own online presence is different. You’re developing your website, building search visibility, creating useful content, strengthening your brand and developing a direct route between prospective clients and your firm.

That doesn’t mean it’s free. Good marketing requires investment, and there will always be ongoing costs involved in maintaining and improving performance.

The difference is that you’re gradually building an acquisition channel over which the firm has considerably more control.

For a firm spending tens of thousands of pounds each month acquiring work externally, that distinction becomes particularly important.

The objective doesn’t need to be getting the CMC bill from £50,000 to zero. It might be getting it from £50,000 to £40,000, then £30,000, while replacing that work with direct enquiries generated through the firm’s own marketing.

If the numbers work, that can significantly change the firm’s cost of acquisition over the longer term and, importantly, reduce the risk associated with being dependent on a small number of external lead sources.