A majority of personal injury lawyers are constantly evaluating the most effective ways to grow their practice and increase revenue. Besides focusing on some of the essential marketing tactics in today’s world, such as maintaining a website and writing blog posts, personal injury lawyers are usually looking for additional opportunities to generate more prospective clients. In many cases, the right lead generation company can play a vital role in driving or supplementing these growth efforts. There are many personal injury lead generation services available today, and it is important to learn about the issues that should be considered before making a decision.
How Do Personal Injury Lead Generation Services Work?
Personal injury lead generation services are usually designed around group advertising and Search Engine Marketing. The basic concept is that by leveraging the funds from participating attorneys, lead generation firms can then take out large national and local advertising campaigns to effectively target consumers in need of personal injury lawyers. Typically, lead generation firms have marketing experts that use their expertise to optimize campaigns across advertising mediums such as the internet, mobile and television, which generate personal injury leads via form submissions and telephone calls.
After the leads are generated, there are exclusive and non-exclusive business models used to distribute them to personal injury lawyers. Understanding the firm’s lead distribution model and associated costs are highly important before investing in a lead generation firm.
Exclusive vs. Non-Exclusive Lead Distribution Models
True personal injury lead generation firms have one main purpose: To actively generate prospective clients for personal injury lawyers on a consistent basis. However, lead generation firms have different ways of managing and distributing leads that can significantly impact the follow-up process, costs and return on investment. One of the biggest factors to consider in a lead generation firm is the difference between exclusive and non-exclusive lead distribution.
The non-exclusive lead distribution model is by far the most commonly used model among personal injury lead generation firms. The model is structured to subscribe multiple personal injury lawyers to a particular market area, and then the leads are distributed between all lawyers in that area, usually done so by rotation or competition.
The main advantage of this model typically comes from offering a low cost of entry for personal injury lawyers to subscribe to the basic lead generation service, which generally offers add-on services or higher tiered advertising plans at additional costs. Another advantage to these models is typically associated with the ability to offer shorter-term contracts compared to exclusive lead models.
The main disadvantage to this model is that personal injury lawyers have to share or compete for leads, which can cause difficulties in landing the big cases or driving optimal business growth without spending additional money. Another disadvantage is that basic plans typically start with minimal lead transfer capabilities and do not include value-added features to help lawyers manage and convert leads.
The exclusive lead distribution model is much less common in the personal injury lead generation business. The model is structured so that only one personal injury lawyer is subscribed to a particular market area, and that one subscribing lawyer receives all leads generated in that area for the life of the contract.
The main advantage of this model is that one personal injury lawyer receives every lead and prospective client for which he or she is paying, which allows more opportunities to win a big case lead, or options to develop a lead referral system for excessive or unwanted personal injury leads. The other advantage is that these models typically include additional value-added services to support personal injury lead management and conversion in the standard contract price.
The main disadvantage of this model is that the standard contract typically costs more than a comparative non-exclusive lead generation firm. The other potential disadvantage is that exclusive lead models usually have longer-term contract lengths compared to non-exclusive lead models.
Return on Investment from Personal Injury Lead Generation
A business-savvy personal injury lawyer knows that return on investment (ROI) is the most important factor to consider when evaluating potential lead generation firms. While overall costs are also important to consider, lower cost does not mean much if it results in a low return (or no return) on the investment. So how does a personal injury lawyer calculate the potential ROI from a lead generation firm? It is impossible to predict an exact ROI for lead generation services because there are too many variables, including a personal injury lawyer’s prospective client follow-up practices and typical close rate. However, there are a number of factors to consider that can help provide a good idea of the ROI you can obtain from a particular personal injury lead generation service.
Prospective Client Conversion Rate
A crucial component of ROI is based on an assumption of future conversion rates. The best way to make this assumption is from a lawyer’s historical conversion rate, which is the number of new clients compared to the total number of prospective client leads. Using prior conversion rate data is the ideal method to calculate potential future conversions with a personal injury lead generation firm. It is worth noting that there are several factors that can potentially help increase conversion rates with a lead generation firm, such as phone concierge services, lead management software and personal client success representatives.
Typical Personal Injury Case Fee
Another critical part of ROI is determining an average case fee per new client. Ideally, there are past data available that can be used to generate an average case fee. If not, coming up with a typical range of case settlements is another way to get a general idea. For projection purposes, it is suggested that a personal injury lawyer use the low-end range or another conservative estimate to help provide a realistic expectation on the potential return.
Personal Injury Leads and Related Cost
The final component is coming up with a figure for personal injury leads and the lead generation service cost. This can only be done once a lawyer has spoken to a lead generation firm about the monthly leads and related cost. Again, it is suggested that a lawyer take the low-end estimate to make a conservative calculation on the potential ROI. Once a personal injury lawyer has the above information, they can calculate an estimate of their ROI.
Calculating Personal Injury Leads ROI Estimate
The ROI is more accurately calculated over a longer period of time, which helps lower the chance for statistical improbabilities to occur, such as a one-year period. However, it can also be calculated monthly or other time intervals to get a general idea of the investment payout.
Based on the lead per month number, it is simple to extrapolate it to fit your particular time frame. Take the average client conversion rate and multiply it by the total number of leads that would be received for a particular period of time, which provides the estimated number of clients. Take that number and multiply it by the average case fee, which provides total revenue from the personal injury leads. In order to determine an estimated ROI, the total cost of the lead generation service must be calculated and then subtracted from the total revenue.
Questions to Ask a Personal Injury Lead Generation Firm
If you are a personal injury lawyer reviewing lead generation firms to help grow your practice, be sure to ask the following questions:
- What kind of lead distribution model do they use?
- How do they distribute leads to their subscribing lawyers?
- What features are included with the cost of a standard contract?
- What are the leads per month range and associated cost?
- What is the typical conversion rate range for personal injury lawyers using their service?
- Can you estimate my return on investment when using your service?