Cost Per Signed Case vs Cost Per Lead for Law Firms

What is the difference between cost per lead and cost per signed case?

Cost per lead is what you spend divided by the number of leads. The problem is the word "lead". One supplier may count every click. Another may count every web form. Another may count only a conversation with a person who has a real problem you can help with. Because of this, two firms can report very different costs per lead for the same spend, and neither is wrong. Cost per signed case avoids the argument. It divides the same spend by the number of cases that were actually signed, which is the outcome the firm cares about. It also forces the whole journey into view: the advert, the website, the call, the follow-up and the first meeting. If any part is weak, the figure shows it. A low cost per lead with few signed cases usually points to a problem after the click, such as slow replies or enquiries that do not fit the firm's work.

How do you work out cost per signed case?

The calculation is simple, but it only works if the inputs are honest and consistent. Choose a period long enough to include a reasonable number of signed cases, such as a quarter, and use the same period every time. Start with cost, because that is the part most firms underestimate. Include everything you paid to attract and handle enquiries, not just the ad bill. Then count enquiries and signed cases using definitions you have written down, so that a different person would get the same answer. If your firm takes referrals, repeat instructions and walk-ins as well as marketing enquiries, separate them first, otherwise the figure will blend things that have nothing to do with each other. Then follow the five steps below, and write the result down with the date, the period covered and the definitions you used, so that next quarter's figure is a fair comparison.

Use these steps for one period, such as a quarter.

1. Add up all the marketing cost: ad spend, provider fees, software and any paid directories.
2. Count the enquiries that came from marketing and record how many were real prospects.
3. Count the cases signed from those enquiries.
4. Divide the total cost by the number of signed cases.
5. Compare the answer with the fee income a typical matter brings in.

Do not forget internal time. If you want a fuller picture, add a fair share of staff time spent on enquiries. Keep two versions of the figure: one with only external costs and one with staff time. The external-only figure is easier to track. The fuller one is closer to the truth.

A worked example

These numbers are invented to show the method. They are not benchmarks, and your results will differ.

Suppose a firm spends £6,000 in a quarter on ads, fees and software. It receives 120 enquiries, of which 60 are real prospects. It signs 12 cases.

• Cost per enquiry: £6,000 divided by 120 is £50.
• Cost per real prospect: £6,000 divided by 60 is £100.
• Cost per signed case: £6,000 divided by 12 is £500.

If an average matter brings in £2,000 in fees, the plan has room. If the firm improves its replies and signs 18 cases from the same enquiries, cost per signed case falls to about £333 with no extra spend.

What do you need to track?

You need five records for every enquiry: the date, how it arrived, the source behind it, what happened next and whether a matter was opened and what it was worth. Google explains that conversion measurement lets you track valuable actions such as website sign-ups and phone calls, and that it shows which keywords, ads and campaigns lead to them. For calls, Google describes several ways to count them, including forwarding numbers on your website and importing call outcomes from your own system. It also describes offline conversion imports: when a person clicks an ad and later signs a contract offline, you can upload the result so Google Ads can record it. Google says the click identifier you save with the lead is what makes the match possible. Your case management or CRM system is where the signed case is recorded, so the record has to travel from first contact to there. Our guide on law firm lead tracking explains the set-up.

What mistakes make the figure misleading?

Most errors come from counting the wrong things or counting them inconsistently, and almost all of them make marketing look better or worse than it is. A figure that looks too good can lead you to spend more on something that only works on paper. A figure that looks too bad can lead you to cut something that is quietly bringing in good work. Before you act on any number, check how it was built, who counted it and whether the sample is large enough to trust. Ask whether anything unusual happened in the period, such as a long holiday, a website change, a staffing gap or a large referral that arrived by chance. Then look for these common traps, which come up again and again in firms of every size and in every practice area:

• Mixing sources. Referrals, repeat clients and marketing leads all land in the same pot, so the figure looks better or worse than it is.
• Counting too soon. Some matters take weeks to sign. A quarter's figure may change as late cases come in.
• Ignoring part of the cost. Leaving out software or fees makes marketing look cheaper.
• Using tiny samples. Three signed cases is too few to prove anything.
• Treating all matters alike. A small matter and a large one do not bring in the same fees.

A simple rule helps: write down your definitions of "enquiry", "qualified" and "signed" once, and use them every time. When you change a definition, note the date, so you do not compare unlike figures. Review the numbers monthly and decide on action quarterly, because a single month can mislead.

Is cost per signed case a way to pay suppliers?

No, and for some work it needs care. Measuring cost per signed case is about judging results. It is not the same as agreeing to pay a supplier a fee for every case or lead. For personal injury and related claims, the SRA's guidance on referral fees says that payments made per lead, or that vary with the number of referrals, suggest a referral fee rather than a payment for marketing. It adds that a fixed fee per referred client is likely to include a referral element, and that firms must be able to show that a payment is for a genuine service and is reasonable. The SRA's warning notice on marketing to the public also says firms must be able to show that clients from lead generators were not obtained through unsolicited approaches. So use the metric to check results, and ask your COLP to review any payment structure that links fees to enquiries or clients. This is general information, not legal advice.

Next step

You can try the sum with your own figures in our cost per signed case calculator. If you would like help setting up the tracking behind it, book a free audit and we will review how enquiries are recorded.

For the bigger picture, read about lead generation for law firms, or see how we approach personal injury marketing.