Professional services
Law Practice Lead Value Calculator
Works what a legal enquiry is worth, which sets what you can pay for one.
Result
This is gross profit, not revenue, and it counts the whole relationship rather than the first job. It assumes the repeat work is real for your business, which is worth checking against your own records before spending against it.
Get a Free Business AuditHow the calculation works
Retention rate times the margin on a typical matter gives a lead's value, with repeat and referral value added over the relationship. The share of that you will spend sets the maximum per lead. The consultation cost on leads that do not retain has to be inside the calculation, since in legal services it is substantial.
What moves the number
- Retention rate from enquiry, which varies hugely by area.
- Margin on the typical matter.
- Consultation and intake time on non-retaining leads.
- Whether the lead source is exclusive.
Where this one goes wrong
Lead value varies by practice area more than almost any other figure in legal services, which makes purchased leads priced on a general basis sometimes a bargain and sometimes a loss. Calculate your own by area rather than accepting the vendor's economics. Shared leads also retain far worse than exclusive ones, since a prospective client contacting several firms is often comparing price, and applying an exclusive retention rate to them overstates their value substantially.
Before you quote
- Calculate lead value by practice area, not blended.
- Apply a lower retention rate to shared leads.
- Include consultation cost on leads that do not retain.
Questions
About this calculator
What is a legal lead worth?
Retention rate times the margin on a typical matter, less the consultation cost of the leads that did not retain. It varies by practice area more than almost any other figure in legal services, so a general benchmark is not useful for a specific decision.
Are shared leads worth buying?
At a much lower price than exclusive ones, because a prospective client contacting several firms is frequently comparing fees. Applying an exclusive retention rate to shared leads overstates their value and leads to paying for matters that lose money.
How do I evaluate a lead vendor?
On cost per retained matter rather than cost per lead, including the consultation time spent on the ones that did not retain. A cheap lead with poor retention can cost more per matter than an expensive lead with good retention.
The formula
lead value = close rate x first matter profit x (1 + repeat matters)
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How to use this calculator
- Share of leads you win (%). Enter your own figure; the page starts at 32%.
- Average first matter fee ($). Enter your own figure; the page starts at $2,600.
- Gross margin (%). Enter your own figure; the page starts at 58%.
- Extra matters over the relationship. Enter your own figure; the page starts at 2.4.
- Share of value you will spend (%). Spending the whole value leaves nothing for the business.
The result updates as you type, so you can try a figure, see what it does to value of one lead, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Share of leads you win | 32% |
| Average first matter fee | $2,600 |
| Gross margin | 58% |
| Extra matters over the relationship | 2.4 |
| Share of value you will spend | 25% |
What comes out
| Result | Value |
|---|---|
| Value of one lead main result | $1,641 |
| From the first matter alone | $482.56 |
| Value of one client | $5,127 |
| Most to pay per lead | $410.18 |
One lead is worth $1,641 in gross profit once the close rate and repeat work are counted. Paying more than $410.18 for one leaves too little behind to be worth doing.
How sensitive the answer is
Holding everything else steady and changing only average first matter fee, this is what happens to value of one lead. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average first matter fee ($) | Value of one lead |
|---|---|
| $1,300 | $820.35 |
| $1,950 | $1,231 |
| $2,600 example above | $1,641 |
| $3,900 | $2,461 |
| $5,200 | $3,281 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Share of leads you win (%)
- A percentage, between 0 and 100, starting at 32%.
- Average first matter fee ($)
- A money amount, starting at $2,600.
- Gross margin (%)
- A percentage, between 0 and 95, starting at 58%.
- Extra matters over the relationship
- A number, between 0 and 50, starting at 2.4.
- Share of value you will spend (%)
- Spending the whole value leaves nothing for the business.
What the results tell you
| Result | What it is |
|---|---|
| Value of one lead | The headline result. A money figure. |
| From the first matter alone | A money figure. |
| Value of one client | A money figure. |
| Most to pay per lead | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.