Short answer: A law firm can afford to pay up to what one signed case leaves after case costs, multiplied by the share of leads that sign. Find that number separately for each case type. A $150 lead can be a bargain for a family law matter and a losing deal for a $900 municipal court matter.
A managing partner gets a quote from a lead vendor: $150 per lead. Is that good? Nobody can answer from the number alone, and that includes the vendor. The answer depends on what the case leaves you and how often a lead signs.
Most firms never do that math by case type. They look at one blended cost per lead and judge every practice area against it. That is how a firm ends up overpaying for small matters and underbidding for large ones.
Free tool: The Lead Cost Calculator finds the most you can pay per call, form or message from what a case leaves you and your sign rate. No account needed. Run it once per case type.
Why one blended cost per lead misleads
A lead is a call, form or message. It is not a client. Between the two sit intake, a conflict check, a consultation and a signed retainer. Each case type loses a different share of leads along that path, and each leaves a different amount when it closes.
So the useful question is not "what is a good cost per lead?" It is "what is the most this case type can bear?" Our general guide to how much you can afford to pay for a lead covers the method for any business. This post applies it to a firm with several practice areas.
The math, in three lines
- What a signed case leaves: the fee you collect minus what it costs you to handle the case.
- Your sign rate: leads that became signed clients, divided by leads.
- The most you can pay per lead: line one times line two.
The calculator also gives you a lower target, which holds back the amount you want to keep from each case.
What the Lead Cost Calculator page shows
The tool's own example uses a $1,000 sale, so none of it is legal-specific. It still shows the structure.
| What you enter | Value |
|---|---|
| What a customer pays | $1,000 |
| Job cost per customer | $400 |
| Customers won | 5 |
| Calls, forms or messages | 20 |
| What you want to keep per customer | $300 |
| What you get | Value |
|---|---|
| What you keep per customer after job costs | $600 ($1,000 minus $400) |
| How many contacts end up buying | 25% (5 divided by 20) |
| Most you can pay per contact before the job earns you nothing | $150 ($600 times 25%) |
| Target to pay per contact | $75 ($600 minus $300, times 25%) |
The page explains the result this way:
From the Lead Cost Calculator page: "Aim for $75 or less per contact. That lets you keep the $300 you chose. At $150 per contact, winning the customer would use up everything the job leaves after job costs, with nothing left for rent, taxes or profit."
Notice what the $150 ceiling means. It is not a goal. It is the point where the case earns the firm nothing.
A fictional example: three case types at one firm
Fictional example. Harbor Street Law is made up, and every number below is invented to show the math. They are not benchmarks. Use your own records.
| Case type | Fee collected | Cost to handle | Sign rate | Most you can pay per lead | Target per lead (after keeping an amount) |
|---|---|---|---|---|---|
| Estate planning (flat fee) | $2,500 | $500 | 25% | $500 | $300 (keeping $800 per case) |
| Family law matter | $6,000 | $1,500 | 20% | $900 | $600 (keeping $1,500 per case) |
| Municipal court matter | $900 | $300 | 30% | $180 | $120 (keeping $200 per case) |
Now go back to the $150 vendor quote. For the family law matter, $150 sits well under both the $600 target and the $900 ceiling. For the municipal court matter, $150 is under the $180 ceiling but above the $120 target, so the firm would keep less than it wanted. For both, the numbers decide, not the quote.
Two cautions on reading the table. First, the calculator counts one sale. A fee that arrives in installments, or a contingency fee that arrives at the end of a case, takes longer to come back. The tool's own FAQ says to avoid adding "repeat sales you have not actually seen." The same discipline applies to fees you have not collected yet. Second, what the case leaves is before rent, taxes and other costs. It is not profit.
How to use the calculator for your firm
- Pick one case type. Run the tool once for each practice area you advertise.
- Use collected fees, not quoted fees. Pull the average from closed matters.
- Count your sign rate from one time period. Take signed clients out of total leads for the same months. If intake does not record this, that is your first fix.
- Choose what you want to keep. Leave the box blank if you are unsure. The page says to leave an optional box blank if you do not know, and "Do not enter 0 unless 0 is true."
- Compare the result to what you actually pay, including fees you pay a marketing company. The tool's FAQ confirms the target is a total cost per contact.
What the tool cannot tell you
The page is plain about its limits: "What you keep after job costs is not profit. Rent, taxes and other costs still count." It also says your sign rate and plans are "your own. They are not checked or promised."
It also cannot tell you whether you will get enough leads at your target price, or whether your intake process will sign them. If a lead costs $120 but nobody answers the phone after five o'clock, the math on paper does not match the math in practice. That is the topic of our post on calls that never become customers.
A note on legal advertising rules
Everything above is about budgeting, not about what your ads say. Lawyer advertising is regulated by each state. In New Jersey, RPC 7.1 prohibits false or misleading communications about a lawyer's services, including statements likely to create an unjustified expectation about results. See the rule text in the New Jersey RPC 7.1 listing. Check ad copy and landing pages with your firm's ethics counsel, and do not let a vendor promise results on your behalf.
Questions law firm owners ask
Does the cost per lead include what I pay my marketing company?
It should. The tool's FAQ says the target is a total cost per contact, and that the optional comparison "lets you split ad spend from the fees you include." If you leave management fees out, your real cost per lead is higher than the number in your report.
What if my cases take a year or more to pay?
Run the numbers anyway, then add a second check: how many months pass between the ad dollar leaving and the fee arriving. A case can leave plenty and still strain cash if the fee arrives late. The calculator does not model timing, so treat it as a separate question.
What sign rate should I use if I do not track it?
Do not guess a typical number. Count leads and signed retainers for the same few months, then use the result. If you cannot count them, start tracking before you raise your budget. The tool will not invent a rate for you.
Is a cheaper lead always better?
No. A cheap lead that never signs costs more per client than an expensive lead that does. Compare what each source costs per signed client, not per lead.
Should I use the same number for every practice area?
No. Fees, costs and sign rates differ by case type, so the ceiling does too. That is the point of running the calculator separately for each one.
Run your own numbers before you buy leads
Open the Lead Cost Calculator and run it for your highest-volume case type first. If the result surprises you, bring it to a conversation. We can help you check the sign rate behind it and the cost of the leads you are buying now. Talk with ThinkDMG or read about our PPC advertising services.
