Insights From a Former Mass Tort Advertising Executive

Thank you for the opportunity to share my experiences and some of the pitfalls that face advertising attorneys.

I have been in the business for over twenty years. MCM Services Group was my latest attorney advertising company that I co-founded. At least two other companies were sprung from MCM, including IQ Marketing and CCM. One of them was founded by a former sales manager and partner, and the other by a former salesperson for MCM.

When I first got into the business of buying media and other related services and re-marketing to attorneys, there were few competitors. The internet did not exist, and attorney advertising was frowned upon by State Bar Associations and the old establishment of attorneys.

I believe your attorney advertising billing review company makes sense, because huge markups are still being charged today to attorneys even though there is much more competition in the marketplace and attorney advertising has become commonplace and less risky. Attorneys need to know that they can spend less and get more leads by really looking at media schedules, call center charges, clicks and conversions, etc. This service is filling a need to inform.

While I understand better than anyone that a reasonable profit is only fair, it does not make sense that some of these attorney advertising companies have been known to buy from a traditional agency that is already making 15%, and then mark it up another 15-30% for themselves, and then mark up the call center and creative charges on top of that. The outcome for the advertising attorney is less than ideal.

Think of it this way: You run some ads through an attorney advertising company. They do a $100,000 deal that generates 1000 leads — $100 per lead. Seems like a great response and a fair deal, yes?

Let’s say that instead of charging a fair agency markup of 10-15%, they bought the media for $50,000 and sold it to your firm for $100,000 — a markup of 100%. Suddenly, the deal doesn’t seem as fair.

If the agency was allowed to have their 10-15% markup on the $50k, you would still come out with almost twice as many leads as the first deal — about 1800 leads. Knowing that only about 5% of the raw leads ever settle, we’re talking 50 vs. 90 settled cases in a few years. If they are worth $10,000 in fees per case, these excessive advertising markups did not cost you $42,500 when you were gouged up front — they really cost you $400,000, two years down the road when the cases settle.

The independent research and insight from Legal Media Review is exposing the excessive markups and overcharging that still exist in this niche market. I believe that it will lead to more transparency and better deals for attorneys.

*Mr. Johnson is no longer associated with MCM and makes no representations as to the pricing of their services or those of others mentioned in his interview.