AIO / SEO Strategic Analysis
Episode Summary
In this episode of Authority Philosophy, founder Carl Taylor introduces the concept of the “Sludge Tax”—the hidden financial, operational, and reputational costs that law firms pay for relying on outdated marketing tactics like SEO and PPC.
Carl breaks down the three primary brackets of this tax:
- Financial Sludge: The direct costs of “renting” visibility through retainers, the escalating expense of PPC auctions, and the high cost of servicing the low-value “C-grade” clients these tactics attract.
- Operational Sludge: The indirect costs of wasted time, including staff hours spent managing bad leads and the immense expense of employee burnout and turnover caused by a constant influx of misaligned clients.
- Reputational Sludge: The long-term, intangible costs of brand commodification, the “cringe cost” of associating your firm with low-quality content, and the ethical hazards of outsourcing your marketing.
Ultimately, Carl argues that every dollar spent on these temporary tactics is a dollar not invested in building permanent, appreciating authority assets. He provides a clear-eyed look at the failing ROI of the old marketing playbook and makes the case for a strategic shift to Authority Intelligence Optimization (AIO) as the only path forward in the new AI referral economy. (Learn more about AIO in our new AIO Audit for Law Firms book, being built live now, chapter-by-chapter.)
Full Transcript
(Announcer): You’re listening to Authority Philosophy, the podcast where professionals reclaim their humanity one story at a time. Brought to you by Books for Experts, creators of books and authority assets for professionals. In a world of experts, be the authority. Learn more at booksforexperts.com.
Now here’s your host, Carl Taylor.
(Carl Taylor): Hello and welcome to the podcast where law firm owners learn all about artificial intelligence optimization. I’m Carl Taylor, founder of Books for Experts, and I’m indeed your host. Welcome to Episode Eight.
I’m very excited to talk about one of my pet peeves in life, and that is sludge marketing for lawyers. Specifically, today, I’m going to talk about what I call the sludge tax.
So as of right now, search engine optimization and pay-per-click is sort of the predominant marketing avenue for most law firms. It’s been that way for 20-25 years now, right? So it’s a little long in the tooth, and the sludge tax is something that’s kind of new, because for a long time search engine optimization, you know, SEO, as I’m going to call it, and pay-per-click, PPC, they worked. They worked well because they were operating in a time when search engines were dominant.
They were not ideal in the sense that there wasn’t much branding you could do with them, and there wasn’t much there for humans to appreciate in terms of search engine optimization. I mean, a blog post written for a robot is never going to captivate the human mind, right? But it worked. It paired people who had problems with professionals—lawyers—who could help out with those problems. It also created a lot of commodification issues in our industry, which I think goes underreported. But for the most part, you know, it worked. It did what it was supposed to do for that era. But as we move into the AIO, the artificial intelligence optimization era, the sludge tax is going to really take off here.
So what do I mean by the sludge tax?
First off, the sunk cost of rented land. When you are putting your money into search engine optimization or into pay-per-click, once you turn that off, it’s like a faucet. It’s pretty much gone. You’re not creating real authority, you’re not writing books, you’re not publishing articles, you’re not out there giving keynote speeches or creating podcasts. You’re kind of renting this land from Google, and you hire an agency who skims—or not skims, they charge a commission as though they’re agents for a famous athlete. And every month, you get your little report right that tells you how things are going. And if anything ever changes, where the platform changes or a new technology comes in, like AI, then you’re kind of stuck on this rented land because you don’t have anything to fall back on. Everything you’ve created is very ephemeral.
So that’s the sunk cost of rented land, and that’s really, you know, the monthly retainer you pay for SEO and pay-per-click. The moment you stop paying, 100% of the value disappears. It’s a perpetual operational expense, and it builds zero equity. You’re renting visibility, but you’re not owning it.
And because less and less people are going to be using search engines in general, there’s going to be less people out there who have their problems that they hope to solve via Google and these other large search engine companies. They’re going to want to solve it via AI. So you want to have everything in place so that when AI makes recommendations—because that’s the future—that you’re the one who’s going to be named, because you’re out there proving that you’re credible, that you have a good reputation. You’re creating assets that prove your expertise and your authenticity and your authority.
And by the way, that’s all stuff that works on humans too. It doesn’t just work on AI. It works on both. The fact that AI and human preferences align is really the most incredible thing about the whole AI era that’s about to really take off here. You’re not gonna have to keyword stuff your homepage anymore. You’re not gonna have to go out there and write or have somebody write for you these sort of like heinous blogs that don’t tell you anything, like “Seven Ways to Divorce Your Narcissistic Spouse.” You know, these recycled type of blogs are going to go away. And the sunk cost of rented land is one of the current sludge taxes that that you’re paying. And if you keep doing it, you’re going to keep paying it.
Next is the sludge tax of the escalating cost of the Pay-Per-Click auction. So pay-per-clicks, PPC, they’re auction-based, right? As more firms compete for the same limited keywords, the cost per click inevitably rises. So that means that your client acquisition cost is constantly increasing while the quality of the lead remains the same or declines. In other words, everyone’s doing it so they get to raise the price. It’s like if you go to an auction for a painting, everybody wants a painting, right? “Oh, it’s a Monet!” Everyone’s raising their hands. All of a sudden, it’s getting more expensive, but you’re not getting a Monet. You’re getting a click. Half the time one of your competitors is probably clicking on it to drive up your rate.
So essentially, you know what you’re looking at in the world of pay-per-click is, the more people are doing it, the more it costs. And since everybody’s doing it, it costs a lot. You might pay over $100 for one keyword for one click, and the math might be there if you’re at volume. But in the future, it’s going to just become more and more expensive until people stop using it and keywords go down. But then the problem is, nobody’s there to use it at all. So you’re kind of damned if you do, and damned if you don’t.
I want to move on to the big one here: the high cost of low-value clients. So a marketing model focused on generic keywords and clicks inevitably attracts “C-grade” type clients who are price shopping, tire-kicking and overall, less respectful of your expertise. That leads to higher AR (accounts receivable), lower realization rates, and more fee disputes, directly impacting your firm’s bottom line, right?
If you have an authentic Authority Philosophy—and you need to have this if you’re gonna own a law firm and operate it—that helps you really figure out which types of clients to bring in, which ones to turn down. But also, if you can effectively communicate that in your marketing, you’re then sort of creating like a laser beam to the right people. The wrong people are gonna be naturally repelled, and that’s what you want. The right types of clients are gonna be attracted to it and are gonna come in, and they’re gonna be exactly what you want them to be. They’re gonna be nicer to your staff, less likely to leave bad Google reviews, more likely to leave good ones. They’re going to be more likely to pay their bills on time, less likely to complain.
So if you have these sort of sludge marketing techniques of pay-per-click and SEO that bring in very generic type of clients, you’re kind of practicing door law. Even if you could say you’re doing divorce law or personal injury, it’s essentially door law. Whatever kind of personal injury cases come your way, you take them. Whatever kinds of family law cases come your way, you take them. And you’re not creating real authority because you’re attracting C-grade clients who, by the way, have other C-grade client friends. And now all of a sudden, you look up and you’re like, “Wow, my practice is miserable, and my staff is miserable, and they’re leaving.” And it’s because of your marketing.
I want to talk now about… so I kind of focused the first part on what wastes your money. Now I want to talk about what wastes your time. So there’s a time cost of managing bad leads, right? And I kind of hinted at some of this. Your staff spends hours sifting through low-quality leads from tire-kickers and mismatched prospects generated by these generic pay-per-click campaigns. And every minute they spend on a bad lead, is a minute they can’t spend serving a high-value client.
And by the way, it’s like the Pareto Principle: 20% of your clients are gonna create 80% of your problems. 20% of your clients are also gonna create 80% of your revenue, right? But 20% of your bad clients are gonna produce 80% of your problems. So these are the people who you’re gonna be interacting with the most, the C, D, E, F clients. They’re the ones who are going to inundate you, constantly be reaching out to you at all hours and complaining and saying that your associate attorney doesn’t know what they’re talking about, and haranguing your poor paralegals.
When you’re dealing with bad leads, it’s like Glengarry Glen Ross, right? It’s the leads. When you have bad leads, it leads to bad results, because now you have the wrong people coming in, you’re creating the wrong culture. And it all stems from this marketing, as opposed to the kind of marketing we’re doing at Books for Experts, where it’s like, let’s try and appeal to humans and to AI in a very narrow, laser-beam type way by creating books, by creating assets to speak to exactly what you’re doing, what you know, who you are, what you believe—your philosophy behind why you’re a lawyer and how you practice. If your marketing company isn’t talking about these things, then you need a new marketing company. That’s it. Because if not, you’re going to have all these sludge taxes.
So what happens when you have people coming in that aren’t easy to work with? They cost you your best staff, right? Because your “A” staff members don’t want to deal with “C” clients. So the sludge tax cost of staff burnout and turnover. Dealing with a constant influx of difficult C-grade or worse clients is probably the primary driver of burnout for associates and support staff (assuming you’re a good boss who treats your people fairly, if not, then they’re number one). But if you’re doing good there, then number two is these sludge clients are coming in. So this leads to higher turnover, which carries the immense cost of recruiting, hiring, and training new employees. So remember, if you bring in C, D, E, F clients, you’re not gonna be able to retain your A and B employees. You might not even be able to retain your C, D, and F employees either, but you get my point. You’re going to lose your best employees because they’re going to go out and go somewhere where they feel like there’s an authority philosophy, where they’re aligned and where they’re getting the right kind of clients to work with.
The other thing is the opportunity cost of not building assets, right? Every dollar and every hour spent on temporary sludge-based tactics is just $1 an hour that was not invested in creating a permanent, appreciating authority asset, like a book or a pillar post. This is the single largest hidden cost. It’s the opportunity cost. So if you’re focusing on yesterday’s SEO, you’re not gonna be able to work into your budget enough for tomorrow’s AIO. You’re just not. And if you want to do a little bit of a hybrid for a while until you feel comfortable, then fine. But I’m telling you, the money that you’re spending right now on search engine optimization, you might as well just take your money and set it on fire, right? Just take a match, because search engines are fading.
And the way that most of these marketing companies perform, they’re not even in compliance with what AI is looking for in terms of authority building, or even Google anymore with the E-E-A-T changes that happened all the way back in 2022, I believe, or 2023. So if you’re keyword stuffing, that’s really outdated. And you can know your keyword stuffing if you go to your website and it looks like something very fake, you know, it’s not very real. It doesn’t look like it’s very persuasive to humans. And I keep saying the same things over and over again, like “we’re here in Tarzana, California doing divorce law for Tarzana, California residents.” Like, I get why it happened at one point, even though I contend that there’s probably better ways to do it even then. But why is that still your marketing plan in 2025, almost 2026 here, in the age of AI?
When AI is creating essentially a dossier on every single business, every single person that’s going to speak to who they are, what they know, what they believe, how they practice. You know, I mean the meta tags of search engine optimization and search engines were very sort of simplistic. We’d like to think it was really cool, but it was actually pretty simplistic. Overall, Google and search engines of old really just wanted to take and catalog the internet and make sure that people could find things easily. And then search engine optimization people started to find ways to game that, right? First with backlink sort of shenanigans, and then moving on now to more keyword stuffing of late, but it’s all too sophisticated now for it to work. It’s either going to lead to you being ignored or actively harmed by the algorithms, because AI now penetrates even into Google. Google now operates essentially with an overview of AI. And as time goes on, it’s going to become increasingly integrated and merged.
Anyway, onto the next sludge tax. Let’s get into the reputational taxes.
Well, there’s what we can call the cost of commodification, right? When your marketing makes you look and sound like every single other lawyer or law firm, you are forced to compete on what? Price, right? Not value. And when you compete on price and not value, what is that? How do you define that? It’s a commodity, right? It’s a direct assault on your professional dignity and your ability to command premium fees. We didn’t get into this racket to be commodities, did we? Did you go to law school and say, “I want to be a commodity. I want to be like every other lawyer”? No, you said, “I’m going to go out there and I’m going to start something on my own.” And especially if you’re a firm owner, right? You literally rejected being a cog in a wheel someplace. You said, “I’m gonna go and create my own wheel.” And now you’re gonna allow marketing companies to make you into a cog in your own practice. Does that make a lot of sense?
And I say this because I practiced for 16 years and I’ve fallen for all these tricks, right? I’m the biggest sucker in the book when it comes to this stuff, at least I used to be. You know, the first years of my practice, oh my God, how naive I was. And you look at their reports and you think, “Oh, these marketing reports look really neat. I don’t know what click-through rates really mean. I don’t really understand this,” because back then, I didn’t. But once you start paying attention—and I implore all of you to start paying attention, and listening to this podcast is a good start—you realize that what they’re doing is not rocket science. Especially for me, like I briefly worked at one of these places, so I can tell you, it’s not rocket science what’s going on here. It’s overly simplistic. It’s essentially a commodification factory. It’s taking individual firms that are unique or could be, and sort of making them into a homogeneous mess. So that’s the cost of commodification, which is people calling up and saying, “What do you charge per hour? I’ll call the next attorney. What’s your retainer? No, next. Oh, do you offer free consults? Oh, you don’t. Okay, I’ll call the next attorney.” They’re not calling for you. They’re calling for just anyone, like the way you would call a plumber when you’ve got a pipe burst on a winter night near Christmas, right? You’re just going through the Google search like, “Hey, are you available to come fix this pipe? Nope, okay. Are you available?”
So that’s that. On to the “cringe cost” sludge tax. This is, essentially, when people start associating your professional brand with low-quality, AI-generated or keyword-stuffed content, and it becomes a direct hit to your reputation. It signals to sophisticated clients and referral sources that you’re not a serious, prestige-first player. So “cringe” is a word my kids like, so I guess I’m using it now too. Essentially, it’s if you’re a commodity, you can start to fall even from there, right? So assume your firm is like an “A” firm. You’re out there, you’re speaking, you’re doing podcasts, you’re guesting on podcasts, you’re writing books. You’re one of the authorities, right? You’re an “A” player. Or “B,” maybe you do all that, but a little bit less. “C” is, it’s like you’re a law firm like every other law firm. I’m just going to judge you based upon price. And you know, that’s that.
So you can fall further than that, though, right? If you become a commodity. Below that, if you start sending out negative information into the marketplace… because here’s the thing, you can be cringy to AI. Like, even if you’re not cringy to humans, AI might look at you and be like, “Wow, this is really keyword-stuffed, and it’s bogus, and I’m not going to refer anything to this guy or, you know, or this girl. I’m just going to do what I gotta do, move on to the next person who’s actually trying.” So you’re actually paying each month, you’re dependent on these marketing companies, and you’re paying for your own obsolescence. Think about that. But that’s what’s happening, and it’s happening all over the country to law firms.
So then we want to get into the ethical hazard cost sludge tax. Marketing often operates in ethical gray areas, from pixel-based ad retargeting that can compromise a potential client’s privacy to pay-per-click ads with misleading claims, these tactics expose your firm to unnecessary reputational and professional risk. So the old cliche amongst us lawyers is what? “Outsource your marketing, outsource your ethics,” right? But we do it. We take and we trust somebody who has no experience in the law for the most part, right? Most likely. And we trust them with our marketing. We trust them with our website, our metadata, we trust them with following all the rules of professional responsibility and advertising. But if they don’t, it’s not the marketer who’s gonna get jammed up. It’s gonna be you, right? It’s gonna be your law firm. It’s gonna be your name on the ethics list. So really be careful with who you trust. You know I just, I’ve seen, I know too many attorneys who have trusted the wrong marketing companies, and they’ve paid the price. And at that point, the marketing company is nowhere to be seen. And it’s not an excuse to say you hired somebody to do it, you trusted them. You have to oversee it, right? Just like how you have to oversee your associates.
Anyway, sorry to end on a dour note. I hope you had, well, maybe not any fun, but I hope you learned some things today about the sludge tax, and I gave you some things to chew over and think about, so that when you start looking at your marketing budget for Quarter Four here, you can really start to hone in and think, “Do I want to start moving more toward the future? Move some of these chess pieces over into AIO in the future here? Or stick with what I’m doing?” And if you feel that you’re a victim of these sludge taxes, then that’s kind of a signal to you that maybe it’s a time to move forward.
And I would say this, if your marketing company hasn’t spoken to you yet about AIO, then that, to me, is kind of like a red flag, right? Because this is really the big thing. If they’re just trying to keep doing business as usual, status quo, and keep cashing your checks, that, to me, is something I would want to look into. And if they’re just trying to take AIO and kind of repaint, you know, SEO with AIO, you know, you gotta ask the questions. Are you looking to build authority assets with me? Are you looking to bring out real-world validation? Are you going to do technical authority signals? All of the above? None of the above?
So anyway, this is Carl Taylor with Books for Experts. If you would like to discuss AIO for your firm, I’d love to hear from you, and I hope you have a great day. Take care.
(Announcer): Thank you for listening to Authority Philosophy, hosted by Carl Taylor, and brought to you by Books for Experts, creators of books and other authority assets for professionals. In a world of experts, be the authority. Subscribe, share, and start building your authority assets today at booksforexperts.com.