Pivoting to Offense with your Evolving Legal Budget

‍

TLDR: As 2025 nears, Legal Departments are prepping their budget to assist the unlocking of macro-enabled growth, while balancing ongoing regulatory risk and an uptick in litigation.

‍

Approximately 61% of General Counsels expect larger budgets next year, and in-house budgets for Legal Departments and Legal Ops are expected to increase ~3% after widespread cuts in 2024. Alongside an increase in tech and AI-driven tools, many in-house teams are preparing for an avalanche of new product lines to capitalize on blockchain, gaming, and marijuana’s new regulatory openings.

‍

Here are five priority areas to consider when budgeting for 2025:‍

‍

🔥 Matching the Business Team’s Firepower:‍

‍

Global growth is projected to rise 3.2% in 2025. Teams will need to move quickly to take advantage. Be ready for quick, gray-area decisioning. Don’t slow down your business, and consider how to appropriately leverage outside counsel for this purpose while keeping costs in check. Hiring independent experts from platforms like Lawtrades or boutique law firms can reduce heavy, expensive outside counsel spend and can offer a more agile solution – especially when integrated with your business team.‍‍

‍

‍🏯 Fortress: Control Environment Solidifying

‍

Although a less “exciting” portion of a GC’s job, ensuring that your company avoids legal and reputational risks by remaining secure and compliant will be huge in 2025. Regulatory examiners will be guns out when it comes to emerging technology – and will be quick to ding out-of-date policies, stale, failed controls, and customer support foot faults. GCs will want to consider leveraging new AI tools such as Canarie AI to gut-check and review disclosures and policies for compliance. For larger companies, consider bringing in an independent third-party, such as PwC or Deloitte, to run through your current controls and disclosure framework. Having these “oil changes” documented will evidence effort to regulators, while giving businesses confidence that compliance is in check.

‍

👽 Tooling & AI in the Legal Space

‍

The world of legal tracking, contract review, and spend management have improved 10x. Try them. Use them. For example, tracking inbound requests to your Legal team through tools like Streamline AI can build an internal case for increasing budget allocation and headcount, while also justifying your counsel spend. Other emerging tools such as AI-based contract review and legal assistants can improve the overall speed of your Legal Department, particularly in environments where internal resources are limited and efficiency is critical.

‍

🛡️ Shields Up

‍

57% of corporations are increasing litigation spend in 2025. This is based on numerous reasons - including an increasingly complex regulatory environment, employment protection, and the continued rise of class action lawsuits in tech, healthcare, and financial services. To that end, be ready for litigation and reg scrutiny – including performing a market review of insurance limits and bolstering where needed. With insurance, check you have the appropriate policies for the products/services your team is creating. For example, if your company is privacy- and data-centric, ensure your cyber security policy meets the breadth (and value) of data in your coffers.

‍

🔐 Data

‍

On that note, the Data landscape is changing daily in the US. Check that your business understands that as new state and/or federal privacy laws kick into effect, legal budgeting to review and implement privacy will need to run parallel. Allow buffers to keep up with audit frameworks, including ISO and SOC 2. Set aside budgets to account for data breaches and enforcement actions, along with insuring against these black swan events. In the event a breach occurs, your business will need funds for crisis management, legal defense, and penalties. Lastly, consider additional safeguards for your employee base. Companies such as Cloaked can prevent exposures and reduce threat vectors to your business by providing employees identity theft insurance, password management, and breached data deletion tools to reduce threat vectors.