Legal Leaders, 2025 Budgeting Season Is Here!

I saw this HILARIOUS post by Alex Su the other day and I couldn’t stop laughing!  I immediately remembered the CEO who told me to quit saying that we were “under-resourced,” (that’s you, Stuart Landesberg ).  

I got serious, though, when I realized that the 2025 budgeting season is here.  On top of that, this time of year brings a flurry of other intense activities: strategic planning, comp cycles, performance reviews, the holidays, and those final board meetings crashing into our calendars. That’s just in our work lives.  

Over the years, I've learned a few tricks to get through the budgeting cycle.  While I wish I could be as funny as Alex Su , maybe these knowledge drops will help you get through this hectic season a little easier.

Why an early strategy session sets you up for success

One of the most valuable lessons I've learned is the importance of running an early enterprise strategy and budgeting exercise with your team. Here’s why it works and how to implement it.

The power of an early strategy retreat

Pro Tip:  Turn this into an annual “retreat” with your legal leaders; it’s an investment in their growth and the department's future.  

It’s so easy to use the company-wide budget exercise as a time to push for resources that you’ve been waiting to get all year. Before you do, consider running a preliminary exercise with your legal leaders. Use this retreat to analyze the company's performance against goals, future opportunities and challenges, and asses what other teams will need to meet those headwinds and tailwinds. How can your team can contribute to those efforts?  

This approach does more than prepare you for the formal budgeting process. It’s a valuable learning exercise for your legal leaders. They’ll gain insights into business strategy that go beyond their daily tasks, and it equips them to make stronger, data-driven arguments when budget discussions start. Plus, since members of your team are closer to different parts of the organization, their input will be crucial for identifying various departments' needs.

Conduct department strategic planning: from metrics to storytelling

Pro Tip:  Can’t figure out metrics yet?  Start with storytelling metrics, simple narratives showcasing your team’s wins. 

Strategic planning is more than a formality; it's an opportunity to set your department's direction for the coming year. Begin by asking the same questions you would for the enterprise: How did you perform against your goals? What external factors, like regulatory changes or market trends, will affect your strategy? What resources will you need to contribute brilliantly to the company’s success?

Metrics are essential, but many in-house counsel struggle with defining them effectively. If you're not there yet, that’s okay. Start by developing narratives that tell the story of your department's value. Whether it's a key legal victory, a process improvement, or a risk mitigated, these stories can illustrate your contributions to the company. Make a commitment to metric development, tracking, and refinement as you enter 2025.   

Leverage industry benchmarks for budgeting success

I can spend hours exploring benchmark studies to understand how the industry will approach issues in the future. For example, Axiom's 2025 In-House Legal Budgeting Report offers some insights.

• Prepare for a Budget Increase: The report suggests that legal departments should anticipate budget increases in 2025, with an average increase of 5%.
• Embrace Agile Budgeting: The report highlights that GCs who used a rolling/continuous model in 2024 reported greater budget increases and fewer cuts.
• Prioritize Technology and External Resources: The report indicates that technology and external legal resources, especially in AI-driven tools such as virtual legal assistants and contract review platforms, will be top investment areas in 2025.

Understanding these trends can help guide your department’s budget strategy and prepare you to make a compelling case for investment in areas that align with industry movements.

Engaging in the enterprise planning process

Pro Tip:  Enter these meetings with 2-3 pre-crafted stories that illustrate why your budget requests are vital.  Remember, don’t bring bananas!

Now that you've done this pre-work, you're ready to engage with the broader enterprise budgeting process. You’ll understand where there's alignment for key projects and initiatives, where you can partner with other departments, and where you may need to make concessions. Plus, you’ll have a clear view of the hires, training, and external resources you’ll need. 

Use the power of metric-fueled storytelling to back up your resource requests. You’ll have concrete examples ready to illustrate how additional resources will directly the support the company's objectives.

Building a strong GC-CFO relationship

Pro Tip:  Regular check-ins with your CFO can transform this relationship from one of tension to strategic partnership.

Axiom’s report surprised me, reporting tension between CFOs and GCs, specifically, while nearly half of the GCs surveyed reported having a good or excellent relationship with their CFOs, 77% admitted to experiencing tensions most commonly resulting from the CFO’s focus on cost-cutting and GC’s focus on risk management.  In my experience, the CFO can be one of the CLO’s best allies if you build a solid working relationship. Meet regularly, share your priorities, and collaborate on projects. They may challenge you to be more efficient, but this partnership often leads to more strategic budgeting and resource allocation.

The urgency of preparing now

This type of preparation can feel like a "nice-to-have" that can be postponed in the face of more immediate demands. But trust me, doing this groundwork now will make the entire budgeting season less stressful and more successful. And, it can be a great teaching moment for your team, transforming budgeting from a chore into an opportunity for strategic development.

Your 2025 budgeting checklist

• Run a preliminary enterprise strategy session with your team
• Conduct department-specific strategic planning
• Research industry benchmarks and trends
• Craft 2-3 stories to support your budget requests
• Engage your CFO early and often

How are you preparing for 2025? 

What are your strategies for tackling the 2025 budgeting season? Drop your top tips in the comments! And, tag your colleagues who might be able to drop some knowledge from the budgeting trenches.

🎵 P.S. You've got to have some tunes while you’re working on this.  How about Money, by Pink Floyd?  (Link in the comments).  

 #legalbudgeting #ChiefLegalOfficer #GeneralCounsel #LegalLeaders

🦋  I'm Delida, and I help great lawyers become powerful executives leading their departments to become indispensable assets in the C-suite and boardroom. We do this through organizational rituals that build brilliant teams—whether you’re a team of one or 400, in-house or Big Law. Reach out to schedule a meeting.