Strategies for Achieving Predictability in Legal Spend

Legal Departments continue to navigate an increasingly complex legal and regulatory landscape with expectations to drive operational efficiency, manage costs and demonstrate business value. Stringent cost control and management, while always a consideration, has become a heightened priority in corporate legal operations. According to the 2025 ACC Chief Legal Officers Survey, 41% of CLOs have received cost-cutting mandates. Budget constraints are even tighter in the largest organizations, with 63% of CLOs in companies with revenues exceeding $20 billion reporting budget cuts. 

For many legal departments, achieving financial predictability is an even higher priority than cost cutting. However, establishing and managing budgets, particularly when it involves external counsel, remains a challenge. The most recent Law Department Operations Survey by Blickstein Group in collaboration with FTI Technology found that cost containment and savings/managing the budget is ranked as respondents’ second greatest challenge at 44% — outranked only by implementing business process improvements at 45%.

When economic and regulatory environments are in flux, budgeting and forecasting  allow legal departments to understand spending patterns and anticipate future financial needs. Together, these processes enable a more consistent approach to financial management, allowing departments to adapt strategically to both anticipated and unexpected shifts. Put another way, solid budgets and forecasts enable legal departments to keep a steady handle on the known unknowns, putting them in a better position to pivot as needed.

While legal operations professionals understand the importance of budgeting and forecasting, many struggle to find time to dedicate to financial management oversight. More than 80% of legal operations professionals say they are responsible for financial management, but this is only one of multiple areas they must manage. In fact, most are responsible for 10 or more functions. 

Better budgeting and forecasting

Strategies across process, technology, collaboration and well-defined policies can be deployed to help legal operations professionals and legal departments broadly prioritize proactive cost management, particularly outside counsel spend. The key is identifying the approaches that will best fit the department’s needs and deliver the most optimal results. Effective solutions include: 

• Tools and templates to support budgeting and forecasting procedures. While the level of technology usage by individual organizations varies, standardized processes and automation platforms can increase expense predictability and accountability. These solutions also allow legal operations professionals to spend less time on manual work related to budgeting and forecasting.
• A fit-for-purpose enterprise legal management platform is effective at helping legal operations professionals make sure the right data is being captured, financial processes are automated and detailed reports are available to understand key insights behind expenses and manage spend.
• Analysis of historical matter and spend data to evaluate current state and develop accurate cost forecasts to inform the budgeting process and to identify or optimize alternative fee arrangements.
• Consistent enforcement of outside counsel guidelines. Controls that underpin established guidelines should be put in place, consistently applied and regularly audited. Technology solutions may be used to monitor controls and streamline enforcement.
• Establish a reciprocal relationship with trusted law firms wherever possible. Effective budgeting and forecasting cannot rely solely on billing guidelines and technology; these processes will proceed more smoothly when legal departments and law firms mutually view their relationship as a partnership and communicate regularly and openly.
• Collaboration across all vendors. Just as with law firms, legal departments should collaborate with their vendors on realistic budgets and hold them accountable.

Conclusion

Given that legal departments are a substantial cost center in most organizations, and economic uncertainty generally leads to increased legal activity, general counsel and their teams should take every action possible to mitigate unexpected cost escalation and uncover savings within planned expenses. Legal operations professionals have the tools and knowledge to fully participate in this effort and add a great deal of value around the challenges of budgeting and forecasting. While it is easier said than done given heavy and varied workloads, smarter processes, better collaboration and optimized use of technology can drive progress toward budget and forecasting objectives. 

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The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.