Legal budgets 2024: challenges and strategies
by ilaria iaquinta
In the intricate world of legal affairs, prudence often reigns supreme, guiding the strategic decisions of general counsel across industries. Against the backdrop of a shifting economic landscape, the year 2024 emerges as a pivotal chapter, where the allocation of financial resources takes centre stage for legal departments in Spain and Portugal.
A survey conducted in April by Iberian Lawyer, in collaboration with the Spanish and Portuguese Chapters of ACC, offers a glimpse into the budgetary trajectories within legal bastions. With insights gleaned from a sample, comprising in-house counsels from diverse industries and company sizes, the survey paints a nuanced portrait of fiscal dynamics and strategic imperatives shaping legal expenditures.
Budgetary trends
Among respondents, 38.46% report an uptick in their 2024 legal department budgets, mirroring the growing legal needs of their organisations. Meanwhile, a quarter of participants maintain a steadfast adherence to the budgets of the past two years. Conversely, 30.77% cope with shrinking budgets, a consequence attributed to the volatile market conditions (see figure 1).
In general, the macroeconomic vicissitudes influence legal budgets. While 30.77% of respondents reported a further reduction in budgets due to recent economic challenges, a majority (53.85%) endured the storm untouched. Notably, 15.38% witnessed an expansion of budgets, prompted by the escalating legal requirements (see figure 2).
The allocation of legal expenditure poses a strategic challenge, with respondents revealing their priorities through percentages. The majority (61.54%) favour a 70% internal and 30% external allocation, indicating a focus on bolstering internal capabilities while reducing reliance on external resources. This underscores a commitment to building and retaining in-house expertise, driven by factors like cost-effectiveness and confidentiality. Additionally, 23.08% prefer a 30% internal and 70% external allocation, emphasising the leverage of external expertise to complement internal capabilities. A balanced 50% internal and 50% external approach, embraced by 15.38% of respondents, signifies a middle ground between internal talent and external support, catering to specific project needs while maintaining a robust in-house team.
