2025 Australian In-House Legal Budgeting Report: Optimise Legal Spend
Where are Australian GCs expecting to increase their legal department spend next year? How do they plan to deploy their budget overall, and how often do they revisit that plan? The answers might surprise you.
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What Will I Learn?
Discover how to optimise your legal department's budgeting strategy for 2025 with the latest budgeting insights for GCs*, including:
- Legal department budget increases
- 2024's top budgeting buckets
- What's in store for 2025 spending
- Legal tech and AI investments
- Budgeting models and forecasting
*The 2025 Axiom Australian Legal Department Budget Survey Report was conducted by Wakefield Research, and commissioned by Axiom, among 100 Australian General Counsel at companies with a minimum of $50 million in annual revenue
Legal Department Budgets: Finally Trending Up!
During a year of inflationary pains, global crises, and economic pressures, 90% of Australian GCs suffered budget slashes in 2023, by an average of 10%. But the latest findings show hope: legal departments are now reporting a moderate, yet positive, shift in 2024, as more than a third of GCs reported a budget increase this year, albeit only by 6%. Even better, only 5% saw a decrease, while the majority (57%) saw no change at all.
Most legal leaders (99%) reported that they’ll need to update their current budgeting buckets for legal resources and expertise to account for AI or other emerging risks. This could account for why, in addition to technology (51%), they plan on increasing their investments in legal operations (40%) and flexible legal talent providers (40%). Fortunately, the majority (83%) also anticipate another increase in legal department budgets for 2025.
Australian GCs Anticipate Meaningful ROI from Legal AI and Tech Investments in 2025
Once considered leaders of the department least likely to embrace change, legal leaders now indicate a growing emphasis on technology within legal departments. In 2024, 43% of Australian GCs prioritised technology in their budget allocations.
This trend is expected to continue into 2025, with 99% of GCs acknowledging the need to update their budgeting buckets to address AI and other emerging risks. Technology investments, particularly in AI-powered tools like virtual legal assistants, predictive analytics, and contract review, are anticipated to drive meaningful returns on investment (ROI) in the coming year.
Most GCs Plan to Shift from Current Budgeting Model in 2025
While the majority of legal leaders in Australia reported they currently use the precedent-based budgeting model (PBB) for their legal department, most GCs said they’re considering or actively planning to shift their budgeting model in 2025,if they haven't already. The top reasons for the shift are a desire for greater transparency and accountability, the evolution of legal operations, and because of change in company strategy or piriorities. They also point to greater emphasis on agility and responsiveness.
Even though the PBB model took precedence in 2024, most of the GCs who implemented it are planning to, or have already, shifted their model to become more agile. GCs who had already adopted an agile, rolling/continuous legal budgeting strategy saw larger budget increases in 2024 and largely avoided cuts altogether.
As 2025 approaches, legal departments are gearing up for significant shifts in their financial strategies, driven by emerging challenges and opportunities in technology and compliance.
Legal departments are strategically adjusting their financial plans to capitalize on emerging opportunities in AI, tech, and compliance. Many departments are prioritising smarter budgeting models to manage rising costs while improving efficiency. Learn how these shifts in financial strategy can empower your department to navigate change and maximise value in a rapidly evolving legal landscape.