A “zero spend” legal budget is not lean or smart. It is the sign of a business that is not running optimally. Best practice is to be realistic about legal resources.
According to Harvard Business Review, chasing cheap bills isn’t a wise strategy. Mere rate cuts are “limited and unsustainable,” they “don’t bring greater visibility [or] control,” and after bruising negotiations or incurred liability “the final bill … may be higher than the client expected.” Instead, HBR urges a planned legal budget that reallocates work to the best-suited providers and builds transparency, predictability, and control—rather than just squeezing rates. They back this with case evidence: flat-fee alliance cut its legal budget year after year even as activity rose—demonstrating that structured legal investment beats “zero spend” thinking.
The article goes on to urge business leaders to aim higher than cost-cutting by assigning legal matters to the best-fit provider, building accountability, and extracting greater value from in-house counsel through earlier deal involvement and proactive risk work. This model turns legal from an after-the-fact cost into a managed, value-aligned function that supports revenue, protects brand equity, and reduces volatility
The Wharton School of Business extends these concepts in Legal Strategy 101: It’s Time for Law Firms to Re-think Their Business Model. The article notes that today’s demand more value from legal service providers by shifting toward retainers and fixed fees so they know costs upfront. The article underscores the importance of embedded counsel with domain expertise, observing that many companies are insourcing multidisciplinary legal teams to manage regulatory and commercial work end to end.
These authorities identify best practice as a combination of disciplined budgeting, deep expertise that matches the company’s business needs, and seamless integration with company culture.
What Does Legal Counsel Cost for a Food Business
In order to establish a budget for legal spend, it’s smart to sample multiple benchmarking authorities and create a benchmark from benchmarks. Start with the Association of Corporate Counsel, a global trade group with more than 45,000 in-house lawyers across 10,000+ organizations in 85 countries. That’s a pretty good sample set that gives its data weight and relevance for operators setting policy. In its 2024 Law Department Management Benchmarking Executive Summary, the organization reported that the median company allocates 0.50% of gross revenue to legal.
KPMG – 2021 Global Legal Department Benchmarking Survey. A global study of companies of all sizes across more than 20 industries, with respondents in Europe, Asia-Pacific, and the Americas; it reports average total legal spend of about 0.259% of revenue.
Thomson Reuters’ Acritas research, a widely cited legal market analyst now part of Thomson Reuters, reports that U.S. companies on average spend roughly 0.4% of revenue on legal.
Wolters & Kluwer put the average spend at about 0.36% of gross revenue.
On the low side is Harbor’s long-running Law Department Survey, used by many Fortune 500 legal teams, reports outside counsel spend at 0.14% of revenue in 2023.
General Counsel Service Plans from the Food Law Firm have delivered industry-tailored, integrated expertise at costs well below those benchmarks, working with companies ranging in size from $125M in annual gross and below. Click the link below for case studies.