Budgeting for Legal Counsel

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 — and then to structure them so the cost is predictable instead of volatile.

According to the 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. The article backs this with case evidence: a flat-fee alliance cut its legal budget year after year even as activity rose, demonstrating that structured legal investment beats “zero spend” thinking. The Wharton School of Business extends these concepts in Legal Strategy 101, noting that businesses increasingly demand more value from legal providers by shifting toward retainers and fixed fees so they know costs upfront — and that many companies are insourcing multidisciplinary legal teams to manage regulatory and commercial work end to end. Together these authorities identify best practice as a combination of disciplined budgeting, deep expertise matched to the company’s needs, and seamless integration with company culture.

To set a budget, it’s smart to sample multiple benchmarking authorities and build a benchmark from benchmarks:

• Association of Corporate Counsel (45,000+ in-house lawyers across 10,000+ organizations in 85 countries) — its 2024 benchmarking summary reports the median company allocates 0.50% of gross revenue to legal.
• KPMG — 2021 Global Legal Department Benchmarking Survey: average total legal spend of about 0.259% of revenue.
• Thomson Reuters (Acritas) — U.S. companies average roughly 0.4% of revenue on legal.
• Wolters Kluwer — average spend about 0.36% of gross revenue.
• Harbor Law Department Survey — outside-counsel spend at 0.14% of revenue in 2023 (the low end).

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 up to $125M in annual gross revenue and below.

Disciplined budgeting only matters if the relationship lasts. We have zero attrition since 2018 among our clients doing $10M+ a year — several have been with us since we launched the subscription. For a worked example of what a multi-year general counsel budget looks like in practice, read our General Counsel look-back case study, which is exactly the budgeting proof behind these numbers.

If you want help turning these benchmarks into a real number for your company, start with a free consultation. Schedule a free meeting → — or compare the Service Plans directly. The Food Law Firm — Foscolo & Diefenbach PLLC. Last reviewed: June 2026.

Jason Foscolo Founder of The Food Law Firm — fractional general counsel for food & beverage businesses nationwide.