Axiom has published a first look at its 2024 Axiom Australia Legal Department Budget Survey Report, conducted by Wakefield Research, of 100 general counsel Down Under with companies that have a minimum of $50 million in annual revenue.

The survey, conducted between 9 August and 20 August, shows that law departments are – finally – seeing an increase in their budgets, with greater spending capacity still to come.

The findings show that two in five law departments (38 per cent) are reporting increased budgets for 2024, with 6 per cent being the average rise since the previous year. Only 5 per cent of departments have experienced budget cuts this year.

Perhaps more significantly, over four in five (83 per cent) of GCs said they expect their budgets to go up in 2025, with an expected average of 7 per cent increases.

Staff salaries (55 per cent), technology and intellectual property (43 per cent each) were the top buckets reported for a department’s budgetary allocation in 2024, but next year’s anticipated buckets look slightly different – in 2025, GCs expect spending increases in tech (51 per cent), flexible legal talent providers or virtual law firms (40 per cent), and in-house staff (63 per cent).

All but one GC surveyed said they would need to update their budgeting buckets for legal resources and expertise to account for AI and other emerging risks.

In addition to increasing budgets, Axiom wrote, the results reveal that legal leaders are “focusing on emerging technologies and risks, with nearly all GCs planning to update their budgeting models to address artificial intelligence, which requires investment into new legal resources and expertise”.

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Elsewhere, the majority of GCs are planning shifts in their budgeting models: 13 per cent have already done so, 61 per cent are planning to shift, and 23 per cent are considering it.

When asked for their top reasons for considering or already shifting budget models, 38 per cent of GCs cited leadership changes, 39 per cent referenced the evolution of legal ops, and 43 per cent cited a desire for greater transparency and collaboration.

Reflecting on the results, Axiom’s teaser document about the full report outlined: “While many legal leaders anticipate budget increases for their departments next year, nearly all GCs recognise the need to update their budgeting buckets for legal resources and expertise to address AI, emerging risks, and flexible talent requirements.”

“By reallocating resources towards high-calibre, cost-effective legal talent – including talent with legal AI skills and tech experience to support their increased investments – legal departments can better navigate this tricky and risky, but increasingly essential, arena.”