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Implementing corporate budgets help you benchmark and control your corporate legal spends with ballpark figures or estimates. Once you operate within a pre-defined budget, you automatically start to question how much certain vendors cost and whether they are earning their keep.
As a general guideline, you can follow these steps to set useful budgets for your in-house legal department:
Analyze similar expenses from previous years
Annual administrative fees (e.g., corporate filing fees) and pre-existing alternative fee arrangements (e.g., flat fees) will stay the same, so it’s quite safe to budget these expenses at the same amounts. For all the other expenses, you can use current and past estimates. This initial budget is meant to serve as a starting point you’ll continue to tweak.
Communicate with people from other departments to spot potential issues that may later affect spends
Some common scenarios that may result inyou paying new feepaymentsinclude new product launches that will need filing of patents, trademarks from the product departments, joint ventures, or partnerships (both internal and external) in marketing and promotion. To avoid being blindsided later on, always inform managers / key resources from other departments to keep you in the loop before committing to any new expenditure that may later need to be borne by your legal ops department.
Talk with external counsel to get estimates for predicted tasks
Ask your vendors / other financial experts what the approximate costs for upcoming matters would look like.
Thus, by analyzing historical data and talking to vendors and stakeholders, you can easily create a budget that accounts for recurring as well as predicted and one-off legal matters.