2023 Legal Budgeting: Budget Building for a (Potential) Recessionary Economy
This paper covers:
✔ Budgeting Models: PBB, ZBB, and ABB
✔ How Transitioning from Fixed to Flexible Enables GCs to Build the Leg
✔ The Playbook: How to Implement ABB in 2023
✔ Agility-Based Forecasting
✔ The Playbook Part 2: How to Implement ABF in 2023
✔ When to Start: Now
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Legal Budgeting Season
We’re entering every GCs favorite time of year: legal budgeting season.
Well beyond legal, budgeting is the yeoman’s work of any departmental and/or functional leader. It is a lengthy and laborious process with finance-dictated goals for spend optimization that often seem to run counter to the resource needs of your department.
For that reason, it’s no surprise that many of your functional peers prefer the lightest possible budgeting lift: Precedent-Based Budgeting (PBB). Also known in financial nomenclature as incrementalism, PBB takes last year’s budget as the default base and makes incremental changes to prepare the go-forward budget.
But be warned: that’s not what finance chiefs want….at least not this year. According to a recent Wall Street Journal article, many CFOs scouting for efficiencies are implementing Zero-Based Budgeting as they prepare for a possible economic downturn. Unlike PBB, Zero-Based Budgeting (ZBB) is a complex process, requiring managers to build their budgets from zero on an annual basis, justifying each expenditureGet the Whitepaper