Why your CFO will look at legal differently this year
It’s budget deck season, and GCs might be surprised to see legal’s usual dispensations in them replaced with a stark bar chart. The message is clear: Legal is now being evaluated more like every other unit.
For years, legal has lived (comfortably, if we’re honest) in a category of one inside the business. It operated under different economics, different expectations, and quite frankly, different rules.
But those differences are dwindling, thanks to gen AI. CFOs read headlines and sit through AI demos promising automated efficiencies, faster turnarounds and every enterprise’s favorite word: scale.
All these inputs have the CFO seeing more than systems and savings — they see that legal can be held to the same standards as marketing, sales, product, etc. That black box legal lived in for so long? It’s beginning to crack.
More of how legal operates is measurable, comparable, and repeatable than ever. So finance will apply the same logic it does everywhere else:
- If output scales → cost should flatten
- If tools improve → margins should compress
- If work is repeatable → providers should compete
The knee-jerk reaction from in-house teams may be to entrench. To oppose the new scrutiny. To hold on to how it was.
But this is where I think many legal leaders misread the situation. CFOs aren’t questioning the importance of legal or its unique place in the company. Rather, with AI, they’re questioning why legal shouldn’t be managed with the same discipline as every other function that now runs on software, data, and process.
Legal’s place in the enterprise has always rested on a few powerful notions: that judgment can’t be bought off the shelf, that process doesn’t need to be visible, and that every matter is bespoke in ways outsiders simply can’t appreciate.
But gen AI has made just enough of the machinery visible to trigger a reclassification in the minds of people who control budgets. Gen AI changes how legal is perceived, and perception drives destiny.
Once finance decides legal is like every other department, it stops asking whether to apply pressure and starts asking how quickly it can be done.
The real risk for legal isn’t the rate negotiations or the inevitable “do more with less” conversation. Those are surface-level symptoms. The real inflection point is quieter and more profound. Finance will stop debating legal’s value and start assuming it.
Smart GCs will view this not as an intrusion, but as an opportunity. The legal leaders who will navigate this moment successfully won’t be the ones clinging to outdated notions. They’ll embrace the new reality because it actually empowers them to demonstrate legal’s value with hard data month to month, year over year. Rather than viewed as separate from the business, legal is now an active participant delivering verifiable results just like everyone else.
GCs who play by these new rules and aren’t afraid to show their work will actually find being a bar chart on the budget deck is strategically stronger.
This article first appeared in The Value Standard newsletter. Join the 5,000+ legal leaders who get insights and innovation shaping the legal landscape delivered to their inbox fortnightly. Subscribe today.
