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Legal function least likely to see increased spend: Survey

A new survey of over 200 chief financial officers and finance leaders shows that, of all business functions, legal appears to be the department that fewest leaders plan to allocate increased spend.

user iconJerome Doraisamy 16 August 2022 Corporate Counsel
Legal function least likely to see increased spend: Survey
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Global technological research and consulting firm Gartner has released the findings of a new survey that it conducted last month with more than 200 chief financial officers and finance leaders about the business functions that are most and least likely to face cuts within a year.

The functions that respondents were asked about were: IT, sales, R&D, operations, supply chain, marketing, customer service/support, procurement, finance, HR, real estate and legal.

The functions most likely to see increased spend in the next 12 months were IT (40 per cent of respondents planning to up their spend), sales (31 per cent) and R&D (29 per cent).


However, of the 12 functions listed, legal was the least likely to be identified as a function that will see increased spend, with just 7 per cent of respondents saying they will do this.

Over four in five (81 per cent) of respondents said that the allocated spend for the legal function would remain the same, and 11 per cent said that they would increase spend for the law department.

The departments most likely to see decreased spend in the next 12 months were real estate (35 per cent), finance (22 per cent), operations (20 per cent) and IT (19 per cent).

“Given that 72 per cent of CFOs want to trim their organisation’s real estate footprint by the end of 2022 it’s to be expected that facilities management is looking at budget reductions,” said Gartner finance vice-president Marko Horvat.

“This makes sense for many organisations, where a large share of employees is working from home at least part of the time. However, it’s also interesting to note the 9 per cent of companies that are differentiating by increasing their real estate spending in the next 12 months. 

“CFOs see digital technology as a smart long-term bet, but it’s also a critical part of their plan to tackle the effects of rising inflation on corporate margins,” Mr Horvat continued.

“Nearly a quarter of CFOs think greater automation will help to combat inflation, and this aligns with CEOs who are even more bullish on tech with 85 per cent planning to increase spend over last year.

“The investment in sales and R&D shows that companies are not abandoning their growth bets at the current time, and they are turning to two functions to drive growth in difficult conditions.

“This is broadly consistent with our surveys through May and June where CFOs and CEOs selected these areas as being the most likely to protect from cuts.”

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