Prioritizing Your Legal Spend

PUBLISHED APRIL 2025

In the past five years, in succession, we have encountered a worldwide public health crisis, soaring inflation, rapidly rising interest rates, fickle consumer demand, the renewal of geopolitical rivalries, the apparent end of globalization as an organizing paradigm, and massive, seesawing changes in public policy, some of which have had enterprise-threatening consequences for some businesses. That’s a lot to contend with, especially all at once.

Given this level of uncertainty, it is easy for business leaders to adopt a hunker-down, scale-it-back approach. In some cir-cumstances, that could indeed be the wisest move. After all, first-movers have an advantage—until they don’t. Business success is often a long game. 

For leaders who are in business for the long haul, budgets are expressions of hope: we invest money in areas that might yield something of value or provide an advantage in the future. During this era of uncertainty, here are three areas that businesses should consider when thinking through how to prioritize legal budgets:

Cybersecurity

Not all businesses have exposure to cyber-related risks—but the number is dwindling into insignificance. Any business with a network connection—that’s practically everyone—can become the target of cybercrime that im-perils operations or results in the theft of proprietary information, including the personal information of customers. That’s why cybersecurity has featured so prominently in recent legislation, particularly at the state level. For covered enterprises, these new laws often have data-breach disclosure requirements, among other things. Lack of compliance can be quite costly. Avoiding these outcomes is worth the cost of compliance.

But, cyber risks also exist outside the criminal context. As last year’s CrowdStrike incident demonstrated, old-fashioned human error comprises a large percentage of cyber mishaps. It is well worth the spend for businesses to have their cyber-insurance policies reviewed and vetted by lawyers who under-stand how different provisions stand up to scrutiny at the point of use and who can advise on how to best layer policies to provide maximum protection.

Supply Chains

If your business exports its products or sources products and components from abroad, then you have exposure to the evolving web of laws and regulations aimed at international trade. While tariffs have dominated the headlines, there has been a sustained policy focus on supply chains, with regulators enforcing export-control violations and pursuing those who attempt to evade or circumvent trade law.

Many businesses do not understand that this effort can involve scrutiny several levels removed from a company’s immediate vendor or customer, digging deep into supply chains to root out violators. Furthermore, many of the applicable laws employ a strict liability standard, meaning that companies can be held liable even in the absence of fore-knowledge or intention. 

For companies with significant cross-border trade, especially with enterprises located in geopolitically sensitive countries or in industries relevant to national security, there is a vital need to employ Know Your Customer protocols to ensure compliance with the law. The onus is squarely on private businesses to remove bad actors from their supply chains. Given the potential penalties and reputational damage for violations, it is well worth the spend to have a law firm kick the tires on your efforts to comply with trade law.

Tax

Even when one discounts the mercurial nature of the current administration, tax law is a playing field on which the goalposts are in constant motion. For those enterprises that rely heavily on tax credits and exemptions, keeping on top of changes to tax law is mission critical; however, there are some developments in the area of tax law that demand attention from all businesses. 

At the top of the list is the Trump administration’s reported desire to shrink the Internal Revenue Service, reducing its employee headcount by half. While such a move would likely reduce the likelihood of being audited—something most businesses might cheer about—it would also make it harder for businesses to interact with the IRS on issues of great importance, such as securing private-letter rulings or removing tax liens. 

If you are contemplating a corporate transaction that hangs on IRS guidance concerning complex or uncertain issues, it could be difficult to get an answer. Business leaders need to ac-count for this uncertainty before making key strategic decisions that involve tax matters and engage tax counsel as early as possible.