8 Signs That Legal Is Blocking Company Revenue Growth

It’s elementary, my dear Watson! It was the Legal department!

Jokes aside, if we analyzed the reasons for missed opportunities and losses in potential revenue, we’d be able to find out how big an impact Legal departments may have. It’s not surprising since there’s always a contract or two at the bottom of every deal.

We’re accustomed to thinking of Legal as a company protector, advisor, and advocate, but nowadays, the role of the Legal department goes beyond these functions. Legal has to take part in financial management, strategic planning, technology implementation, data analytics, and more. No wonder lawyers can directly impact a company’s growth and profitability.

Lawyers are in charge of corporate stability, and they communicate and cooperate a lot with other departments. Yet, their colleagues consider Legal to be a partner whose operations may cause bottlenecks. Why?

Onit’s Enterprise Legal Reputation (ELR) report defines four main reasons.


Many find it hard to approach lawyers, who they see as authority figures. 22% of their colleagues believe the department adds unnecessary red tape, while 61% consider them inefficient and too bureaucratic.


Legal is commonly viewed as an inflexible team. Considering their responsibilities, this perception does have some merit. They establish boundaries to protect their company, and they have to be unwavering. 49% of respondents think Legal creates an inflexible corporate culture. Throw in the lack of accessibility and people start wondering whether they should work with or avoid lawyers (even if it breaks company rules).

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The vast majority of respondents (85%) consider Legal as very or acceptably responsive. For 60%, Legal responds in a matter of days. For 22%, it can take hours. But after the pandemic hit, some challenges were encountered. For companies whose Legal teams work remotely, 38% say Legal is not as responsive as they were prior to COVID. 


As more and more businesses consider switching to work-from-home, they have to consider their Legal team’s transparency. While many believe Legal is transparent regardless of where they work, 2 of 5 respondents (41%) currently view Legal as less transparent when working from home, which makes it more difficult for them to work efficiently.

Now that we know some statistics and reasons why legal operations may prevent organizations from increasing their revenue, it’s time we take a look at what roadblocks they form and how to change it. 

Sometimes other departments bypass Legal processes because of a lawyer’s unresponsiveness and lack of approachability. For example, they may sign the contract without getting Legal’s approval. If the template is old, or lacks necessary updates or important parts, this may lead to breaches and financial losses.

Commercial units want to get the job done, and lawyers have a lot of tasks to process, so we can’t blame either of them for focusing on quickly doing what they have to. The lack of effective communication between departments and unoptimized, repetitive processes prevent lawyers from fulfilling their basic role of company protectors. Thus, data security and privacy suffer, as well as Legal’s contribution to business growth.

How CLM solves the issue 

It’s no wonder that lawyers can sometimes be unresponsive. They have a lot of things to take care of. On top of that, there are requests for simple documentation. While not intensive, such requests take a lot of time and distract Legal from high-value work, making them stay overtime. The best solution is to let commercial units take care of simple tasks by using self-service. Templates get pre-approved by lawyers, so there’s nothing to worry about. It’s simple, fast, and everyone’s happy.

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Many processes need legal review or comments, yet business teams may not really know whom they should approach when they need help with particular contracts. It’s not always clear how to request contract drafting, who’s in charge of each contract stage, which system to use to contact the needed person, and how to remind a lawyer about an overdue contract request.

The same holds true with negotiations. Emails and spreadsheets only slow down the process without providing any clarity. When a contract negotiation journey looks like ‘sales manager → client → sales manager → lawyer → sales manager → client’ (and this is only the first round of edits), it’s not only slow, but it can confuse everyone involved. This may cost the company better terms, better payment conditions, or even put it in danger due to important clauses missing.

How CLM solves the issue 

Efficient software with automated communication, tracking and sharing capabilities, and collaboration features streamlines the negotiation process. Requests will automatically find the right person. Redlining and commenting online in real-time eliminates the need to send emails back and forth, while the ability to assign a certain team member to review a certain clause or paragraph allows lawyers to speed up document checks. In this way, you’ll get rid of outdated processes that obstruct proper communication between internal units.

Sign #3: You pay extra costs for contracting

Contracting costs consist of a lot of things, including the time lawyers spend on the contract (drafting, reviewing, negotiating), the hourly rate of people involved, as well as payments for external advisors when necessary. If you handle documents manually or your software doesn’t do the job, sooner or later you’ll need to hire people, which also requires additional costs.

A lengthy and inefficient process can easily double the price. And it skyrockets in case of unwanted turnover or mistakes in contracts. Manual errors alone cost companies an average of $12.9 million annually.

How CLM solves the issue

CLM accelerates the process, which in turn optimizes legal spend. Instead of growing your headcount, you can automate repetitive tasks. This saves you from spending funds on lawyers for work that doesn’t really require their involvement. 

In addition, standardized language ensures that templates remain compliant. And flexible user control access rights and the ability to track all edits made to contracts provide full control over contracting processes. It minimizes the risk of manual mistakes and extra costs.

Sign #4: You’re unable to find and analyze contracts

It’s essential to keep all of your contracts in a single safe storage where you’re able to track, analyze, report, and quickly find them when needed. If you can’t do that, you don’t control the document workflow. 

Failing to control the workflow ultimately slows down processes and stops you from evaluating agreements, which might lead to missing potential improvements, additional profits, or even losses. For example, statistics show that 26% of lawyers who store contracts in different locations miss at least 1 renewal a year. This could either cause them to lose a favorable contract or to renew an unfavorable contract that could have been renegotiated.

How CLM solves the issue 

By maintaining one centralized location, you can store all of your organization’s contracts. You’ll be able to easily find any information or document you need. It also helps with version control, preventing the issue of having multiple copies or variants of a contract floating around. Too many copies could cause confusion and lead to situations when individuals use outdated versions of an agreement. 

In addition, it provides better visibility, so you can track new and legacy contracts, analyze them, and report or retrieve information for new agreements. The task dashboard with notifications won’t let you miss key dates.

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Sign #5: Reluctance to innovate

Innovations exist to streamline business processes. Nevertheless, people (especially such conservative departments as legal) may be afraid of changes and accept them reluctantly. The problem is that reluctance is a massive drag on sales cycles, and business units say they’re frequently slowed down by lawyers. So, instead of closing one deal and moving to new ones faster, the company loses time and potential revenue.

How CLM solves the issue 

Individuals with a lot of work aren’t usually fond of the idea of spending a lot of time learning new software. And if non-legal units stumble on unclear functions, they’ll go to lawyers, which won’t improve their responsiveness. Fortunately, modern CLM systems have a user-friendly, intuitive interface. Moreover, it can grow, evolve, and scale alongside the department to fulfill all business needs. 

Providers support you during the implementation of new features or when transitioning to the contract lifecycle management system. It smooths and simplifies the process so that all employees can master the tech in hours while getting the answers to all their questions along the way. And many providers also give constant support in case any issues arise.

Sometimes commercial professionals send a contract to the legal department and never know when they’ll get it back. With tons of paperwork, lawyers set this contract somewhere to deal with later, but then never really get around to it. Reality can be cruel as the contract lays forever forgotten. 

Because of the lack of certain tools, business units can never truly be certain about how long the review process should take, how to remind lawyers about contracts, or even whether they can expect approval from the right legal professional. And while they wait, their customers go to another organization.

How CLM solves the issue

Contract lifecycle management solutions allow the drafting of compliant contracts with minimal legal involvement. Questionnaire-based templates provide clients the ability to fill in data by themselves.

If legal review is needed, you send it to a lawyer who will receive a notification. To make the process even faster, you can assign specific clauses for them to check so that they don’t have to review and rewrite the entire agreement. As a result, you get the necessary signature faster and clients don’t undergo a poor customer experience.

Sign #7: Contracts are created only by lawyers

Lawyers are the ones who ensure that a contract is compliant. But if contracts are created only by lawyers, there’s a problem: Since the number of agreements grows with each passing day, you’ll be forced to hire more lawyers to handle the towering skyscrapers of documents. Taking into consideration that the average lawyer’s salary in the US is almost $180k annually, this makes contract maintenance a massive burden on your company’s budget.

But even if you hire more lawyers to create contracts, they won’t be able to remember all the key dates. If you miss renewals or other deadlines, you’ll either have to pay for something you don’t need anymore or you’ll pay a fine for breaching the contract.

How CLM solves the issue

First of all, a CLM system facilitates the transfer of contract creation to business units without any risks. When you use automated workflows, compliance is ensured by the template, not the contract itself. This allows the elimination of legal involvement for simple documents such as NDAs and MSAs. At the same time, the risk of unnecessary renewals and missed deadlines can be dramatically decreased.

Often business units prepare contracts instead of Legal teams. Consequently, Legal doesn’t know what’s in those contracts. Without this knowledge, they can’t properly manage them or their obligations. This may lead to breaches, unfavorable contract terms that can’t be discussed, and missing out on windows of opportunity.

How CLM solves the issue 

CLM helps your Legal teams control everything with minimal involvement by:

  • Providing your employees with pre-approved templates and clause playbooks that can be used to build contracts
  • Validating the required fields and pulling data from databases to repurpose it across departments
  • Using dynamic contract metadata for organizing contracts, searching documents, storage, and data distribution

This keeps all information close at hand, and lawyers know what information is inside contracts. Clause libraries allow them to easily swap clauses in the document in just a few clicks. This helps you review documents faster while ensuring compliance.    

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Final Words

83% of people are dissatisfied with their company’s contracting process. At the same time, 80% of the revenue that flows through deals is governed by contracts. This makes Legal a critical part of business efficiency.

Legal workflow automation can have a positive impact on revenue by accelerating legal processes and negotiations so that you can get the deal signed much faster. It also can improve the level of your customer satisfaction as they won’t feel the pressure of unnecessary bureaucracy. If you’d like to get more information on how CLM can eliminate the roadblocks in your business and discuss the possible ROI, feel free to book our demo

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