Why Legal Teams Won’t Survive in Contract Management

The Bold Prediction

I’ll make a prediction that might sound radical, but becomes obvious when you consider the evidence: within 10 years, companies with fewer than 500 employees won’t need legal teams for contracts. At all.

This isn’t speculation—it’s based on a decade of observations and data from working with thousands of organizations. And while legal professionals might find this unsettling, the shift is already well underway for fundamental reasons that transcend any individual company’s approach.

The Experience That Changed Everything

My perspective on contracts was permanently altered 15 years ago when I was working for France’s second-largest telecom company. The CEO tasked me with reviewing and renegotiating 1,000 vendor contracts to save millions. What should have been straightforward became a six-month odyssey through filing cabinets, followed by months of manual reviews and negotiation.

But here’s what struck me: the process was entirely manual in what was already a multi-billion-dollar company. We had sophisticated software for everything else, yet contracts, which represent the foundation of every business relationship, were trapped in antiquated systems.

That experience led me to found Concord, but more importantly, it revealed something fundamental about contracts that most organizations still haven’t fully grasped: they aren’t legal documents—they’re business processes.

Also read: 6 Ways Technology Is Shaping The Legal Profession

The Current Reality: 90% of Contracts Have Zero Negotiation

Fast-forward to today, and research from Gartner reveals that only about 10% of standard business contracts undergo substantive negotiation. The remaining 90% are signed without changes. This isn’t just happening in simple transactions—it’s occurring across the spectrum of business agreements.

Think about what this means: the primary function legal teams historically provided in contract management—negotiation—is becoming increasingly irrelevant for most business transactions.

When I look at the data from companies using contract lifecycle management software, the pattern is unmistakable. Organizations are moving toward standardized templates, predefined terms, and streamlined processes—all of which reduce the need for case-by-case legal involvement.

The Transfer of Power: From Legal to Finance and Operations

Already, approximately 65% of our mid-market customers don’t have traditional legal teams managing their contracts. Instead, the CFO or operations team owns the process.

This makes perfect sense when you examine the fundamental goals of each department:

• Legal teams optimize for risk minimization, which naturally extends timelines
• Finance teams optimize for speed, efficiency, and data visibility
• Operations teams optimize for process standardization and business velocity

As McKinsey research notes, contract cycle times directly impact revenue recognition and cash flow, areas where CFOs have direct responsibility. When contracts are delayed by lengthy legal reviews, business performance suffers measurably.

AI: The Great Accelerator

What’s changing most dramatically isn’t the desire to move contracts away from legal—it’s the feasibility of doing so. AI is democratizing legal knowledge in ways that were unimaginable even five years ago.

Today, AI-powered contract software can:

1. Automatically identify risky clauses and suggest alternatives
2. Compare agreements against internal playbooks for compliance
3. Extract key terms and obligations with greater accuracy than junior lawyers
4. Populate contract templates with appropriate terms based on business rules

According to Stanford Law School’s CodeX research center, machine learning algorithms can identify key contractual provisions with accuracy rates exceeding 90%, often outperforming junior attorneys.

When I talk with CFOs about their experience with AI in contract management, they consistently report two transformative benefits:

First, dramatically reduced cycle times. According to Forrester Research, organizations using AI-powered contract tools report 50-80% reductions in contract cycle times compared to traditional legal review processes.

Second, enhanced financial visibility. As one CFO explained to me: “For the first time, I can see every financial commitment across the entire business, when it’s coming due, and what our true obligations are—all automatically.”

The Compliance Dimension

Of course, removing legal from the equation doesn’t mean ignoring compliance—quite the opposite. Deloitte’s risk advisory practice reports that organizations with automated contract compliance programs experience 30% fewer compliance incidents than those relying on manual reviews.

When finance teams implement contract compliance management systems, several compliance benefits emerge:

1. Consistent application of standards: Unlike human reviewers who may vary in their interpretations, AI applies rules consistently across all agreements.
2. Proactive obligation tracking: Automated systems continuously monitor contractual obligations, eliminating the “sign and forget” problem that plagues many organizations.
3. Audit trails and accountability: Every action, approval, and change is automatically documented, creating comprehensive audit trails.
4. Regulatory updates: AI systems can automatically flag contracts affected by new regulations, ensuring compliance with changing requirements.

The Organizational Friction Factor

Beyond the measurable efficiency gains, there’s an organizational benefit that’s harder to quantify but equally important: reduced friction.

In traditional contract processes, legal teams often become bottlenecks—not because they want to slow things down, but because their incentives and focus are fundamentally different from business teams. Legal is optimized to prevent risk, while business teams are optimized to create value.

When contracts move from legal to finance and operations, this natural tension diminishes. Contract processes can be designed around business velocity and standardization rather than case-by-case legal analysis.

One operations leader told me: “We were spending more time arguing internally about contract terms than we ever spent negotiating with counterparties. Moving contracts to our operations team eliminated those internal battles.”

Also read: What is Contract Management Software and its Benefits

What Will Replace Legal in Contract Management?

If legal teams won’t be reviewing most contracts within 10 years, what will replace them? I see three key components:

1. Template Engineering: Instead of reviewing contracts individually, legal expertise will shift to designing robust templates and playbooks that can be applied automatically. This leverages legal knowledge at the system level rather than the transaction level.
2. AI-Powered Analytics: Contract analytics software will continuously scan agreements for deviations from standards, unusual terms, or potential compliance issues, escalating only those requiring human attention.
3. Business-Owned Workflows: Finance and operations teams will own streamlined contract processes that integrate directly with financial and operational systems, treating contracts as business data rather than legal documents.

The MIT Sloan Management Review describes this as the “industrialization of knowledge work”—applying standardization, automation, and data science to domains previously considered too complex or nuanced for anything but case-by-case human judgment.

What This Means for Your Organization

If you’re in a mid-market organization today, how should you prepare for this transition? Based on my experience with companies that have successfully made this shift, I recommend three practical steps:

First, analyze your contract portfolio to identify standardization opportunities. Which agreements consistently follow the same pattern? These are prime candidates for template-based automation.

Second, invest in a contract repository that centralizes all agreements and enables AI-powered analysis. Without visibility into your existing contracts, automation efforts will be limited.

Third, establish cross-functional governance between finance, operations, and legal (if applicable). The most successful transitions maintain clear escalation paths for truly complex or unusual agreements that may still require legal review.

Conclusion

The shift away from legal-led contract management isn’t just a change in who owns the process—it reflects a fundamental reconceptualization of what contracts are within organizations. As contracts transform from legal instruments into structured business data, they naturally align with finance and operations teams’ responsibilities.

Within 10 years, companies under 500 employees simply won’t need legal teams for routine contract management. The combination of standardized templates, AI-powered analysis, and business-aligned processes will handle 90% or more of agreements without case-by-case legal intervention.

For organizations that embrace this shift proactively, the benefits extend far beyond cost savings. They’ll recognize revenue faster, respond more nimbly to market changes, and eliminate significant internal friction between legal and business teams.

The legal profession won’t disappear, of course. Legal expertise will simply shift upstream, focusing on system design rather than transaction processing—a transformation we’ve already seen in functions like manufacturing, IT, and accounting.

But for day-to-day contract management? The future belongs to finance and operations teams, empowered by intelligent automation.