The traditional model of legal departments managing all contracts is breaking down as organizations recognize that most agreements are signed without revisions, creating unnecessary bottlenecks in standard business processes. Finance teams are emerging as natural contract owners due to their focus on operational efficiency, need for contractual visibility in financial planning and responsibility for the revenue outcomes that contracts ultimately drive. Concord CEO Matt Lhoumeau explores how this shift enables legal professionals to focus on complex matters where their expertise truly adds value while transforming routine contracts from compliance hurdles into business enablers.
Fifteen years ago, I had a revelation that continues to shape my perspective on business today: Contracts aren’t legal documents — they’re business processes.
This wasn’t conventional wisdom back then. Every organization I encountered treated contracts as the exclusive domain of legal departments. Whether you were buying, selling or hiring, the contract had to go through legal first.
Fast forward to today, and the landscape has fundamentally changed. As the CEO of a contract management platform, I’ve witnessed this transformation firsthand. Among our customers, approximately 65% don’t even have a dedicated legal team anymore. They’ve either dramatically reduced their internal legal staff or completely outsourced their legal function.
This shift isn’t happening because legal expertise isn’t valuable; it’s happening because the nature of contracts themselves is changing. And while this transformation has been building for years, recent technological advancements are rapidly accelerating it.
From legal custodians to business enablers
The traditional contract management model positioned the legal department as the custodian of all agreements. Every contract required legal review before execution, creating bottlenecks that slowed business operations and frustrated other departments.
Finance teams had to wait for legal approval before closing important deals. Sales teams watched opportunities slip away as legal teams scrutinized every term. And procurement had to delay critical vendor onboarding while waiting for legal to approve standard agreements.
Many contracts (perhaps most of them) are signed without revisions anyway. This raises an important question: Why are we forcing so many standard agreements through an exhaustive legal review process?
Why finance teams are taking the lead
While contracts are migrating away from legal departments, they aren’t being distributed randomly across organizations. In my experience, one department is increasingly taking ownership: finance.
This makes sense for several reasons:
Financial oversight is already their domain
Finance teams are responsible for the financial health of the organization. They need to understand cash flow, forecast revenues and manage expenses. Contracts contain the legal commitments that drive all these financial outcomes. According to McKinsey, poor contract management and suboptimal terms cause companies to lose as much as 9% of their revenue annually. Finance leaders are uniquely positioned to address this gap.
Process efficiency is a finance priority
Finance departments have long been focused on operational efficiency. Unlike legal teams, which are primarily concerned with risk mitigation, finance wants to reduce bottlenecks and accelerate business processes. Finance teams, with their focus on efficiency and performance, are well-positioned to drive this acceleration.
Finance teams need contract visibility
For a CFO, understanding contractual commitments is critical to financial planning. When are payments due? What terms trigger additional costs? When do renewal opportunities arise? Without visibility into these contractual elements, finance teams are flying blind. By taking ownership of contract management, they gain the insights needed for accurate forecasting and financial management.
The new governance challenge
As contract management shifts from legal to finance and other operational teams, new governance questions emerge:
- Setting clear ownership boundaries: Organizations need to clearly define who owns which aspects of the contract lifecycle. Without clear ownership boundaries, critical contract tasks may fall through the cracks, creating compliance and performance risks.
- Balancing efficiency and risk management: While accelerating contract processes is valuable, organizations must still manage legal and compliance risks. This requires a carefully balanced approach that maintains appropriate legal oversight for complex or high-risk agreements while streamlining routine contracts. SOX compliance and other regulatory frameworks require robust contract controls regardless of which department manages contracts. Organizations must ensure these controls remain effective as ownership shifts.
- Building cross-functional collaboration: Even as finance takes more ownership of contract management, successful execution still requires collaboration across departments. Sales, procurement, operations and (yes) legal all have important perspectives to contribute.
The future of contract management
Looking ahead, I see several important trends emerging in this space:
Contract format transformation
The traditional, text-heavy contract format is increasingly inefficient in a world where most contracts are never negotiated. I believe we’ll see contracts evolve to look more like term sheets — simple tables that clearly state the key business terms without excessive legal language. This evolution will further democratize contract management, making it accessible to business users without legal training.
Department-specific contract ownership
Rather than a one-size-fits-all approach, we’ll see more organizations assign contract ownership based on contract type. Sales contracts might be owned by revenue operations, procurement contracts by purchasing and only complex regulatory agreements by legal. This specialized approach ensures each contract type receives appropriate management from the team most invested in its success.
Contract data as business intelligence
Finance and operations teams will increasingly tap into contract data to drive business decisions, identify optimization opportunities and monitor organizational performance.
The path forward
The shift of contract management from legal to finance and operations represents a fundamental rethinking of what contracts are and how they function within businesses. This isn’t just an organizational change — it’s a strategic opportunity to turn contracts from legal hurdles into business enablers.
For legal professionals, this shift doesn’t diminish their importance — it elevates their role. Rather than spending valuable time on routine contract reviews, they can focus on complex legal matters where their expertise truly adds value. And for finance and operations leaders, this is an opportunity to take a more strategic role in shaping how the organization forms and manages its critical business relationships.
Matt Lhoumeau is the CEO and co-founder of Concord, a provider of contract management solutions. 
