Key Takeaway: Leveraging flexible legal talent helps legal departments support the commercial goals of the enterprise. Support from flexible legal talent enables organizations to shorten contracts cycle times, reduce broken deals, and pull revenue into earlier quarters.

Managing risk and controlling costs are the dominant themes in nearly every recent survey of in-house general counsel and legal operations professionals. Given the current political climate, economic uncertainty, and rising cost of outside counsel, this is an understandable and appropriate focus.

However, the importance of the legal department to the commercial speed of an organization is seldom mentioned in legal industry publications and often underappreciated by business leaders. When the capacity of the legal department is limited or overlooked, bottlenecks in the contracting process result, slowing down sales cycles and impacting quarterly results. Recognizing and investing in the legal department’s ability to support business objectives is essential for organizations aiming to compete and grow, particularly in a challenging economy.

Navigating Negotiations

In most business-to-business (B2B) industries, the process of negotiating an agreement with a new client is a meaningful portion of the sales cycle. This process becomes even more challenging when the buyer insists on using its own contract template that does not align with the seller’s offering. As a result, legal teams must spend additional time reviewing, revising, and negotiating terms to ensure compliance and protect the organization’s interests.

Ultimately, this negatively impacts deal velocity and revenue recognition.

The Impact of Flexible Legal Talent

Contract Lifecycle Management (CLM) and stand-alone Generative AI redlining platforms help improve the speed of the legal process, and their impact will increase over time. However, for the foreseeable future, the biggest determinant of the legal department’s impact on commercial speed is the capacity of the team.

Legal leaders are caught between a rock and a hard place. The greater the capacity of the legal department, the greater its cost, and legal departments are under intense pressure to minimize costs. Yet, commercial leaders also want contracts finished yesterday.

Businesses are increasingly funding additional legal resources to get their deals done faster. And, particularly for publicly-traded companies with pressure to deliver quarterly results, it’s easy to understand why. Here’s a hypothetical example:

• ACME is a B2B business selling complex technology and services, such that the typical negotiation time is three months in part due to the capacity of the legal team. That timing could be reduced to two months if the legal team had additional capacity. There are 24 new MSAs signed each quarter.
• If ACME increases the capacity of its legal team in Q4 to reduce the cycle time to two months, it could close six more deals in Q1.

The size and profitability of the incremental deals will determine whether the cost of additional capacity and the strategic value of pulling revenue into an earlier quarter is justified. Even if there’s limited value to pulling revenue into an earlier quarter during the year, for most companies, pulling new client revenue from Q1 into the prior year has significant value.

Another significant benefit of optimizing legal department capacity to accelerate deal velocity is the reduction in lost deals due to “deal fatigue.”

Today’s economic uncertainty makes hiring a challenge. That explains why clients are increasingly turning to flexible talent providers to increase the commercial throughput of their legal departments to accelerate revenue. By increasing legal department capacity with flexible resources, organizations accelerate contracts cycle times and revenue.

Explore how flexible legal talent accelerates deal velocity with Epiq Counsel.

Rebekah Stafford, Vice President, Epiq Counsel

Rebekah Stafford oversees the Epiq Counsel service line. She brings more than 15 years of industry experience to the role, including co-founding Axiom’s Chicago office, launching Axiom’s Houston office and managing Axiom’s Boston office.

Tom Finke, Managing Director, Legal Transformation Services

Tom Finke is a Managing Director at Epiq, where his responsibilities include leading Epiq Counsel and Epiq’s Contracts Review and Analysis services. Tom has more than 20 years of experience in the legal industry, working with legal departments seeking to transform the delivery of services.