How modern general counsel helps companies grow revenue and develop their business strategy.
In many companies, it is common for the legal department to become involved in business deals only towards the end of the negotiations. Lawyers don’t help close deals. Their job is to identify any problems in the transaction and reduce risk. This can slow down the sales process and delay signing the contract. This may also result in inconsistent agreements with other clients.
“Risk and revenue are always linked. The best general counsel understands where the risk is, where the revenue is, and how to manage revenue intelligently to minimize risk and position the organization to maximize revenue,” says Chuki Obiyodirector of business development at Vedder.
This mindset, Obiyo says, makes the difference between legal frameworks that protect the best interests of the company and those who contribute to its growth.
From professional spending to strategic partner
Obiyo’s perspective comes from a career that includes legal training and business development direction. He understands how to handle potential problems and generate revenue for a business.
He spent years of working with seniors executives across commercial, strategic and legal functions and saw first-hand how contracts are won or lost, based on the contribution of each group. The pattern he identified comes from the fact that different departments have different goals. THE sales team wants to find opportunities and lawyers look for problems. At the moment when the two meet to talk about the agreement, it’s too late. The result may have a negative impact on the business.
“When the legal only comes into play at the end, you slow growth. Early interaction with the legal world means faster and more sustainable agreements,” said Water.
Obiyo suggests bringing in lawyers as advisors early in the process. Organizations will need to rethink how legal departments participate in the process and how to measure their contribution.
Involving lawyers at the end costs more than just inconvenience. This can result in transaction terms that are not consistent and block negotiations. If this happens, companies often end up offering discounts. Companies could give up important things conditions and protections just for signing the agreement, which could weaken negotiations on future agreements when contracts are renewed. This all adds up and can eat into margins, reducing the value of the transaction.
The stakes are higher for private equity-backed companies. A business with stable, predictable revenue, well-organized contracts, and consistent transaction structures is more valuable to buyers. Buyers will analyze risks such as customer loss (churn), possible liability exposure, and pricing consistency and reliability. The way the legal team establishes and manages contracts is not just about making sure they comply with the rules. What they do also impacts the value of the business when it is sold.
Lawyers need to understand how to tailor their legal work to the goals of their business. How contracts are structured, how quickly deals are closed, and how to protect profit margins influence the business revenue and increase the value of the company in the future.
Designing the path to yes
Obiyo believes that companies’ legal team should resolve issues and not automatically say “no.” Lawyers should help transactions move forward.
“The legal department should not just say no. They should strive to get to a yes,” Obiyo says.
Instead of reviewing transactions to approve or reject part of them, the legal team should strive to close deals better. Lawyers must get things done while protecting the business by ensuring the agreement supports the company’s goals.
The legal team can track contracts as they move through the system, monitoring progress through the different stages so they can measure the time it takes for approvals. This way, the legal team can see how their work affects the company’s bottom line, especially revenue.
“That’s how the business generates revenue,” says Obiyo.
Making this change can have a significant impact. In one case, a mid-sized software company required its legal teams to participate in sales pipeline meetings with clients early in the process. The legal team became advisors from the start, and the result was that in six months, lead times for large transactions were reduced by 25%. Additionally, fewer contracts had to be renegotiated at the last minute and the company was able to more accurately predict future sales.
Integrate legal into the commercial rhythm
When the general counsel stays in communication with the sales and finance teams and regularly participates in sales meetings, he or she can spot potential problems before a deal is derailed. By involving the legal team so early, their role can change from simply detecting problems after they occur, to preventing them and helping the sales team.
This This approach helps create shared responsibility between legal departments and sales teams. Lawyers have a clear view of how pricing, customer retention and deal structures work, and sales teams have a better understanding of the risks involved. The legal team ceases to be an obstacle and can offer alternative solutions.
“That’s not the case, we can’t have that clause. In fact, we can’t have that clause, but here are some ways we can achieve the same goal safely,” Obiyo says.
Technology, data and the next evolution of consulting
Obiyo believes that as artificial intelligence and contract automation tools become more advanced, general counsel will be a natural part of the business process from the start. As automated technology reviews contracts and handles routine legal tasks, the legal team will be free to focus on strategy and participate in decision-making.
“Future general counsel will be valued less for spotting problems than for developing go-to-market and growth strategies” Water said.
