In my decade running Concord, I’ve witnessed a quiet revolution taking place: finance teams are increasingly taking the reins of contract management from legal departments. This shift isn’t just happening because of new technology—it’s a fundamental rethinking of what contracts actually are within an organization. And AI is accelerating this transformation dramatically.
The Shift from Legal to Finance
What’s interesting about AI is that I don’t think it’s fundamentally changing things—it’s just accelerating what we’ve already seen. When I look at the companies we work with today at Concord, about 65-70% of our customers don’t have a legal team anymore.
This isn’t just my observation. Research shows that 40% of organizations don’t have clearly assigned roles when it comes to contract management. The shift is happening because contracts are no longer viewed as primarily legal documents but rather as business processes central to financial operations.
I’ve been saying this for years: a contract is not a legal document. A contract is a business process—actually the most central business process you have in a company. Whether you buy something, sell something, or hire someone, there is always a contract in the middle.
As Bain Capital Ventures reports, CFOs are increasingly adopting AI tools to automate routine tasks. One CFO noted that AI reduced their AP workflow processing time from 20 hours during month-end close to just 2 hours—a 90% reduction in time spent.
Why Finance Teams Are Taking Control
From my conversations with hundreds of finance leaders, I’ve seen this takeover makes strategic sense for several reasons:
1) Financial visibility: CFOs need real-time insights into contractual commitments to build accurate forecasts, especially for cloud resources and other variable expenses.
2) Operational integration: Finance teams, unlike legal, focus on automating workflows and reducing bottlenecks rather than just risk mitigation.
3) Cost optimization: With cloud spending projected to reach enormous numbers, finance needs programmatic access to contract data to manage costs effectively.
Most importantly, finance leaders now have the tools to do what was once impossible without legal expertise. Contract lifecycle management software with AI capabilities can automate complex legal tasks, giving finance the confidence to manage contracts without constant legal oversight.
AI: The Great Equalizer
I believe AI is democratizing access to legal knowledge, enabling finance teams to handle contracts with greater confidence and efficiency. According to ContractSafe statistics, AI can review contracts in just 26 seconds compared to the 92 minutes it takes humans, and AI actually outperformed trained lawyers by 10% in accuracy.
AI gives people access to legal knowledge they didn’t have in the past. Today, you can put your contract in ChatGPT or in Concord AI and immediately get a first review of your contract to understand if there’s really something problematic. A lawyer would have had to do this in the past, but now AI can handle much of this initial analysis.
The 2024 ACC Chief Legal Officers report shows that 45% of Chief Legal Officers will invest in new technology solutions to boost operational efficiency in 2024—the highest since 2021. This surge highlights growing awareness of how streamlined contract management software can supercharge processes and reduce risks.
Financial Insights from Contract Data
One of the most powerful applications I’ve seen of AI in contract management is the ability to extract financial insights that were previously inaccessible or required hours of manual work.
At Concord, we’re helping CFOs to actually start building forecasting, not just based on past expenses, but on their actual contractual commitments. You’ll be able to know exactly what money is coming out per month from your company for the next 10 years based on the contracts that you have.
Research from the International Association for Contract & Commercial Management shows that poor contract management is believed to cause 92% of revenue losses. Using contract analytics software, businesses might save 2% of their total yearly expenditures, according to PWC.
I’ve seen several key financial benefits when finance teams take over contract management:
- Revenue capture: AI identifies missed revenue opportunities by automatically tracking price escalation clauses, renewal dates, and payment terms.
- Cost avoidance: Finance teams can prevent auto-renewals of unwanted services and identify redundant vendor agreements.
- Forecasting accuracy: By analyzing contractual commitments, finance can build more accurate cash flow and expense forecasts.
The Future: Financial Intelligence, Not Legal Documents
The evolution of contracts isn’t stopping with the shift from legal to finance. As AI capabilities grow, I’m seeing the beginning of a more fundamental transformation in how contracts are structured and utilized.
I’ve worked with many lawyers on complex agreements, and typically what you do is create a term sheet—a very simple table that tells you exactly what the terms of the contracts are. That’s what I think contracts are going to look like more and more in the future.
Instead of dense legal documents, contracts will evolve into structured financial data that can be queried, analyzed, and used for predictive modeling. DocuSign’s contract management trends report notes that AI will increasingly transform contracts into financial intelligence tools, providing actionable insights rather than just legal protection.
Getting Started: Finance-Led Contract Management
For finance teams looking to take control of their contract processes, here are practical steps I recommend to begin:
1) Start with high-value contracts: Focus first on vendor agreements with significant financial impact.
2) Implement contract repository software: Establish a centralized digital repository for all contracts.
3) Leverage AI for data extraction: Use AI to automatically extract key financial terms from your contracts.
4) Connect to financial systems: Ensure your contract data feeds into your financial planning and analysis processes.
5) Build cross-functional workflows: Create standardized processes that include appropriate legal review when necessary.
Conclusion
The shift of contract management from legal to finance departments represents a fundamental transformation in how businesses operate. AI isn’t just changing who manages contracts—it’s redefining what contracts are and how they function within organizations.
I believe that in five years, you’ll just ask a question to your system through AI and it will immediately build a report for you. This evolution from contracts as legal documents to contracts as financial intelligence will ultimately make businesses more agile, efficient, and profitable.
For finance leaders ready to embrace this change, the opportunity is clear: take control of your contracts now, leverage AI to extract maximum value, and position your organization for success in a future where contracts are no longer the domain of legal departments but powerful financial assets managed by the office of the CFO.
Matt Lhoumeau is the CEO and co-founder of Concord, a leading provider of AI-powered contract management solutions. With over a decade of experience transforming how businesses manage contracts, Matt helps finance leaders unlock strategic value from their agreements.
