Here’s Why Your Legal Dept Holds Up Negotiations

Article by Omid G

The Real Problem Isn’t Legal

Having worked inside countless companies, I’ve seen the same situation play out over and over again:

Procurement teams often think their legal departments are sitting around eating chocolate-covered bon bons instead of reviewing urgent contracts.

Let’s cut to the chase: the problem is not the legal department.
The problem is procurement. Let me explain.

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Legal Is Underfunded – But That’s Just One Piece

Legal departments are considered overhead. That means they’re never sufficiently funded, and that under-resourcing impacts all stakeholders.

But that’s only part of the problem—and one we can work around if we handle other things right.

Let’s keep going.

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Throwing Red-Hot Contracts Over the Fence

Procurement often tosses urgent, high-stakes contracts over the fence to legal, expecting swift approval.

You might ask:
“What else are we supposed to do?”

Here’s what you need to understand: Contracts are risk-shifting vehicles.
And there are two major types of risk:

1. Legal Risk
   Covers potential financial loss, litigation exposure, public relations issues, etc.

   Legal’s focus areas include:

   • Limitation of liability

   • Damages

   • Indemnification

   • Insurance

   • Dispute resolution

   • Intellectual property

   ➤ And guess what? These rarely go wrong. Most procurement professionals go an entire career never needing these clauses.

   So why negotiate them at all?
   Because they’re like seatbelts—you use them 500,000 times in case something happens once.
   They are essential.

2. Commercial Risk
   These relate to supplier performance:

   • What the supplier must deliver

   • Payment tied to performance

   • Remedies for underperformance

   ➤ And these? They go wrong all the time.

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Legal Doesn’t Cover Commercial Risk – That’s Your Job

Here’s the kicker: Legal has almost no training in supplier performance clauses.
And that’s not their fault. It’s not their job.
It’s yours. Entirely.

📌 Read this twice:
The #1 mistake procurement professionals make is assuming that when legal approves a contract, it means it’s a good deal for the business.

Wrong.

Legal reviews the legal terms. But the commercial terms—the ones that go wrong most often—are your responsibility.

And that’s why procurement ends up with:

• Contracts that mitigate risks that never happen

• And completely miss the risks that always happen

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Saving T&Cs for Last = A Recipe for Disaster

Now for the next mistake:
Procurement often saves the contract language for last.

We tell suppliers:
"Let’s finalize the price/warranty/lead time first. We’ll get to T&Cs later."

But here’s what the supplier hears:
"Once I win the business, I can redline the entire contract with no pushback."

📌 Read this twice:
Contract terms saved for last will lead to:

• Endless headaches

• Three times more legal delays

• A flood of redlines

• Lost leverage

Why does the supplier redline more when the contract is saved for last?
Because they can.
You gave them the business before you finalized the risk terms. You incentivized it.

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Procurement Needs Legal Fluency and an SLA

Final mistake:
Procurement is often not legally savvy and lacks a Service Level Agreement (SLA) with the legal department.

That needs to change.

Your fluency in contract law should be like a mechanic’s fluency with a wrench—intuitive and practiced.

Once you’ve built this capability:

• You can negotiate many clauses without needing legal

• You can establish a SLA with legal, defining responsibilities and workflows

Then, when the contract finally reaches legal:

• It will have fewer redlines

• Many issues will already be resolved

• The supplier won’t yet feel they’ve secured the business, because terms were discussed first, not last

• The commercial terms will be solid, and owned by procurement

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Move the Profession Forward

If you want to truly speed up negotiations and build high-performing contracts, you need to:

• Stop blaming legal

• Own the commercial terms

• Get fluent in contract law

• Negotiate terms early, not last

• Build a real SLA with legal

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Now Go Off and Do Something Wonderful

Be your best!
– Omid G.
“THE Godfather of Negotiation Planning” – Intel Corp