Legal teams fight hard over liability caps and indemnities. Then the contract is signed, filed, and quietly stops earning what it should.
Most conversations about contract risk focus on negotiation: the clauses, the redlines, the back-and-forth. But that's rarely where the money goes. It goes after signature. A price escalation nobody applies. A usage cap nobody tracks. An auto-renewal that rolls over at last year's rate. A rebate nobody claims. A scope change that's delivered but never billed. The contract was right; nobody enforced it.
That gap was the subject of a recent In-House Connect CLE webinar on the hidden cost of bad contracts and how revenue leaks through the gaps, sponsored by SpotDraft. Moderated by Sabrina Pervez, Head of GTM EMEA at SpotDraft, the panel brought two complementary views:
The live polls told their own story. Most attendees said they were only "fairly confident" their contracts are billed as written. Finance leads most post-signature checks. And the most common answer on how obligations are tracked today was: not consistently.
Here are seven lessons on closing that gap.
David opened with the session's sharpest line: a contract starts losing value "on the day it's signed." The reason is structural. The people who sell and negotiate a deal are rarely the people who deliver and manage it. The operations team that inherits the contract may not know the business objectives behind it, or how its terms are meant to work together.
Every day that team spends getting up to speed, David argued, is potential value lost. That makes the handover the most critical moment in a contract's life. Capgemini insists on a comprehensive sales-to-delivery handover that keeps the people who sold the deal engaged with the people delivering it.
Richa's team at Capital One treats it the same way, with a defined handoff process and checklist. In her view, value leaks in the gap between the legal deal structure and the day-to-day operational and economic flow. Business teams often have no line of sight into the terms that legal negotiated.
The lesson: treat the handover as part of the deal, not an administrative afterthought. The value negotiated at the table only survives if it's transferred intact to the people who will run the contract.
Revenue rarely disappears in a dramatic dispute. It drains away through routine mechanisms nobody is watching. The panel named the usual suspects.
Auto-renewals and evergreen terms. In regulated industries like financial services, Richa pointed out, auto-renewals don't just roll over at stale commercial rates. They roll over on stale regulatory terms too: outdated data privacy provisions, old incident reporting windows. The result is enterprise risk alongside the commercial loss.
Scope creep. David was candid about the service-provider side. Account managers like to do nice things for clients, and "sure, I can take care of that" is the easiest answer. One favour becomes several resources and then a long-term undocumented scope change. His twist: this "free work" doesn't just cost the supplier. It diverts resources from what the contract was meant to deliver, so both parties lose value.
Misclassification. Richa added a subtler version. Additional work can be billed under the wrong part of an agreement, for example as professional services when it belonged within a standing monthly retainer. Getting the classification right when you amend the contract decides whether you keep paying for something you shouldn't.
The lesson: look for leaks in the boring mechanics, not the headline clauses. Renewals, escalations, rebates, credits and scope changes are where signed value quietly goes missing.
In a typical company, legal drafts the terms, finance bills, and sales owns the relationship. So whose fault is it when a term goes unenforced? "Shared responsibility" is the easy answer, and Sabrina pushed back on it: when everyone owns something, it often falls through the cracks.
Richa's answer was more precise. Responsibility is shared for governance, but execution is separated. Legal drafts the contract and then makes a clean handoff, connecting each provision to the team that must act on it. From there, execution belongs to finance, operations, risk and sales.
The key word is translation. David put it bluntly: legal can talk about indemnities and warranties all day, but operations and finance need to know the value levers. What are the success criteria? Which volume or pricing adjustment mechanisms must the team watch? Richa suggested practical tools: plain-language contract summaries, and schedules and exhibits that a delivery team can digest without parsing indemnity language.
The lesson: legal's post-signature contribution isn't monitoring every invoice. It's turning legalese into an operational brief that the people who execute the contract can actually use.
The panel agreed that most leaks surface far too late: at renewal, in an audit, or in a dispute. Richa observed that nobody really looks under the hood while things are running smoothly. So what can a legal team do next month with no new budget?
David's answer was a regular cadence with finance and operations. It doesn't need to be long, and it doesn't need to cover every contract. A single recurring check-in can span a whole portfolio. The question is simple: we signed this contract with these objectives, so how are we doing against them? He framed it as a time-saver, not an extra burden, calling it the first stage of dispute avoidance.
Richa added two ways to make that cadence productive:
Sabrina's advice from working with many legal teams was the same: don't try to check everything overnight. Start with the highest-value contracts, or those most likely to hide rebates, and expand one contract type at a time.
The lesson: a short, recurring conversation, armed with a one-page summary of each key contract's value levers, will catch more leakage than an annual audit.
Sabrina put a deliberately binary question to the panel: if you could do only one thing first, would you fix ownership or buy a tool? Both panellists chose ownership, and their reasons are worth hearing. They came from opposite starting points: Capgemini runs CLMs with obligation tracking, while Richa's legal team at Capital One doesn't use one directly.
David, who calls himself "an old tech guy," starts with people, process, technology, in that order. Who are the stakeholders? What do they need from a contracting expert? Nearly every function is a stakeholder, from delivery and procurement to information security and data privacy. His baseline: contracts shouldn't live on a salesperson's hard drive, but somewhere everyone who needs them can reach them.
Richa's concern was a CLM "deployed into an organizational vacuum." Dedicated contract managers with clear lines to the right stakeholders, she argued, are far more effective than a tool nobody is accountable for.
Even with a tool, ownership decides the outcome. David admitted that Capgemini's obligation notifications sometimes started to look like spam to stakeholders. The fix was focusing on the most important obligations and making tracking part of governance rather than just reporting. Sabrina said she hears the same fear from almost every team: nobody wants to invest in a tool that ultimately nobody owns.
The lesson: a CLM amplifies the ownership model you already have. Define who acts on which obligations first, and the technology will make them faster. Skip that step, and it will just make the gaps more visible.
For David, the value of a CLM starts with something unglamorous: reliable data. Whether the work is done by people or by generative AI, nothing works without trustworthy contract information. A CLM should provide exactly that, "as long as it's not organized chaos."
He then described how the role is changing, both for CCM and for legal. Yesterday, these teams were doers who drafted contracts. Then they became reviewers, handing out templates and training others to use them. As CLM and AI extend into sales, delivery and operations, they become orchestrators. Legal is the subject-matter expert on the contract, so it has a natural leadership role in making sure the AI capabilities, and the contract data beneath them, actually work.
Richa drew the line where tools stop. A CLM can surface risks and flag a variance, but a person still has to decide what to do about it. Do we ask for a credit? Negotiate a concession? Treat it as a breach? Hold it as leverage for the upcoming renewal? That judgement, and the relationship management behind it, stays with legal and contract management.
The lesson: technology handles detection; humans handle decisions. Legal teams that position themselves as orchestrators of contract data and judgement, rather than reviewers of documents, will shape how their organisations use AI on contracts.
Asked which clause he would audit tomorrow, David went beyond today's usual suspects to one that most organisations aren't watching yet: the cost of AI, or what some now call tokenomics.
For several years, the conversation has focused on how generative AI will change the world, and on its legal issues such as sovereignty and regulation. Now organisations are realising it comes with a bill. David's warning was that most companies aren't budgeted for the economic impact AI will have on their contracts. That impact comes not only from the AI they buy, but from vendors who use AI to deliver services to them.
The pricing indexes and cost levers that will matter in these contracts over the next few years are still unclear. That makes it a priority for legal to study them now, before they become the next stale auto-renewal. His suggested question for finance this month followed from that: how are we budgeting for generative AI next year?
The lesson: revenue leakage isn't a fixed list of clauses. New pricing models create new blind spots, and the legal teams that understand AI economics early will be the ones that catch the next generation of leaks.
Richa described an ambition many in-house teams share: for legal not to be seen as the "deal delay department" or just a cost centre. The post-signature phase is where that reputation can change. A legal team that helps finance claim the SLA credit, catch the missed escalation, or reclassify misbilled work is doing more than managing risk. It's protecting revenue the business already won.
David's advice on winning a CFO's support pointed the same way. Show that you understand the business side of the contract, speak in its value drivers and financial impacts, and track milestones and success criteria alongside operations. Do that, and finance will start pulling legal in proactively rather than only when an invoice is disputed.
The contracts are already signed. The value is already negotiated. The opportunity for legal is to make sure the business actually collects it.
This piece is based on an In-House Connect CLE webinar on revenue leakage in signed contracts, featuring Sabrina Pervez (SpotDraft), Richa Fortuna (Capital One) and David Hirsch (Capgemini).
