Alignment in practice
Practical steps you can take to accelerate progress in three key areas.
M&A
GCs report that the biggest obstacle to accelerating M&A transactions is not market conditions but uncertainty on legal and regulatory requirements. 42% of GCs flagged it as a top three issue, compared to 16% for market conditions.
A significant driver of this is a lack of alignment between boards, corporate development and legal.
Commercial teams typically only engage legal counsel once a deal is all-but-agreed, then expect completion in three weeks. By that point, GCs must rapidly get across complex regulatory terrain, including a growing body of law in financial services, environmental, employment, anti-slavery, anti-money laundering, and anti-bribery, plus specific legislation like the National Security and Investment Act.
The result is a perception that legal issues are the bottleneck, when in reality the commercial phase took months to reach a term sheet. GCs are simply dealing with risk that was already there.
NSIA has materially increased the regulatory burden on mid-market deals. Transactions that previously had virtually no regulatory oversight now require investigation and, potentially, clearances.
The same applies to risk appetite. All deals involve some level of risk, but few boards, commercial and legal teams explicitly discuss these parameters in advance. What issues are likely to arise that could affect the economics of the deal? What can be tolerated? Where are the red lines? Without a conversation in advance, it happens under time pressure, mid-deal, when the cost of getting it wrong is highest and you’re least capable of making a considered choice.
Geopolitics
Businesses are good at spotting geopolitical risk. The harder part is agreeing what to do next.
Structural tension between legal and commercial functions is causing businesses to hesitate on strategic commercial decisions, according to GCs.
40% say it’s slowed supplier oversight, transaction due diligence (31%) and even decisions on whether to exit sanctioned markets (34%).
The legal team’s role in building alignment centres on understanding the business deeply. Knowing its key drivers, territories, and commercial priorities, and translating that understanding into sanctions-specific risk awareness, tools and education calibrated to the level of exposure is key to success.
Sanctions are a top concern, particularly as they now apply to goods as well as services. Even legal advice in certain areas carries specific sanctions risk.
Updating contracts to mitigate this exposure is the area where GCs say they’ve made least headway. 28% of businesses are stuck in the early stages or experiencing delays. Smaller businesses with a turnover of £50 million–£100 million are significantly more likely to be delayed (43%).
A decade ago, when Western sanctions laws were relatively aligned, a basic boilerplate may have been sufficient. Now EU, UK, and US rules diverge, the risk environment is substantially higher, and the law itself can change mid-contract. This often means more complex clauses with a greater emphasis on the operational provisions of the contract. What happens when sanctions risk materialises?
But in reality not every contract requires a comprehensive sanctions overhaul. Better to take a proportionate, risk-based approach, and invest in good contract templates. It forces rigorous and realistic thinking about sanctions issues upfront, and frees up and empower commercial teams to move faster and more fluidly, reducing repeated legal involvement for standard situations.
Digital
When it comes to digital readiness, a lack of alignment is more likely to create headwinds than regulatory uncertainty. Whether it’s adapting operating practices (39%), developing new employee policies (32%), or updating governance standards (30%), around a third of GCs say challenges aligning the organisation on AI is a top three barrier to progress.
This indicates that the EU AI Act and upcoming Digital Omnibus implementation is now baked in. Instead, GCs are struggling to build internal momentum in more nuanced areas that require board-level vision and collective effort.
Board direction is needed to generate internal consensus, but boards can’t give direction without knowing what the business is trying to achieve. This creates a circular dependency that makes it harder for GCs to price risk and align stakeholders.
Negotiating stronger contractual protections with technology and AI providers is the area where GCs report least progress. 31% are in the early stages or facing delays.
As AI matures, many are finding that liability has become a standard negotiating point, requiring specific analysis of exposure rather than generic clauses. As a result, it inevitably takes more time, understanding and cross-functional coordination to settle on the right position.
