A lot of conversations I have with CEOs come back to the cost of legal. One told me recently that “you just have to live with the fact that it’s eye-wateringly expensive”.
But the real issue isn’t the cost of the things you know about. It’s what sits just out of view.
I was chatting recently to an old friend, who’s just stepped down from being CEO of a fast-growing food business. Inevitably – being a lawyer – I asked about his experience and what his biggest legal challenges were.
“There are certain areas where you know you need help – fundraising, employee share schemes, transactional work. And you just have to live with the fact that getting good advice is eye-wateringly expensive”.
The cost is not the real issue. They expected it. What struck me was the matter-of-fact, tacit acceptance – this is just how it works, these are the things you spend money on, and there isn’t any other way to approach it.
You don’t know what you don’t know
The issue is not that CEOs and CFOs can’t manage legal. Experienced professionals operating at that level all have a good handle on what’s needed: they can read a contract, understand risks and challenge advice.
The harder part is knowing what you haven’t seen.
These issues don’t always show up clearly at the point decisions are made. They sit in the background, building over time. Its only later, when something surfaces, that you realise what’s happened and what it’s going to cost to fix.
Where the gaps show up
Often, they don’t feel like risks at all, just business friction that takes up a disproportionate amount of time and energy. Take sales negotiations. If the team is repeatedly seeking approval of amendments to your standard terms, it’s usually a sign something isn’t quite right. The template no longer reflects how the business actually operates.
What about the beautifully drafted policy that lives in a drawer and hasn’t been translated into real operational processes? Data protection is a good example. Under GDPR, most organisations need to keep records of how they process personal data. Yet often, assessments are done and records created as a one-time exercise. When the business needs change, or the marketing team has a great new idea about how to make use of all the customer data you are holding, is there a process in place to make sure you are compliant?
Having a policy is not the same as applying it in every day business decisions.
And lastly, how do you decide whether what you’ve just found out is a real risk that needs advice, or whether it’s something you could make a judgement call on?
Like in this kind of situation: some years ago a colleague of mine, whose role was to manage data licensed from third parties, discovered that the company was in quite significant breach of a critical license agreement. The vendor wasn’t aware – and my colleague was unsure whether or not we should own up.
How you handle a scenario like that isn’t simply a legal or ethics question – it depends on the relationship between the parties, the nature of the breach, the business impact and potential costs. You can do the right thing and manage the fallout, if you do it carefully. That’s where judgement and experience matters.
The moment you realise it
The risk that you don’t know what you don’t know doesn’t sit still. It grows as the business does.
If the board asks “what are our top three risks?” can you genuinely answer it? Or do you scramble to gather information from across the business (contracts, suppliers, regulatory issues) trying to piece together a position that no one has really had to articulate before?
By that point, you’re not looking at a contained issue. You’re trying to unpick months of decisions across the business, without a clear picture of what’s been done or where the risks sit. If legal only gets pulled in at that point, the advice will be detailed, cautious and expensive.
And the decisions still sit with you.
Earlier changes everything
Most businesses only bring legal in at the point something needs fixing. By then, the scope is bigger, the advice is more cautious, and the cost is higher.
The difference is not more legal advice. It’s having someone in the room early enough to shape the thinking. Someone who understands how the business actually operates. Who spots where something small is starting to repeat. Who asks the question that stops a small gap becoming a major risk.
The sorts of questions I often ask are these:
“You own the policy. What processes and checks are in place so that you can be comfortable it’s being followed?” “What’s the one thing that could jeopardise this project, and what are you doing to prevent it?”
Not to slow things down, but to make sure the answer exists before it matters.
What changes over time
What changes over time is consistency. Fewer surprises, and a much clearer sense of where external legal support actually adds value.
There’s also a practical benefit that’s often overlooked: having someone on your side who knows how to buy legal services properly. Someone who can narrow the brief to what really matters, challenge scope before it expands, and structure fees around the outcome you actually need.
So when legal support is needed, it’s targeted, controlled, and proportionate.
The real cost
The real cost isn’t the advice you pay for, but the decisions you make before you get it. In many growing businesses, that perspective simply isn’t in the room day to day.
And dedicating your legal budget only to what you can see comes at a much bigger cost.
For some, that’s a trade-off they’re comfortable with. For others, it’s the point where managing things reactively stops working.
A different way to approach it
If you’ve ever found yourself wondering whether you’re seeing the full picture on legal risk, it’s probably worth a conversation.
Rethink Legal works with CEOs and CFOs in exactly this position, bringing a senior legal perspective into the business on a fractional basis. No big commitment. Often just enough to sense-check how things are working today and where the gaps might be.
Explore our Fractional General Counsel services
