How Legal Teams Can Increase Contract Velocity With Contract Review AI Tools
Contract review is a tedious and error-prone process that exposes companies to risk if not managed appropriately. However, artificial intelligence (AI) can help companies optimize how they review contracts allowing them to organize, analyze, and manage agreements quickly. Contract review AI tools give lawyers the time and tools to perform higher-value work, improving their efficiency.
The headache of contract review
Contract review is the process of identifying and analyzing key clauses in an agreement. Legal professionals read each contract meticulously to understand the agreement’s terms and conditions and determine the agreement’s risk level. This involves going through each contract line by line to determine the implications of each provision.
The contract review process involves:
- Examining important terms and clauses
- Checking termination and renewal rules
- Auditing contract language
- Reviewing default regulations
- Confirming key dates
- Look for blank spaces or missing information
Although contract review is a long and tiring process, necessary because it clarifies each side’s obligations, protects their goals, and ensures that both sides are treated equally.
What are contract review AI tools?
Contract review artificial intelligence (AI) tools are gaining traction among legal departments that deal with a high volume of business contracts because the software significantly streamlines the contracting process while providing improved outcomes. While AI contract review software doesn’t take the human component out of contract analysis, it boosts the human reviewer’s speed and efficiency, reducing the costs and time of contracting.
AI contract review uses machine learning models or algorithms that can be used to refine and organize data more effectively. The software recognizes patterns, extracts critical clauses, and identifies key concepts within the contract repository. Most AI tools include various pre-built models that improve as the software analyzes and reviews more agreements.
The benefits of using AI contract review software
Using AI for contract review provides legal teams with several benefits. Lawyers often lack the tools needed to organize contracts, hindering their ability to identify potential problems and get better deals for their company. Implementing the right AI solution helps legal departments overcome these common contracting obstacles.
With AI legal contract review, your team can easily:
Many lawyers struggle to maintain contract uniformity and identify agreement variations because it usually takes a lot of time and labor to compare and review a pile of contracts manually. AI tools create data reports that highlight variations in provisions, allowing its users to make informed decisions about updating a contract.
For instance, a business may need to include the same penalty provision in thousands of sales contracts. The AI tool quickly identifies the contracts that do not include the provision so that the company can amend or renegotiate those deals.
Companies can use AI review software to identify contract clauses related to changing regulations or ones that don’t abide by a new law. This allows lawyers to quickly remove or alter these provisions so they don’t run into compliance issues.
Contracting tools also track expiring agreements, enabling companies to reduce the risk of lost clients and reputational damage by staying on top of deadlines.
One of the most taxing parts of contract review for legal teams is accounting for the many risks involved in an agreement. However, reducing contractual risks does not have to be a daunting task, thanks to technology. The software marks missing clauses and potential errors, giving users the insight necessary to limit the amount of risk their company takes on in an agreement.
Implementing an AI-based solution frees up a significant chunk of your legal counsel’s time to focus on higher-value work that requires their expertise. It empowers the team to be more responsive to other departments that need help with emerging legal problems, paving the way for the department to be more responsive to the evolving market.
Getting started with contract review software
Contract review AI tools keep legal teams on top of their game even when there’s reduced headcount, tightening budgets, business uncertainty, and distractions. Using an automated contract review platform means the AI does the heavy lifting of contract review. All you have to do is set up your preferences and let the software do its thing.
Implementing AI tools is as easy as using them. Today’s top software providers will have a team of experts set up the program for your company in a short period so you can see results and ROI in the same quarter. With AI taking on the headache of contract review, lawyers can focus on their jobs’ value-driving and strategic components.