With AI, Human Judgment is Non-Negotiable
Every minute counts when a contract delays a deal. In a world where deals are lost over days, not months, legal teams are turning to AI to keep up.
More than three hours. That’s how long legal and business teams spend, on average, manually reviewing a single contract. Multiply that by hundreds—or even thousands—of contracts per year, and it’s no surprise that legal teams are searching for tools to lighten their load. In the past year, AI contract review software adoption has jumped 75%, from 8% to 14%.
Three primary reasons are driving this adoption:
- High contract volumes are overwhelming teams.
- Delays in turnaround time are leading to missed or lost deals.
- AI tools have become more sophisticated, accessible, and ready for legal tasks.
When dealing with a large volume of contracts, speed becomes critical. Long review cycles cause fatigue among vendors or partners and may derail deals. Legal professionals spend too much time redlining and nitpicking line by line, leaving little time to focus on high-value, strategic initiatives.
As AI becomes more common in contract review and negotiation, the key question is:
What can be safely delegated to AI, and what still requires human judgment? We tackled this subject in our recent webinar with the World Commerce and Contracting Association (WCC), where Daniel Lewis, CEO of LegalOn, and Bari A. Williams, Head of Legal at LegalOn, discussed how AI and human expertise complement one another in contract review.
“The time it takes to execute a contract could mean the difference between revenue generation and revenue flying out of the door.” — Bari A. Williams
AI Assists, but Humans Lead
The purpose of AI in legal work is to free teams up to focus on work that only humans can do. AI is great at handling routine and rule-based tasks. But when it comes to judgment, business alignment, or strategic negotiation, nothing can replace human expertise.
For example, deciding what to negotiate in a contract isn’t a purely legal or mechanical choice. It requires weighing business priorities, understanding the risk appetite of your organization, assessing the relationship with the counterparty, and knowing when to push and when to concede. These are strategic calls best made by experienced legal and contract professionals.
Here’s what humans can do that AI can’t:
- Business and legal judgment: Know when to stand firm, when to compromise, and how to balance risk.
- Strategic guidance: Shape negotiation strategies based on deal context, priorities, and desired outcomes.
- Relationship management: Communicate decisions, resolve tension, and build trust with counterparties and internal stakeholders.
AI is powerful—but it’s not perfect. It doesn’t work off the bat. It’s not 100% accurate. It needs human interaction to train its system to get better and improve accuracy over time.
What Tasks Can You Delegate to AI?
The best tasks to delegate to AI are repetitive, rules-based, or time-consuming. These are the types of work that AI can do faster, more consistently, and without fatigue:
- First pass review to identify risk areas and deviations from standards. When a business uses templates, AI can quickly and easily determine if contracts match or deviate from the information wanted in their agreements. Bari recommends starting with the ‘Great Eight’ clauses — intellectual property, limitation of liability, indemnification, confidential information, data protection and security, warranties, payment terms, and effects of termination. These contract clauses are frequent sources of negotiation and contain high-stakes legal terms, making them ideal for standardization.
- Redline suggestions to reflect preferred language or fallback position. AI can quickly scan for language that doesn’t align with company standards, then suggest changes or fallbacks that meet policy requirements. For example, when working with finance, AI can help ensure payment terms are structured in a way that accounts payable will approve.
- Summarize key terms or issues in a negotiation. AI can automatically summarize counterparty redlines and create a clear and actionable issues list. These summaries help streamline communication across legal, business, and deal teams.
Best Practices for Responsible AI Use
AI can be a game-changer, but only when implemented responsibly. Here’s how to make the most of it:
- Include Your Standards
Upload unique standards based on your business. AI can identify the key issues your business cares about and make precise redlines in your preferred language and fallback positions. - Ensure Data Security and Privacy
Know exactly how data is handled. Ensure that no sensitive data is stored or used to train public models and user consent is respected if their data is used to further improve AI systems. - Guard Against Hallucinations
Anchor AI outputs in predefined playbooks or standards developed and maintained by experienced attorneys to prevent inaccurate or made-up suggestions. Trusted legal content matters. - Maintain Human Oversight
You’re accountable for what you submit. Always review AI suggestions, keep playbooks current with evolving risk preferences, and make the final judgment call to ensure AI outputs are aligned with the business and risk tolerance.
Conclusion
We are still in the early days of what’s possible with AI. AI can do a lot — from reviewing individual documents to extracting data from large volumes of contracts — but it can’t replace human judgment. Human expertise is still needed to navigate gray areas, manage nuance, and make judgment calls that go beyond what rules or data can dictate.
Technology will continue to improve. It will get better, more accurate, and eventually take on more complex tasks. But human professionals will always be needed to oversee, set guidelines, and make key decisions.
Watch the full webinar on demand here to explore how AI and human expertise are reshaping contract review.
Curious about how LegalOn combines AI with human expertise to help teams cut contract review time by up to 85% without compromising accuracy? Book a demo today.
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