Explore how AI contract review technology is transforming legal work. Download the guide!
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Contracts are the lifeblood of business – and those reviewing them are challenged to turn them around swiftly, while managing nuanced contract risks, resource constraints, and other strategic priorities. Legal professionals spend much of their time reviewing and managing contracts, safeguarding the interests of the business, ensuring compliance, and setting the trajectory of long-term business relationships.Yet, as vital as they are, reviewing these contracts can be tedious, time-consuming, and prone to human error. Business partners need fast turnarounds to start a relationship, close a deal, or bring on a vendor. Delays in contract workflows can slow or even kill a deal.
The average in-house attorney spends 4.5 hours daily manually reviewing and managing contracts, according to the 2023 Enterprise Legal Management Report. One in four in the United States spends six to eight hours daily on contracts.
Despite the time they spend in contract review – many legal professionals still struggle with contract delays. Of 100 corporate legal departments surveyed by Gartner, 40% admit that managing contract review is too slow.Under pressure to turn contracts around faster, bring even more workin-house, and operate under budget constraints, legal departments want to use technology to improve contract review. According to the ACC's 2023 Legal Technology Report, three in four in-house professionals responded that they want to leverage legal software more effectively in handling contracts.Historically, the only contract technology available was traditional Contract Lifecycle Management software, a category of tool plagued by widespread dissatisfaction.
For many, CLMs cost too much, are overly complex, take too long to implement, and don't ultimately solve the most pressing day-to-day work of in-house legal teams – contract review. Enter pre-signature AI contract review and expert legal guidance. In this buyer's guide, we'll explore:
In-house legal teams balance business strategy and legal protection, ensuring that every contract aligns with both organizational objectives and compliance. Today, many professionals still perform contract reviews manually, with basically no technology enablement besides Microsoft Word.
Companies are rarely satisfied with this status quo, but they have lacked alternatives.Many organizations have found ways to streamline workflows and post-signature operations, but the critical phase preceding that final sign-off still presents a maze of complexities and delays.
The pre-signature contract review phase remains, for many, the Achilles heel in the entire contract process.
While some CLMs efficiently manage contracts post-execution, the road leading to that signature still winds through the challenges of manual errors, inefficiencies, and delays.
In-house legal professionals have had to spend too much time manually reviewing contracts instead of focusing on higher-value strategic work. These have sometimes emerged as bottlenecks in signing contracts and helping the business and mission grow. The advent of AI Contract Review Software presents a game-changing opportunity, specifically tailored to enhance the pre-signature review process.
With automation, precision, and unmatched speed, these platforms are transforming how in-house legal teams approach contract initiation.And the transformation is already underway. More than 4.500 legal teams globally use LegalOn's contract review software – 98% of customers report saving time, and 9 out of 10 report improvements in review quality and accuracy.
AI contract review software assists in examining, analyzing, and reviewing contracts before signature. Instead of manually sifting through pages of contractual documents, this software can quickly identify critical clauses and potential risks and suggest revisions. Its key benefits include:
Efficiency: by drastically reducing the time required to review and finalize contracts.
Accuracy: through reducing human errors by providing consistent and automated reviews.
Scalability: it can handle large volumes of contracts without additional resource demands.
Cost savings: reducing the need for extensive manual review leads to financial savings in the long run.
Contract Review software, particularly platforms that responsibly integrate AI into their products, can be a powerful force multiplier for legal teams of all sizes. As in-house teams face limited, if not declining, legal budgets while the scope and complexity of their work increases, they need powerful technology to help.
Here are some key areas where AI-powered Contract Review tools can be particularly effective:
1. Time constraints: Manual reviews are time-consuming. By using contract review software, these reviews can be conducted more swiftly.
2. Optimizing time: The time your team spends on reviewing contracts could be better spent on strategic tasks. Using software allows for better allocation of your and your team’s time.
3. Training costs: Continually training your team on the nuances of new contracts or changing regulations can drain resources. Contract review software can be updated to reflect these changes, ensuring consistent and up-to-date reviews.
1. Maximizing Review Quality with Limited Time: While human reviewers may be able to conduct impeccable reviews with unlimited time, the reality is that time is limited. AI contract review bridges this gap by rapidly analyzing and pinpointing potential issues, ensuring both high-quality and efficient reviews. In essence, the solution to ensuring top-notch accuracy in the time you have is software.
2. Return on investment (ROI): AI + expert legal guidance frees up time and monetary savings—combined with reduced human error—which offers a compelling ROI for businesses.
1. Future-proofing: As your organization grows, so will your contract workload. Implementing software ensures you are prepared for this surge in volume.
2. Volume matters: The more contracts your organization processes, the higher the chances of oversight or errors slipping through. Manual reviews can become overwhelming and error-prone as the volume increases. While your contracts are growing, your time isn’t.
3. Complexity is key: Not all contracts are made equal. Some have multilayered clauses and terms that can easily be misunderstood or misinterpreted. Software can help streamline the understanding and categorization of these complexities.
Today, the market for technology that assists with contract management is noisy. Most vendors claim to offer solutions that help with contract review, but not only do they have long and resource-intensive implementation processes, their features and functionality for pre-signature review are lacking. Choosing the right tool tailored to your needs requires a focused approach. Here’s a deep dive into some of the most crucial features to consider:
Given the large number of contract management tools, it’s important to tune out the noise and focus on the solutions that will help with the most painful part of the process–contract review. Therefore, it’s essential to focus on platforms designed explicitly for pre-signature review. Here’s why:
1. Automated first-pass review: Your platform should detect nuanced clauses and terms tailored to the contract type, highlight deviations from pre-defined standards, and provide risk assessment based on your negotiating position and risk preferences, even for third-party paper.
2. Search and compare past precedents and contracts: The solution should allow users to easily search past contracts for the language they need and compare contracts article by article to find deviations from templates or precedents, even when not structured the same way.
3. Create and customize your own playbooks: Playbooks are a useful tool to help legal teams codify their best practices and cascade them across their businesses. Build your playbooks on your contract review tool to enable consistent contract review.
4. Redline with precision: Negotiations are critical in the pre-signature phase. You want them to go smoothly, and therefore, your platform should be able to make intelligent redlines, only focusing on necessary clauses to avoid overwhelming the counterparty with superfluous changes. The tool should also understand the contract’s context, ensuring the proposed revisions are apt and precise.
5. Off-the-shelf review: Often faced with many contracts and tight resources, many legal teams do not have fully built-out playbooks for every contract type they review. That’s why your contract review solution should work off-the-shelf so you and your team can start reviewing against industry standards on day one.
6. Version control: Edits matter; therefore, your platform should be able to track changes and revisions made to your contracts to compare edits.
7. Ready-to-use templates: Drafting new contracts from scratch is hard and can cost you countless hours scouring the internet looking for the right templates to use. Find a platform that allows you to kickstart your drafting process with tried and-tested templates that adhere to best practices and your negotiating position.
Action Tip: When trialing a potential solution, bring some of your own contracts (past or current) to test each of the features described here. This hands-on approach will provide a comprehensive understanding of the tool’s capabilities and alignment with your needs.
In the realm of contract review, the line between generic AI tools or ‘GPT-wrapper solutions’ and platforms infused with genuine legal expertise is a defining one. The intricacies of contracts and the implications of their clauses require a depth of understanding that transcends mere pattern recognition.It’s therefore critical to choose a platform built on foundational legal content validated by seasoned attorneys:
1. Grounded in legal expertise: What does a good contract review look like? At its core, it hinges on seasoned legal experience to identify precisely what to be on the lookout for.
2. Paired with attorney-drafted language: Upon spotting a concern, the solution isn’t just about flagging it. You need genuine legal verbiage to enact an appropriate modification.Additionally, having concise notes explaining your reasoning can be invaluable when presenting the rationale to the other party.
3. Practical guidance to weigh the risks: Not all flagged concerns hold equal weight. Determining whether to amend a clause requires practical guidance on the implications of a risk and its relevance to your unique situation.
4. Informed by market norms: Awareness of broader market norms plays a crucial role. You’ll want insights into which risks are most pivotal and the prevailing market standards for various contract terms.
Action Tip: Always inquire about the origins of the solution’s legal content, and if possible, speak to some of the experts. Understanding the knowledge behind the digital curtain can provide a clearer picture of the platform’s reliability and depth.
Platforms like LegalOn, founded by experienced corporate attorneys, stand on a unique vantage point. They understand the intricacies of legal work, not just from a theoretical standpoint, but from practical, hands-on experience. This grounding in the software is ready for real-world challenges and nuances.
Lengthy implementation processes can stall productivity and add layers of complexity. The ideal contract review solution is not just about advanced features but also about simplicity and immediacy of its integration and use. Here’s what to look for:
1. Swift onboarding process: Time is of the essence. Opt for solutions that boast day-1 functionality, enabling your team to hit the ground running.
2. Minimal training time: The best tools are intuitive. The learning curve should be minimal, allowing your team to use the tool without extensive training sessions.
3. Intuitive interface: An easy-to-navigate dashboard ensures that all functionalities are just a click away, promoting frequent and optimized use.
Action Tip: When considering a solution, request a live trial. See how the interface feels and understand your ability to easily navigate to the features you’ll use the most.
In the landscape of contract review, platforms stand out through genuine innovation underpinned by proprietary AI that combines the best of Generative AI and traditional Machine Learning techniques. As contracts bristle with legal and financial intricacies, there’s no room for the “hallucinations” or erroneous outputs that off-the-shelf GenAI models can produce.
1. Dedicated models: Look for platforms built on proprietary AI models, which are meticulously trained on domain-specific datasets, reducing the chances of generating false or unrelated information. The AI isn’t just smart; it’s specialized.
2. Differentiated approach for reliability: By leveraging proprietary AI, a toptier system doesn’t merely scan a contract—it interprets, understands, and critiques it. This differentiated approach ensures that every contract is treated with the craftsmanship and attention it warrants, guaranteeing unparalleled trustworthiness in every review.
3. Infused with legal expertise: A premium contract review platform doesn’t just employ AI—it is grounded in training tailored for the legal sector. It understands the difference between standard language and stipulations that require special attention. This level of specialization ensures that each contract undergoes a review process that’s both thorough and precise.
Action Tip: When evaluating contract review platforms, inquire about the origins and training processes of their AI models. Seek solutions that take pride in their proprietary, specialized systems— it’s a clear indicator of their commitment to accuracy, reliability, and the spirit of innovation.
AI is the buzzword, and many entities are rushing to integrate it without a clear roadmap. However, a responsible platform doesn’t just add AI; it understands it. LegalOn’s journey since 2017 showcases a conscious commitment to not only investing in AI but applying it responsibly, ensuring that the technology truly enhances the user’s experience without compromising accuracy or ethics.
In the realm of contract review, where sensitive data, trade secrets, and crucial business information are frequently exchanged, security isn’t just a feature— it’s a necessity. Here’s what to prioritize in your search for a truly secure contract review solution:
1. Data privacy and model training: Top-tier contract review software should be built on algorithms that do not rely on sharing your data with third parties for model training. This ensures that your contracts, with all their inherent sensitivities, remain confidential and are not used for any external purposes.
2. No data storage in third-party LLMs: With the rise of Large Language Models (LLMs) in the tech world, it’s paramount that your contract review solution processes data without storing it. When your data interacts with these sophisticated models, it should be just that—an interaction. Once the processing is done, the data should be purged, ensuring it doesn’t linger or get stored.
3. Continuous compliance updates: The landscape of data protection, privacy standards, and cybersecurity is continually shifting. Your chosen platform should not only meet current standards but be agile enough to adapt to new regulations, ensuring compliance at all times.
Action Tip: Prioritize contract review solutions that center security and compliance in their offerings. In addition to checking for features, look for security certifications, continuous audits, and testimonials that reinforce the platform’s commitment to keeping your data shielded.
It can feel overwhelming to identify software that’s truly aligned with your unique requirements and challenges in contract review. However, there are differentiators that set certain platforms apart—and LegalOn has key distinctive features:
LegalOn isn’t just another tool trying to do it all or one awkwardly adapting post-signature methodologies for pre-signature applications. It’s built from the ground up with a specific purpose. Whether it’s the automated firstpass review that intelligently detects nuances and risks, the capability to easily search and compare past contracts, precise redlining for smoother negotiations, customizable playbooks, or adept version control and templates—LegalOn encapsulates the true essence of what pre-signature review should be.
At its core, LegalOn is not merely a tech tool—it’s a combination of legal expertise and AI innovation.By integrating genuine legalcontent curated by experienced attorneys, we ensure that our platform offers lawyer-led validation, bridging technology with tangible legal wisdom.
Beyond its functionalities, LegalOn stands out for its intuitiveness. In a world where you’re juggling multiple software tools daily, we prioritize ease of use and swift onboarding, ensuring you can hit the ground running from day one, without any steep learning curves.
Innovation at LegalOn is rooted in responsibility. In an age where AI’s limitations, like hallucinations, are becoming apparent, we employ proprietary AI models and partner closely with other leading AI technologies to safeguard against inaccuracies and ensure you’re always equipped with dependable insights.
LegalOn’s dedication to security is foundational, and we are SOC 2 compliant. By refraining from sharing data with third parties for model training and ensuring no residual data storage inLLMs, we uphold the most rigorous security standards. An Experienced Team and Track Record: Founded by corporate attorneys in 2017, LegalOn has grown to serve more than customers worldwide. At LegalOn, our global team of more than 500 employees is steadfast in our mission—applying cutting-edge AI responsibly, underpinned by rich legal expertise.
There’s a reason why LegalOn stands apart. But don’t just take our word for it. Book a demo with us and experience firsthand how AI combined with expert legal guidance can help you elevate your contract review process.
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