AI contract review software: a buyer’s guide

AI
August 22, 2023
10
min
Discover what AI contract review software is and how it works in this buyer's guide.

AI contract review software can be a bit daunting for legal teams with no experience of using legal AI tools. Fortunately, this buyer's guide covers everything you need to know about AI contract review software, from what it is to how it works, and which providers are best.  

What is AI contract review software?

Contract review software is the technology that reviews and analyzes the key provisions of a contract, often using AI and machine learning. By doing this, it automates the contract review process, making it easier to screen contracts for errors and risks than using a manual process. 

Who uses contract review software?

AI Contract review software tends to be used by law firms and in-house legal teams that are tasked with reviewing large volumes of contracts, but simply don't have the time to do it manually. It's best suited to companies that create and manage simple contracts at scale and are looking to automate the routine contract admin work that's involved.

What is AI contract review software used for?

Contract review software is designed to extract information from contracts at scale. This process can often be likened to contract analysis.  

This type of contract AI is trained to recognize and extract core information from large volumes of contracts. This contract data is then condensed to create actionable insights for contract owners, allowing them to respond to risks and improve contract terms before signing the agreement.

For example, most AI contract review software is trained to recognize inconsistencies between a contract’s language and approved policies and terms. By flagging these inconsistencies, AI contract review software enables contract managers to revise any risky contract terms before a contract’s sent out for negotiation and signing. 

The software is able to recognize these patterns and deviations through the use of artificial intelligence (AI). AI seeks to enable technology, like contract review software, to learn and develop without the need for constant programming. Instead, AI enables the software to learn by doing, rather than through coding. 

In fact, you’ll often find that most contract review software has been ‘taught’ to recognize patterns in datasets and complete certain tasks. This teaching process usually involves using the software to review thousands of contracts.

The exposure trains the software to spot and respond to patterns in contracts, and as this exposure continues, AI contract review software continues to identify and flag these patterns, along with deviations from them.

Benefits of AI contract review software

There are plenty of reasons why businesses adopt AI contract review software or AI contract analysis software. Let's run through a few of the core benefits now.

1. Useful for identifying contract risk 

One of the biggest benefits of using a AI contract review tool is that it can help legal and commercial teams to mitigate contract risk with greater accuracy. Contract review software can be used to flag unclear or outdated terms, and hopefully any mistakes, too. 

These thorough checks will prevent nasty surprises later down the line, and ensure that your contracts are as robust and compliant as possible.

2. Faster contract review cycles 

Automating the contract review process means that lawyers spend less time going over a contract with a fine-tooth comb, which can often be very time-consuming.  

By using a high-quality contract review tool, legal teams can minimize the time contracts spend at the review stage, and this helps sales close deals faster. In fact, AI contract management platforms like Juro empower businesses to agree contracts up to ten times faster than traditional tools and methods.

3. Reduced contract admin

AI contract review software also empowers legal teams to reduce the time they spend on contract admin and prioritize higher-value work. This is because the admin is automated by AI.

By reducing the time spent the different stakeholders spend reviewing standardized contracts, contract review software can make the contracting process and legal function more efficient. It also means that legal teams can dedicate more time to higher value tasks.

Limitations of AI contract review software 

There are also some important limitations to be aware of before taking the plunge and investing in contract review software. Let’s run through some of these now.

1. Concerns about accuracy

While some studies have found that AI contract review software can be more accurate than human review, not all contract review software platforms are born equal. No matter which AI contract review solution you use, it's still important to set certain safeguards and oversee the process.

Doing this will protect you from errors while still allowing you to minimize the time you spend manually reviewing the contracts.

3. Some tools are only useful during the review phase 

Perhaps the biggest downfall of AI contract review tools is that many are only helpful at the review stage of the contract process, and less so at the other stages of the contract lifecycle. This is because they are point solutions.

Teams that use this type of AI contract review software will still need to spend large sums of their time drafting a contract, approving, and signing it. If these bottlenecks still exist in other stages of the contract workflow, then faster review processes will have limited success. This is because these bottlenecks can still block deals and prevent them from closing quickly in a fast-growth business. 

This isn't true of all AI contract review tools, though. Juro's AI contract collaboration platform is a comprehensive, end-to-end solution. This means that users can streamline, automate and manage contracts within the tool from contract drafting through to post-signature contract management.

As a result, Juro’s AI contract collaboration platform enables your team to create, execute and manage contracts ten times faster than traditional tools. To find out how, hit the button below to book a personalized demo.

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Examples of AI contract review software

1. Juro

Juro's AI contract collaboration platform offers end-to-end contract management features and AI contract review functionality. This makes it a popular choice for businesses that want to make their entire contract workflow more efficient - not just the review phase.

With Juro, businesses can agree contracts up to ten times faster than with traditional tools. They can also review, summarize and draft contracts using Juro's AI Assistant.

The Juro platform has saved my team 90% of the time we used to spend writing and sharing contracts - Verified Juro user, G2 review

2. Kira 

Kira is an established contract review software providers and was acquired by Litera in 2021. 

According to TrustRadius, the majority of Kira’s customers are enterprise-level businesses. Specifically, the tool helps prestigious law firms and other professional service firms to automate the contract review process. It does this by automatically identifying and extracting data from contracts. This enables legal teams to focus on higher-value work, rather than manual review tasks.

However, as we just described, Kira is a point solution, so it doesn't offer as much value at other stages of the contract lifecycle, like contract drafting and collaboration.

The thing I liked the most is that now I am able to extract key clauses from various contracts without having to go into 100 pages of the contract and extract each clause one by one - Verified Kira user, G2 review

3. ThoughtRiver 

Like most contract review solutions, ThoughtRiver uses machine learning to scan legal documents for contract data, extract this data, and present it in a user-friendly dashboard. It creates a clear list of the issues arising within a contract and automates a fix to resolve these. This accelerates the review process and removes friction when reviewing third party contracts, and those on your own paper.

Unfortunately, ThoughtRiver doesn't offer much functionality for other phases of the contract lifecycle. This means it's better suited to businesses looking to improve the review process in particular.

ThoughtRiver is a highly effective tool for streamlining the contract review process - Verified ThoughtRiver user, Capterra review

5. eBrevia

eBrevia is another AI-powered contract review platform, and it’s commonly used to review legal documents for M&A projects, transactional work, compliance tasks, and lease management. Unlike Juro, it is another point solution, so it focuses on the review phase.

The software, which was founded in 2011 in partnership with Columbia University’s Data Science Institute, is typically used by law firms, enterprise-level businesses, and consulting firms.

It extracts information from current and legacy contract to reduce due diligence time between 60% and 90%. It is best for in-house corporate legal departments, law firms, auditors, consulting firms etc - Verified eBrevia user, G2 review

Which AI contract review tool is best?

When deciding which AI contract review solution is best-suited to your business, you need to consider what problem you're trying to solve.

Most AI contract review tools will be point solutions, meaning that they can only make the review phase of the contract lifecycle more efficient. For the rest of the lifecycle, you'll need to jump between several different tools. This isn't a problem for businesses that only encounter inefficiencies at this stage, and tools like eBrevia, ThoughtRiver and Kira will be suitable.

However, businesses that want to streamline the entire contract workflow, including the contract review phase, will find an all-in-one solution like Juro most useful.

Juro delivers powerful AI alongside a browser-native collaboration platform. This means that you can collaborate better, keep control, and gain unrivalled insights into your contracts. It also means that you can manage your contracts end-to-end in one unified workspace. This isn't possible with most AI contract review systems.

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