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.