What is Contract Review with AI? Learn How it Saves Time
Tedious tasks are rarely the most fulfilling or the best use of your time. You know this if you’ve ever had to review contract after contract, line by line, against a checklist. A contract lifecycle management (CLM) solution with built-in contract review artificial intelligence (AI) cuts out the time-consuming tasks of manually reviewing contracts.
What is contract review AI?
Contract review by AI augments and automates your repetitive contract review tasks. Artificial intelligence takes on the role of a contract manager to find and tag important information in a contract.
The basic steps in the contract review AI process are:
- You upload the contract to the CLM solution, which converts your unstructured data to structured, searchable data
- The AI identifies clauses and compares with your pre-defined clauses to identify any risk or unknown clauses that need your attention
- You confirm, change, edit, or deny the suggestions that the AI suggests
Contract review AI uses contextual analysis to go beyond a simple search function. The AI can find elements like dates and clauses but also understand them as they relate to the contract and the boundaries you establish.
What can contract review AI do?
You can use contract review AI on any contract type within any role, but the most common use cases are repetitive and routine contracts like NDAs, where the AI can identify elements like clauses.
Once the AI identifies contract data, you can use the information in multiple ways, including:
- Approving, modifying, swapping, or deleting clauses within the contract
- Quickly escalating a question or clause to another team member
5 ways contract review AI can transform your legal department
Automated contract review saves time, and such a small change has far-reaching benefits. Here are some ways your legal team and organization can change for the better.
Dedicate more time and attention to high-impact tasks
Your team has more talent and perspective to offer than manually reading repetitive contracts. With AI, you can upload, review, modify, and send a new contract version out for approval in five minutes.
If you compare that workflow to your current process and then multiply it by the number of contracts your team reviews in a year, you’re looking at considerable time-saving. What could you do with an extra one, five, or ten hours a week?
For starters, you can devote your time to just the high-impact contractual risk review tasks within each contract. The contract review AI also frees up time to work on analysis and more strategic work to become a trusted partner.
Simplify legal team onboarding and ensure consistency
A contract veteran that knows your review checklist like the back of their hand can make quick work. What if someone new needs to review contracts, though? Contract review AI eliminates a new hire’s learning curve as they learn your organization’s standard operating procedures. Handing the first pass of a contract review to AI also ensures consistent work across every contract stakeholder.
Work through your review queue faster to close more deals
The right tools take legal teams from cost centers to business partners.
The quicker your contract review is, the less of a bottleneck your team becomes. The less time contracts spend in your review queue, the faster sales and procurement teams can close deals or place orders.
Contract review AI features as part of a CLM solution also makes it easy to move contracts across stakeholders and ensure contract visibility. The result is better collaboration and a stronger bottom line for your organization.
Reduce contract review human error
You’re highly talented and knowledgeable, but you’re still a human. Any time you review large amounts of information, there’s a chance you’ll miss something.
Something as simple as a tight deadline, long queue, or a Slack message that breaks your focus can interrupt your contract review. With contract review AI on your team, you can trust that you’ll accurately review every clause and maintain compliance, even in high-pressure situations.
Leverage data from every contract
Each contract is an opportunity to learn and improve. For example, do you know how much time contract review adds to the sales cycle? What about how long a redline on a non-solicitation vs. an IP indemnity clause adds to your contract lifecycle? Are there clauses you need to set expectations about proactively?
AI-powered contract review gives you visibility into the usage of each clause and its correlation with the number of back-and-forth negotiations, so you and your team can further optimize your contracting process. Plus, you’ll be able to quickly search for and find past contract details to compare, answer questions, strategize, and handle contractual obligations.
Ironclad has best-in-class AI for contract review
Ironclad AI helps teams review contracts up to 60% faster. The AI is trained universally across hundreds of thousands of contract types, which means you can build parameters and add clause detection for any contract. Plus, Ironclad AI detects almost 200 contract properties you can approve, change, escalate, or delete within the Ironclad platform.