While contract preparation may seem like the most time-consuming task in the contracting process, reviews are the absolute beast.
Any business contract goes through a basic review for language formatting, legal review for risks, subject matter experts review for specifics and financial review for budgets. After all these internal reviews, there are also external reviews with third parties, often leading to negotiations and revisions. Post-revisions, the contracts have to be reviewed again.
This entire contract review process takes considerable back and forth. It requires teams to go through the whole agreement repeatedly rather than focusing more on their specific area of expertise. Legal teams are constantly seeking ways to improve this review process. As with many industry problems, AI has a solution for this challenge as well. AI is optimizing many legal workflows, and the contract reviewing process is one of them.
Source: LinkedIn
In this post, we will look at the best AI contract review software, the benefits of using one, and how you can take advantage of it to improve your contracting workflows.
What is AI contract review software?
AI contract review software is a specialized legal-tech solution that uses artificial intelligence (mainly natural language processing) to automate reviews. It can automatically redline agreements highlighting potential issues and risky terms. AI is also getting refined enough now to suggest alternatives for problematic terms. With all these features, AI contract review tools speed up the entire review process. Different industries have already started taking advantage of these tools.
Source: LinkedIn
Source: LinkedIn
AI contract review software: Who uses it?
AI contract review software is helpful for the following teams in companies who regularly deal with reviewing different types of contracts:
1. Legal: Supports reviewing key terms such as compliance, data protection, confidentiality, termination/renewal, dispute resolution, and more in all contracts.
2. Sales: Supports in reviewing specifics of sales agreements, such as financial, product specifications, customer commitments, and more.
3. Procurement: Supports in reviewing the terms of procurement agreements, such as financial and supplier terms.
4. Marketing: Supports in reviewing agreements of marketing deals for the best interests of the brand. It includes checking partnership rights, performance metrics, and non-compete clauses.
5. Finance: Supports the review of financial terms in all agreements.
6. Human resources: Supports in reviewing employment contracts, non-disclosure agreements, and workplace policies that need explicit employee consent.
7. Risk management: Supports reviewing all contracts with risk of disputes and non-compliance, mainly vendor contracts and service-level agreements.
Benefits of AI Contract review software
AI is transforming contract review workflows (for the good) and providing these key benefits:
#1 Improving speed and efficiency
AI contract review software can quickly analyze large volumes of contracts and identify risks faster than a human can. For instance, Open, one of our fintech customers, saw a 90% reduction in turnaround time for contract approvals by adopting AI-based reviews.
#2 Enhancing accuracy and standardizing the process
AI contract review software also allows you to create your own custom review playbooks. In these playbooks, you can set guidelines to evaluate contracts. These playbooks act as a contract review checklist and ensure that contracts are reviewed by the same set of standards, reducing the risk of manual errors. For instance, Open, our customer, also saw 65% reduction in errors or discrepancies in contract terms after adopting AI-based reviews.
#3 Allowing to scale up your contract volumes
As the company grows, the contract volume also increases. In a recent survey of legal professionals, more than two-thirds said they manage a high volume of contracts. Around 5% indicated that they did not have any platform for contract management.
AI contract review software is a good legal-tech solution for busy legal professionals, helping them to handle more contracts in a shorter time.
#4 Making compliance and risk mitigation easier
As AI contract review software supports creating custom review playbooks, you can easily add guidelines to check compliance conditions in these playbooks. These playbooks ensure you are not missing necessary compliance checks. For example, Gameskraft started using SpotDraft to streamline the contracting process and make compliance tracking easier.
#5 Reducing operating costs
As AI replaces manual tasks, you can manage huge volumes of contracts with smaller terms, helping to reduce overall operating costs. For instance, the legal team at Public US University started using SpotDraft to automate contracting tasks. Soon, the team started expanding to new regions. They saved 6+ hours per person per week and the cost of managing contract admin tasks with the automation.
Key features to look for in an AI contract review software
One of the simplest ways to choose the best AI contract review software is to look for these key features:
#1 Real-time risk detection and mitigation
The ability to highlight risky terms, redline the contract wherever there are issues, and suggest alternatives. Review results should be almost similar to how a human review would look like.
#2 Automated contract data extraction and summarization
Generating quick AI-powered summaries of contracts for faster reviews. Also, the tool can pull key terms without the reviewer having to read the entire agreement. For instance, if a reviewer inputs ‘find the lease duration of this lease agreement’ in the tool, it can pull that data automatically.
#3 Customizable contract review playbooks and workflows
The review software supports creating custom playbooks and workflows for your brand where you can pre-set review conditions to standardize reviews.
#4 Integration with contract management software and other tools
Lastly, it's ideal if your contract review software is part of your existing contract management software. Contract management software offers integrations with CRM, cloud storage, and other company software. Having an AI extension in your existing contract management software gives you a well-rounded solution that fully fits your current tech stack and gives a smooth workflow.
Top 5 AI contract review software
Best AI contract review software | Summary
To make your software search easier, we have listed below the top 5 AI contract review software in the market:
#1 VerifAI by SpotDraft
VerifAI by SpotDraft is an AI-powered contract review solution used to fast-track approvals. It’s available as a Microsoft Word add-in so you can review agreements in the platform you’re already using.
Key features:
- Contract summary: Generating AI-powered summaries of contracts
- Review playbook: Building customizable review playbooks
- Risk detection: Completing contract redlining by highlighting non-compliance and risky terms
- Risk mitigation: Suggesting alternatives for non-compliance and risky terms
- Intelligent search: Pulling important information from contracts by responding to questions.
Pricing:
Business plans start at $480/year
What do users say about SpotDraft?
Users appreciate the easy-to-use interface, integrated AI features reducing app switches, and outstanding customer service.
Source: SpotDraft user review via G2
#2 CoCounsel
CoCounsel is an AI contract review tool and one of the solutions provided by the legal research technology company Casetext. It scans documents and replies to your queries in readable answers. It's primarily used for contract redlining.
Key features:
- Contract summary: Generating AI-powered summaries of contracts
- Risk detection: Completing contract redlining by highlighting non-compliance and risky terms
- Intelligent search: Pulling important information from contracts by responding to questions.
Pricing:
Individual plans start at $225/month
What do users say about CoCounsel?
Users find the strong conversational functionality of CoCounsel helpful, making searching for information easy.
Source: CoCounsel user review via G2
#3 DocuSign AI
DocuSign AI is an advanced feature within the DocuSign contract management platform that automates review aspects of the contract lifecycle. It uses advanced AI algorithms to analyze contracts, extract key clauses, and identify potential risks.
Key features:
- Contract summary: Generating AI-powered summaries of contracts
- Risk detection: Completing contract redlining by highlighting non-compliance and risky terms
- Intelligent search: Pulling important information from contracts by responding to questions.
Pricing:
Not mentioned on the website
What do users say about DocuSign AI?
Users like the intelligent AI-powered search but found the pricing out of budget.
Source: DocuSign AI user review via G2
#4 Ironclad AI
Ironclad AI is one of the most popular contract review software, providing all the crucial features needed for fastened reviews. That includes customizable playbooks, intelligent research, and automatic contract redlining.
Key features:
- Contract summary: Generating AI-powered summaries of contracts
- Review playbook: Building customizable review playbooks
- Risk detection: Completing contract redlining by highlighting non-compliance and risky terms
- Risk mitigation: Suggesting alternatives for non-compliance and risky terms
- Intelligent search: Pulling important information from contracts by responding to questions.
Pricing:
Not mentioned on the website
What do users say about Ironclad AI?
The user found customer support helpful and vast automation features. However, they found pricing to be expensive.
Source: Ironclad AI user review via G2
#5 Juro’s legal assistant
Juro is a contract automation platform providing a legal assistant to draft and review contracts. Its newly added AI features are helping its customers accelerate contract reviews.
Key features:
- Contract summary: Generating AI-powered summaries of contracts
- Review playbook: Building customizable review playbooks
- Risk detection: Completing contract redlining by highlighting non-compliance and risky terms
- Risk mitigation: Suggesting alternatives for non-compliance and risky terms
- Intelligent search: Pulling important information from contracts by responding to questions.
Pricing:
Not mentioned on the website
What do users say about Juro?
Users found new AI features promising but still see room for improvement.
Source: Juro user review via G2
Also read: The Legal Blueprint for building a safe AI Usage Policy
Best practices for implementing AI Contract Review Software
Here are some best practices to keep in mind for smooth AI implementation.
#1 Clearly define your goals for adopting AI in contract review
Firstly, set goals in advance on what you wish to achieve by implementing AI contract review solutions. These goals have to be measurable KPIs, such as reduction in turnaround time, lowering compliance fails, and more.
#2 Get key stakeholders on board
Getting the right results from any tech implementation depends on how well all teams adapt it. Get all key stakeholders, such as legal, sales, procurement, and other teams involved in contracting, on the same page for smooth implementation. Explain the goals and how the solution is helpful, and conduct training if required.
#3 Identify the right solution for your goals
Choose an AI contract review solution that has all the necessary features like customizable playbooks, intelligent search, AI-powered summaries, and automated redlining. Also, check if the pricing fits your budget.
#4 Use AI as a support tool, not a replacement
Another important point to note is AI cannot replace human review fully. Use AI as an assistant and not a replacement.
"You really can't substitute a lawyer. Take risk tolerance, for example. Maybe AI can give you data on which path you can take but, at the end of the day, you need context to be able to make a call."
~ Katayoon Tayebi, Associate General Counsel, FIGS
While AI can catch repetitive issues, retaining human validation in the process ensures you are not missing any new potential risks.
#5 Monitor and evaluate the outcomes of your implementation
Lastly, keep a tab on all the KPIs you set in advance. This way, you can go back to the provider to see if anything is wrong and refine the process if you aren't meeting the goals.
Fast-track contract reviews with SpotDraft AI
VerifAI is a readily available and affordable solution with all the necessary features for efficient contract reviews.
Features like automated clause extraction, contract redlining, risk identification, and flagging ensure that nothing important is missed during the review process. Our playbook feature helps you standardize the entire review process and reduce errors. We also have pre-vetted playbooks available, which are created by working with the top lawyers in the industry. You can either readily use these playbooks if you do not have one and use them as a base to create one of your own.
Schedule a quick demo where one of your experts walks you through all features and suggests a personalized workflow suited to your business.
