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Using AI for the Contract Review Process

— March 17, 2022

When performing due diligence, lawyers also have a certain amount of subjectivity when it comes to contract and document review.

Artificial Intelligence (AI) has the potential to disrupt all kinds of industries, making our lives easier by taking over repetitive, remedial tasks and freeing people up to focus their time and energy on tasks that require more thoughtful analysis.

How Artificial Intelligence is Impacting Industries

However, AI is not going to be the be-all-end-all of every industry. In fact, some sectors should be particularly cautious about using AI.

For instance, in the legal field, there are a lot of ways that using AI can lead lawyers to do more work. Plus, there are many ethical implications of using AI in the courtroom and during the document review process. When it comes to contract management software, the risks are substantially different, but when using AI for contract analysis, the business stakes are just as high.

Let’s look at the history of AI and consider the ethical implications it poses for legal professionals, especially when it comes to ai contract review software and where the contract data fits into the overall theme.

A Brief History of Artificial Intelligence in the Legal Profession

Once Upon a Time — AI Capabilities?

In many ways, the legal profession hasn’t changed all that much in the past 200 years. Back in the 19th century, lawyers did their work through manual processes that included legal work, contract review, and document analysis. They relied on their knowledge of the law to do their work.

Today’s lawyers still operate in the same way. First, they need to get a law degree and pass the bar exam before they can even start practicing law. Then, they choose their area of specialty, where they focus their energy and attention to make sure they are always up-to-date on the latest regulations and laws.

Looking Ahead to Advanced Software

In short, lawyers need to fully understand the law and its many nuances if they want to get anything done.

Things didn’t really start to change until about the 1980s, when computers became more prominent and accessible to lawyers. However, at that time, humans were smarter than computers. They told computers what to do—not the other way around.

AI in Today’s World

How Artificial Intelligence Works on Legal Documents

Today, in 2021, computers have become way more intelligent than humans in a lot of ways. Through AI and machine learning (ML), computers can analyze massive amounts of data in a fraction of a second. As a result, tons of companies use AI’s data-driven predictions to make business decisions.

The word “predictions” is critical here. AI can give us predictions based on the data it analyzes. However, it does not necessarily give us accurate information.

For instance, many human resources (HR) firms use AI software to help them sort through piles of candidates. At the outset, this seems like a great way to save time. Who wants to manually sift through hundreds of applications, many from unqualified candidates, when you could simply submit them to AI and have a shortlist of candidates to choose from in a matter of seconds?

Looking Forward Beyond Legal Documents in Microsoft Word

However, there are workarounds. Humans are smart, and they have figured out how to get past AI review. By using white text, candidates can sneak words into their resumes that will help them get past the AI software and into the hands of recruiters. For example, a simple mention of “Oxford” or “Cambridge” can turn a “no” into a highly qualified candidate in the mind of an AI.

This example highlights the primary limitation of AI and AI software—a complete lack of subjectivity and understanding of nuances.

In the HR example, by only filtering candidates based on strict, set criteria, AI might gloss over candidates from diverse backgrounds that may make them qualified. Perhaps a candidate didn’t go to a prestigious university (or attend college at all) but has significant experience working in the industry. By relying wholly on AI, the HR team can miss out on a lucrative candidate who could make a substantial impact on their organization.

Potential Pitfalls of AI 

Challenges of Using AI Contract Review With Contract Management

AI Review Software in Document Review

When performing due diligence, lawyers also have a certain amount of subjectivity when it comes to contract and document review. Although they rely on playbooks for reviewing contracts, they may need to make amendments or exceptions based on the particular contract and the other parties involved.

At the end of the day, a lawyer is responsible for their clients, even if it’s just a bit of contract review and contract management via Microsoft Word. Therefore, they need to ensure that everything they do is in their clients’ best interests.

When AI Review Processes Get it Wrong

AI, on the other hand, has no such responsibility. They simply do what they are told by whoever has trained them and whoever is feeding them data.

So, who does AI answer to? Should they answer to the vendor or the owner? If something goes wrong, who is at fault, the lawyer who gave AI inaccurate data or the vendor who created the AI in the first place?

Additionally, who does the text that AI creates belong to? Is it the property of the vendor? The lawyer? The client?

These are all critical questions that don’t yet have a definitive answer.

Best Way to Use AI in Contract Review and Contract Management

Embracing AI Contract Review in Contract Management Software

Here at DocJuris, we fully embrace the use of technology to make the process of redlining contracts more efficient. But, at the same time, we recognize the limitations posed by technology, especially AI, which can end up doing more harm than good.

Woman signing contract; Photo by Karolina Grabowska from
Woman signing contract; Photo by Karolina Grabowska from

For example, procurement contracts and employment agreements require contract managers in the contract review process in order to perform contract drafting in an ideal but supervised manner — otherwise, risks can be lost in translation with a human in the loop.

Keeping Humans in the Loop to Review Contracts

That’s why our automated software is designed to work alongside your team instead of replacing it entirely. In other words, we believe in keeping humans in the loop with contract ai. When it comes to critical vendor contracts, inefficient contracting can impact law firms, contract management, and impact contract data along the way.

With DocJuris, your team can dramatically reduce the amount of time it takes to redline contracts without sacrificing quality. With integrated playbooks and a streamlined review process, everyone involved in contract negotiations can have up-to-date revisions at their fingertips. Further, automating time draining tasks such as amendments can bring broader, horizontal efficiency to an organization across various departments. This is how companies are bridging legal, procurement, and sales in the highest effective way through ai contracting software.

Where Collaboration Comes In Contracting Processes

With AI as a tool set for a human in the loop, large companies can obviate risks but increase speed and accuracy. In order to generate accurate contract data necessary to power AI contracting software, human feedback is paramount. This is particularly true when looking at the economics of today — bubbles burst, terms change, companies grow, and many more . . . contract.

See how DocJuris can empower your team by scheduling a demo.

LegalReader thanks our friends at DocJuris for permission to share this article. The original is found here.

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