AI-Supported Contract Review
An AI-Supported Contract Review is a contract agreement review process that is an AI-supported process (composed of AI-supported contract review tasks).
- AKA: AI-Powered Contract Review System, AI-Assisted Contract Review System.
- Context:
- It can (typically) assist Legal Professionals by identifying potential issues, risks, and areas for negotiation in contracts.
- It can (often) involve Document Analysis and Information Extraction from contracts to facilitate a quicker and more efficient review process.
- It can (often) provide insights and recommendations based on the extracted information, aiding in decision-making.
- It can reduce the Contract Review Time Measure and Contract Review Effort Measure, thereby increasing overall efficiency.
- It can support both Pre-Signature Contract Review and Post-Signature Contract Review, enhancing contract lifecycle management.
- It can be integrated into existing Contract Management Processes to augment human expertise.
- It can (often) require ongoing training and updates to keep up with changes in contract law and legal standards.
- It can range in complexity from simple clause identification to comprehensive legal risk assessment.
- It can be described in a Contract Review Automation Professional Presentation or a Contract Review Automation Publication.
- It can be within an AI-driven Contract Assistant.
- ...
- Example(s):
- Thomas Reuters Document Intelligence (https://legal.thomsonreuters.com/en/products/document-intelligence),
- ThoughtRiver's Lexible Fusion AI Engine, a legal AI engine designed to automate contract review, editing, and approval processes (https://www.thoughtriver.com/).
- LawGeex's AI, a contract review platform that integrates a managed-AI designed to automate the contract review process (https://www.lawgeex.com).
- ContractSafe [AI]ssistant, an AI-powered contract management platform designed to automate contract review (https://www.contractsafe.com),
- Legartis AI, an AI-assisted contract review service provider (https://www.legartis.ai),
- an LegalOn Assistant using AI to interpret and review contracts, saving significant time and reducing the risk of human error.
- an AI-powered OCR system that automates the extraction of information from legal documents, enhancing accuracy and efficiency.
- Automated identification of non-compliance issues in a contract.
- Highlighting of unfavorable terms in a contract using Natural Language Understanding.
- Generation of a redlined contract document indicating suggested changes.
- Comparison of a contract against a database of legal precedents and standards.
- Prediction of potential legal disputes based on contract language analysis.
- ...
- Counter-Example(s):
- Manual Contract Review: The process of reviewing contracts solely by human legal experts without AI support.
- Generic Document Analysis: Analysis of documents that are not specifically legal contracts or do not require specialized legal interpretation.
- Automated Legal Advice: Providing legal advice or decisions without human oversight, which typically remains the domain of licensed legal professionals.
- Non-Contract AI Applications: Other AI applications outside the realm of contract review, like Automated Image Recognition or Predictive Text Generation.
- Customer Relationship Management (CRM) System,
- Accounting Information System,
- Human Resource Management System,
- Inventory Management System.
- See: Contract Analysis, Legal Document Critical Evaluation, Machine Learning in Law, Contract Lifecycle Management, Natural Language Processing, AI in Legal Tech, Contract Management System, Legal Tech, Machine Learning.
References
2024
- (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept AI-Supported Contract Review in 1- 2 paragraphs. ChatGPT (model:gpt-4-turbo-preview). Retrieved: 2024-05-25.
- QUOTE: AI-supported contract review is a transformative approach in the field of legal technology, leveraging artificial intelligence to streamline the process of scrutinizing legal contracts. This method employs sophisticated algorithms to read, understand, and analyze legal documents at speeds and scales unattainable by human legal teams. AI tools in this context can quickly identify key information, clauses, and potential issues within contracts, such as compliance risks, obligations, and entitlements, enabling legal professionals to focus on higher-level analysis and decision-making rather than manual, time-consuming document review. These AI systems are trained on vast datasets of legal texts, from which they learn to recognize patterns, terminology, and the implications of various contractual elements. The result is a more efficient, accurate, and cost-effective method for reviewing contracts, reducing the likelihood of human error and freeing up legal professionals to concentrate on more strategic tasks.
By integrating AI-supported contract review processes, businesses and legal firms can achieve a greater level of precision in risk management and contract negotiation, ensuring that agreements are fully optimized and compliant with relevant laws and regulations. This technology is continuously evolving, with ongoing improvements in natural language processing (NLP) and machine learning algorithms enhancing the depth of analysis these AI systems can provide. As adoption grows, AI-supported contract review is set to become a standard tool in the legal arsenal, revolutionizing how contracts are managed and paving the way for more sophisticated legal service delivery models.
- QUOTE: AI-supported contract review is a transformative approach in the field of legal technology, leveraging artificial intelligence to streamline the process of scrutinizing legal contracts. This method employs sophisticated algorithms to read, understand, and analyze legal documents at speeds and scales unattainable by human legal teams. AI tools in this context can quickly identify key information, clauses, and potential issues within contracts, such as compliance risks, obligations, and entitlements, enabling legal professionals to focus on higher-level analysis and decision-making rather than manual, time-consuming document review. These AI systems are trained on vast datasets of legal texts, from which they learn to recognize patterns, terminology, and the implications of various contractual elements. The result is a more efficient, accurate, and cost-effective method for reviewing contracts, reducing the likelihood of human error and freeing up legal professionals to concentrate on more strategic tasks.
2023a
- (Thomas Reuters,2023) ⇒ "How AI contract review technology can ease the headache of tedious tasks". Published: August 15, 2023. In: Thomas Reuters Blog.
- QUOTE: Machine learning is a subset of artificial intelligence, that uses algorithms to “teach” software to learn from a data set and perform certain tasks. In contract review, this means using a set of hundreds or thousands of real contracts to teach the software to identify pieces of information.
For instance, Document Intelligence can identify pertinent information from hundreds or thousands of documents in minutes. Thomson Reuters Practical Law attorney editors train Document Intelligence to identify contract types, contract provisions, and terms. It can also extract key figures like payments and dates for obligation data you can trust. Go beyond keyword search and tap into truly accurate results based on the context and intent of the text itself. With answers delivered almost instantly, users have accelerated information retrieval and review by more than 50% (...)
(...)When companies rely on their legal team or domain experts to independently train AI models to align with their organizational needs, it often leads to a delayed realization of value and less precise outcomes. Consequently, initial high expectations may turn into disappointment. The reason for this is two-fold:
- 1. AI requires a substantial amount of data, and that large volume of data also must be diverse to build scalable and accurate models.
- 2. Most legal teams aren’t experts in training AI models and have a never-ending, growing to-do list. While the desire to innovate is strong, it becomes challenging to invest significant time in training AI when the business demands our utmost attention to fulfill our legal duties.
- QUOTE: Machine learning is a subset of artificial intelligence, that uses algorithms to “teach” software to learn from a data set and perform certain tasks. In contract review, this means using a set of hundreds or thousands of real contracts to teach the software to identify pieces of information.
- Document Intelligence is trained by Practical Law attorney editors and experienced subject-matter experts to work on day one. Models are robust and continuously improved, at no additional cost to the customer.
2023b
- (Button, 2023) ⇒ Ken Button (2023), "How To Use AI To Simplify Contract Review". In: [ContractSafe Blog].
- QUOTE: Contract review is the process of examining a document to ensure its accuracy and completeness. Now, imagine having a brilliant assistant who does that for you. And they’re much faster, make fewer mistakes, and can handle thousands of contracts without burning out. That’s AI contract review.
Instead of manually sifting through pages of legal jargon, AI swiftly scans, analyzes, and highlights key areas in contracts. It’s like a magnifying glass that can spot even the tiniest details in your contracts, and it learns from previous contracts, so every time it checks a new one, it becomes even smarter.
- QUOTE: Contract review is the process of examining a document to ensure its accuracy and completeness. Now, imagine having a brilliant assistant who does that for you. And they’re much faster, make fewer mistakes, and can handle thousands of contracts without burning out. That’s AI contract review.
2022
- (Schnetzer, 2022) ⇒ Nicole Schnetzer (2022). "Automated Contract Review: AI is the Future". In: Legartis Blog.
- QUOTE: Automated contract review is an AI-supported application, which analyses a contract clause by clause and structures the results for the user. The software guides the user through the contract review and gives instructions on how to deal with clauses, which are not in conformity with the company. The review and analysis takes place within seconds and delivers meaningful and precise results. Automated contract review is based on the use of artificial intelligence (Legal AI), which is pretrained and is continuously trained with new types of contracts and data sets. The AI is therefore always up to date and well prepared to review numerous types of contracts. The AI can currently draw on the knowledge of hundreds of contracts and uses pre-defined clusters, in order to achieve the highest possible level of accuracy when reviewing.
2021
- (Bechor, 2021) ⇒ Noory Bechor (2021). "Demystifying AI-powered Contract Review Solutions - The Case for Managed AI". In: The LawGeex Blog.
- QUOTE: To provide some valuable context, LawGeex began seven years ago with the vision to automate the contract review process so that legal teams would be able to completely delegate this type of routine review work to technology, thereby freeing up their time to work on more strategic initiatives. After working with many clients over the years, we realized that the level of accuracy and customization required to delegate entirely to a machine was not quite the right approach. Our experience has taught us that AI alone is not yet sophisticated enough to handle the complex nature of contracts. As is the case with many other fields (e.g., autonomous vehicles, manufacturing robots, creditworthiness, etc.), and with many advanced, well-known AI-based applications including Facebook and Google, actual humans are required to close knowledge gaps and properly train the AI until technology reaches the desired level of maturity.
This realization allowed us to move from an AI-only model to that of “Managed AI”, combining the capabilities of both artificial intelligence and human expertise. This model delivers more accurate results and empowers clients to truly delegate their contract work with complete confidence.
- QUOTE: To provide some valuable context, LawGeex began seven years ago with the vision to automate the contract review process so that legal teams would be able to completely delegate this type of routine review work to technology, thereby freeing up their time to work on more strategic initiatives. After working with many clients over the years, we realized that the level of accuracy and customization required to delegate entirely to a machine was not quite the right approach. Our experience has taught us that AI alone is not yet sophisticated enough to handle the complex nature of contracts. As is the case with many other fields (e.g., autonomous vehicles, manufacturing robots, creditworthiness, etc.), and with many advanced, well-known AI-based applications including Facebook and Google, actual humans are required to close knowledge gaps and properly train the AI until technology reaches the desired level of maturity.