Contracts are where most in-house legal teams see AI value first, because contract work is high-volume, text-heavy and often follows a playbook.
What AI does well with contracts
- Clause identification and extraction: find the governing law, limitation of liability, termination, auto-renewal, change of control or data protection clauses across hundreds of contracts and put them in a table.
- Playbook review: compare an incoming third-party paper against your standard positions and flag deviations with suggested fallback wording.
- Summaries for the business: a one-page "what you signed up to" for the commercial owner.
- First drafts: NDAs and simple agreements from your templates.
- Portfolio questions: "Which supplier contracts let us terminate for convenience?" for M&A, renegotiation or regulatory change.
Where to be careful
- Playbooks first. AI reviews against your standards only if you have written them down. Many teams find the playbook is the real project.
- Unusual drafting. AI is weaker on bespoke or badly drafted clauses, defined terms that change meaning and cross-references.
- Missing clauses. Detecting what isn't there (no data protection clause at all) needs explicit checks.
- Confidentiality. Counterparty contracts often include NDA restrictions on sharing; check your tool's terms.
A simple workflow
Upload → AI extracts and flags against the playbook → lawyer reviews flags and edits → business summary → signature. Measure turnaround time and the share of contracts handled without escalation.