As AI tools reshape the legal landscape, one question is surfacing more than ever: Which contracts are best suited for AI-powered review?
It’s a critical consideration, especially for legal teams looking to optimize their workflows without sacrificing quality, risk mitigation, or commercial outcomes. AI can accelerate contract review, but it’s not a one-size-fits-all solution. Some agreements are ripe for automation. Others demand nuance and human oversight. Knowing the difference is the key to unlocking real efficiency gains.
The Best-Fit Contracts for AI Review
1. High-Volume, Low-Complexity Contracts
These are the clear winners. Think:
- NDAs
- DPAs
- Basic service agreements
- Vendor onboarding forms
- Intercompany agreements
These contracts are typically template-driven, short in length, and revolve around a finite set of issues (e.g., confidentiality carve-outs, data handling, liability caps). AI thrives in this space because the patterns are predictable, the clauses are standardized, and the stakes, while important, are usually manageable.
If your team spends hours reviewing cookie-cutter NDAs or supplier contracts, AI can cut that workload down to minutes.
2. Standardized Commercial Contracts with Negotiation History
Think:
- SaaS Agreements
- MSAs
- Reseller Agreements
- Partner Agreements
These are more complex than NDAs, but they’re often structured, modular, and repeatable, especially if your organization has its own playbook for how to review these. When paired with an AI playbook, AI can flag deviations from standard positions, identify non-compliant terms, and suggest redlines or explanations based on your preferred position and language.
These contracts benefit from AI not replacing the lawyer, but leveling up the first pass, freeing up time for strategy, not syntax.
3. Third-Party Paper Reviews
You didn’t draft it. You don’t control it. But you still need to review it, fast. Welcome to the world of:
- Customer contracts
- Partner-supplied MSAs
- Third-party procurement terms
These documents are risky by nature – you’re inheriting someone else’s language, assumptions, and definitions. AI is a powerful ally here. It can:
- Surface deviations from your standard positions
- Identify missing clauses
- Flag inconsistent defined terms and references
- Suggest revisions based on your playbook or general best practices
In a high-stakes deal or a time-pressured review, this functionality is more than convenience – it’s protection.
4. Contracts Subject to Regulatory or Policy Compliance
AI review is also ideal for contracts that must comply with specific regulatory, industry, or internal requirements:
- Employment contracts (e.g. inclusion of mandatory clauses)
- Clinical trial agreements
- Financial services vendor contracts
- Cross-border data sharing agreements
When integrated with a compliance playbook, AI ensures these contracts meet regulatory obligations and internal guardrails – automatically flagging gaps before legal or compliance teams get caught off guard.
Where AI Review Isn’t the Right Fit (Yet)
Some contracts are better left to human judgment or a hybrid approach:
- Heavily bespoke M&A agreements
- Complex joint ventures or strategic alliances
- Litigation settlements and term sheets
These contracts involve unique deal dynamics, judgment-heavy trade-offs, or strategic ambiguity – areas where today’s AI may miss nuance or make overconfident suggestions. That’s not a flaw. It’s a reminder that the most powerful use of AI is as a partner, not a proxy.
Key Takeaway: Start With Repeatable Risk
If you’re exploring AI contract review, don’t start with your toughest contracts. Start where AI performs best: repeatable documents with defined rules, known risks, and room for speed gains. Then scale.
The future of legal work isn’t human or machine. It’s human + machine, deployed strategically.
Ready to AI-power your contracts? Try it and cut review time by 70% – today.
Tags: NDA, Contract Review, AI, Standards
