Although contracts comprise the foundation for many important B2B and B2C relationships, millions of hours are wasted each year reviewing them manually.

In 2021, the Associate Corporate Counsel reported that legal tech is “no longer nice to have, but a must have.” Their survey cited 61% of legal operations professionals who considered contract management tools as “the most effective” area of technology application from a list of 14 areas of improvement. 

AI underlies many of the world’s most innovative IT products, including document review platforms. Global spending on artificial intelligence (AI) solutions will surpass $500 billion by 2023, according to the International Data Corporation. And that number is expected to continue its upward trajectory in the years to follow. Here’s why.

Pain Point: Human Review is Slow.

The average contract takes a human 92 minutes to review, according to Law Technology Today. Considering PricewaterhouseCoopers has anywhere from 20,000 to 40,000 active contracts at any given time, the total amount of required manpower would amount to 3,680,000 hours.

Pain Point: Human Review is Costly.

The next logical issue with human review is expense. In the U.S., the average salary for a junior-level attorney is $74,143. Of course, a large and prestigious company like PricewaterhouseCoopers pays more — to the tune of $86,380 per year — but the expense of paying employees to comb through contracts becomes untenable at scale. 

Pain Point: Human Review is Risky. 

Human error can be tremendously costly. The Maine Legislature, for example, settled for $5 million with three dairy delivery drivers in 2014. The culprit? An omitted Oxford comma in the overtime law. An incorrect date, name omission, or vaguely worded clause can spell disaster for a company. Humans are prone to errors and can fall victim to fatigue, stress, inexperience, or poor training.

Pain Point: Human Review is Boring. 

The Great Resignation has made turnover an issue everywhere, and the legal industry’s 17% annual churn rate has been an issue for years. When legal tasks are dull and repetitive, employee morale plummets and junior-level attorneys — who are often tasked with much of the initial review work — seek work elsewhere. This continuous, revolving door of employees makes it difficult for legal departments to ensure business adherence and consistency.

A Modern Solution: AI Document Review

In the past five years, rapid technological advances in the legal sphere have made the process of completing document review with AI as easy as sending an email. To get started, corporate legal departments can upload their playbooks and a dozen contract samples to their AI review platform.

When a new draft is added, the platform reviews, compares, redlines, assesses risk, suggests revisions, adds contextual notes, and completes pre-programmed edits based on customized “if/then” rules implemented by the user. Minutes later, the user receives an email notifying him or her that the contract has been reviewed. All suggested changes can be implemented with a click of a button.

Humans will always be involved in the final step of the contract review process, but relying on AI to complete most of the initial legwork can free up your time and help you focus on more fulfilling and value-adding duties.

In summary, AI document review is:

• Faster: Instead of spending 92 minutes or more on review, AI requires less than five.

• Cheaper: Instead of paying multiple annual salaries, one product works forever.

• Safer: Instead of committing errors due to fatigue or carelessness, AI performs consistently. 

• Better: Instead of performing dull work, attorneys engage in more rewarding day-to-day tasks.

Ernst & Young found that document intelligence solutions on average reduced document review and processing times by 90%, costs by 80%, and risk by 20%. At the same time, legal departments can increase processing accuracy by 25% and consistency by 50%.