Legal Tech News & Contract Management Tips | LexCheck Blog

The Contract Negotiation Process Streamlined by AI

Written by Gary Sangha | Founder & CEO | Feb 11, 2021 11:06:34 PM

What legal team, if given the opportunity, would not take steps to optimize their contract negotiation process to potentially save up to 90 percent of the time spent reviewing contracts? While such a drastic efficiency improvement might sound like far-off fiction, early adopters of Artificial Intelligence (AI) contract negotiation platforms are realizing these staggering results.


By transitioning to AI Digital Playbooks, those legal departments reduced review time and human error while improving clarity and adherence to playbook guidance. As a result, AI-powered solutions have transformed contract negotiations by orders of magnitude, in some cases turning weeks into days and days into hours.

Corporate legal departments that have implemented AI technologies have enabled attorneys to spend more time closing complex deals instead of conducting mundane and routine document review. Business teams and legal departments have discovered a new form of organizational agility by streamlining the contract negotiation process with AI.

Reduce Time Spent Negotiating

The contract negotiation process can be time-consuming, as back-and-forth discussions can stretch over weeks. Aberdeen and Forrester Research found that the average approval cycle takes around three and a half weeks; integrating AI into the contract negotiation process can reduce this timeline to a matter of days. 

How an AI Contract Negotiation Platform Reduces Negotiation Time

  • Highlights clause changes and conducts version comparisons
  • Saves a repository of past and present contracts that AI uses to “learn” your language
  • Flags varying provisions and outliers that most likely need amending
  • Generates “best practices” templates based on previously approved contracts
  • Harnesses AI-powered, historical data and contracting insights to negotiate win-win deals
  • Defines specific, acceptable negotiation boundaries, limits, and thresholds
  • Checks cross-references and defined terms not used
  • Aligns procurement, vendor, and legal around commonly accepted standards
  • Mitigates risk by automatically highlighting stand-out clauses outside playbook standards
  • Provides completely transparent versions of contract changes

AI solutions bring unprecedented speed, agility, and efficiency to the contract negotiation process that dramatically shortens the interval from contract creation to signature. Review, negotiation, and markup cycles occur in near real-time.

Create Consistency

Contract reviews are prone to inconsistencies and human errors when playbook standards are either missing or unenforced. Most legal departments maintain analog playbooks but rely upon staff members to manually review checklists and self-diagnose inconsistencies. To ensure contracts remain within defined parameters, oversight is typically necessary. Still, reviewers often fail to discover discrepancies in the contract language until it is too late.

Digital Playbooks and AI tools efficiently assess contracts on first look, scanning instantly for alignment and flagging deviations. This guidance system reduces the need for expensive post-execution internal diligence processes, such as the analysis of force majeure clauses that many organizations undertook during the COVID-19 crisis. By levering AI and machine learning, legal departments can more easily develop consistency throughout the contract review and negotiation process. 

Clarify Language

Vague language and ambiguity create contract negotiation bottlenecks and require time-consuming revisions that deplete valuable resources. While most AI platforms provide quality checks and flag problems, less powerful platforms have a limited capacity to make changes to contracts because they cannot integrate suggestions directly into the contract. 

The most powerful contract negotiation platforms mimic a real attorney’s contract review and negotiation process. Advances in machine learning and natural language processing have enabled the most innovative technologies to, in a matter of minutes, perform the actual contract revisions in line with a Digital Playbook.

Optimize and Adapt for Future Negotiations

AI Digital Playbooks empower legal departments to improve their contract negotiation processes by collecting metrics and adapting to new circumstances.

How an AI Digital Playbook Builds New Metrics and Adapts 

  • Identifies sticky playbook rules or template clauses associated with signing delays
  • Offers new playbook rule suggestions derived from the analysis of “extra-playbook” trends
  • Encourages flexible playbook development that can accommodate regulatory framework changes.

Contract Negotiations: The AI Advantage

AI-powered contract negotiation platforms leverage predictive information, historical data, and automated workflows to streamline the contract negotiation process and close deals faster. Advanced platforms familiar with common contract types out of the box can be trained to an organization’s specific playbook guidance with minimal training samples. In addition to transforming legal departments to leaner and more efficient contract negotiations, AI Digital Playbooks adapt with your organization as industry and regulatory landscapes change. 

To learn how LexCheck’s AI-powered contract negotiation platform can streamline your contract negotiation processes and dramatically reduce the interval from contract creation to signature, request a demo or reach out to us at sales@lexcheck.com.