AI Contract Review Software in 2025 (Complete Guide)

Manual contract review takes up a lot of time—too much, really. The 2023 Enterprise Legal Management Report found that in-house counsel spends an average of 4.5 hours every day manually reviewing contracts.

That’s nearly half the workday spent combing through clauses and double-checking for risks.

AI contract review software is changing how legal teams handle this. It automates the repetitive, time-consuming tasks so legal professionals can focus on the decisions that actually matter.

Whether you’re juggling a handful of contracts or drowning in a backlog, this technology makes the process faster, easier, and less stressful.

This guide breaks down what AI contract review software does, how it works, and why it’s a must-have for busy legal teams. If you’re looking for a better way to get through your contracts, keep reading.

What is AI Contract Review Software?

AI contract review software is a modern solution for legal and business teams that deal with a high volume of contracts. It uses artificial intelligence to quickly analyze documents, identify key clauses, flag potential risks, and even suggest revisions.

Instead of spending hours buried in paperwork, you can tackle contract reviews more efficiently and with greater accuracy.

Here’s how it works: the software scans your contracts, compares clauses to preferred contract positions (sometimes called a contract “playbook”), identifies critical information, and highlights language that does not comply with the preferred positions.

Does this mean lawyers are no longer needed? Definitely not. AI does not replace human expertise—it complements it. Legal professionals still need to review the flagged issues and make judgment calls, but they’re no longer bogged down by tedious, repetitive tasks.

In fact, according to Gartner, AI-based contract analytics solutions can reduce the manual effort needed for contract review by 50%. That’s a huge time-saver for law firms and corporations managing complex workflows.

How Does Contract Review Software Work?

We’ve already given you a quick overview of what AI contract review software does, but let’s dig a little deeper into how most AI contract review tools work.

When you upload a contract, the software uses artificial intelligence to read and understand the text. Here’s what happens step by step:

1. Document analysis: The software first analyzes the structure of your contract, breaking it down into sections like clauses, terms, and conditions.
2. Key clause identification: It then identifies critical clauses, such as termination terms, confidentiality provisions, or indemnity clauses, so you can easily find what you need.
3. Risk detection: AI flags anything unusual, like deviations from standard language, potential compliance issues, or missing terms that might lead to disputes.
4. Suggestions and alerts: Based on its analysis, the tool suggests revisions, highlights areas needing legal review, and even ranks risks by severity.
5. Export and collaboration: Once the review is complete, you can export the updated document or share it with your team for further discussion or approval.

The beauty of this process is that it’s fast and thorough, cutting down on time and reducing the likelihood of errors. While the AI handles the groundwork, it’s still up to legal experts to review the flagged areas and make informed decisions.

This combination of speed and accuracy makes contract review software a practical choice for businesses and legal teams alike.

What Are The Benefits of Using AI to Review Contracts?

Reviewing contracts manually can feel like running on a hamster wheel—repetitive, time-consuming, and draining. But with AI contract review software, you can leave the tedious tasks behind and focus on more important work. 

Here’s what AI-powered contract review solutions can do for you:

It Saves Time Like Nothing Else

Let’s face it—manual contract review is a slog. Sifting through pages of legal jargon can eat up hours, especially when you’re dealing with large volumes.

AI steps in to handle the heavy lifting by analyzing contracts in minutes. That means you can spend less time stuck in the weeds and more time focusing on value-adding tasks.

It Can Augment Human Expertise

Even the most skilled legal experts can miss a detail under time constraints. With AI working alongside you, it becomes a powerful second set of eyes. 

It flags potential risks, highlights missing clauses, and makes sure no small detail is overlooked—all while keeping you in control. By combining human expertise with AI precision, you get the best of both worlds: reliability and oversight.

It Cuts Costs Without Cutting Corners

Every hour spent reviewing contracts costs money, whether it’s your time or billable hours from outside counsel.

AI reduces that workload, which can lead to significant savings. You’re not just saving time—you’re saving money, too.

It Keeps You on the Right Side of Compliance

Laws and regulations change constantly, and keeping up can feel like a full-time job. AI tools are programmed to know the latest standards, helping you avoid compliance headaches. 

It flags anything that might raise a red flag, so you’re always in the clear.

It Delivers Consistent Results Every Time

When people review contracts, the results can vary. One person might focus on certain clauses, while another might overlook them entirely.

That’s not an issue with AI. It approaches every contract with the same level of detail and precision, applying consistent logic throughout. This eliminates the guesswork and makes sure nothing gets overlooked.

Whether it’s the first contract of the day or the fiftieth, AI maintains the same standard, so you can have peace of mind.

It Grows With Your Business

Managing a handful of contracts? Easy. Dealing with hundreds or even thousands? AI handles it effortlessly. Small businesses and large corporations alike can rely on these tools to adapt as their workload increases.

The software scales smoothly, accommodating your growing needs without losing efficiency. It’s a flexible solution that works just as well for a startup as it does for a global enterprise, so you’re always prepared no matter how your business expands.

It Frees Up Your Team for Bigger Tasks

Nobody loves spending hours stuck in contract details, and with AI, your team doesn’t have to. The software handles the repetitive stuff so your team can focus on what really matters—like building stronger client relationships, solving bigger problems, or planning your next big move.

It takes the busywork off their plate and gives them more time to tackle the tasks that need their attention. It’s not just about saving time; it’s about letting your team do what they’re best at without getting bogged down in the fine print.

Do AI Contract Review Tools Have Limitations?

As great as AI contract review tools are, they’re not perfect. Knowing what they can and can’t do helps you use them more effectively.

They Don’t Always Get Context

AI is awesome at breaking down text, but it doesn’t always understand the full story. Contracts can have nuanced language or specific terms that require a lawyer’s judgment. The AI might flag something, but it’s up to you to decide if it’s actually an issue.

The Training Matters

How well an AI performs depends a lot on what it was trained on. If it hasn’t seen contracts like yours before, it might miss some things or give overly cautious suggestions. This doesn’t mean it’s bad—just that it might need a bit of backup.

You Still Need a Human Touch

AI isn’t here to replace legal experts. It’s here to make their lives easier. You’ll still need someone to look at the flagged items, make decisions, and make sure everything works for your specific situation.

Tricky Contracts Can Trip It Up

For standard contracts, AI shines. But when things get overly technical or unique, it might need a bit more help. It’s great for the bulk of the work, but complex agreements may still require a closer look.

Bottom line? AI is a powerful tool, but it’s not a magic solution. Pairing it with human expertise is the best way to get reliable results.

How Percipient Uses AI to Make Contract Review Easy

At Percipient, we know contract review can be a grind—especially when you’re dealing with stacks of agreements. That’s why we’ve created a process that blends powerful AI with human expertise to take the stress out of it. Here’s how it works:

Step 1: Tailored Onboarding

We don’t just hand you a tool and hope it works. First, you tell us exactly what you look for in a contract exactly what you need.

What are your preferred clauses? What’s in your playbook? This step lets us customize our AI to align perfectly with your organization’s standards so the results fit like a glove.

Step 2: Initial AI Analysis

Once everything’s set up, our AI contract redlining software gets to work. You send contracts our way via email, Slack or Jira. It scans your contracts, compares them to your predefined standards, flags anything that might be an issue, and even suggests edits based on the preferences you’ve shared.

It also captures all the important metadata so you can push it straight into your contract management system.

Step 3: Expert Legal Review

Here’s where the magic really happens. After the AI finishes its job, our team of experienced legal professionals steps in. They review the AI’s suggestions, validate the edits, and tackle any complex issues the software might not fully grasp.

Step 4: Collaborative Feedback Loop

Once the review is complete, we send everything back to your team. You’ll get the redlines, detailed explanations, and everything you need to quickly assess and finalize the document. If there’s anything that needs tweaking, it’s easy to adjust before locking things in.

Why This Process Works

The secret sauce here is the combination of smart technology and human know-how. AI handles the repetitive stuff and gives you a head start while our legal experts make sure everything checks out.

The result? A faster, more accurate process that frees up your team to focus on bigger things.

Should You Integrate AI Into Your Contract Review Process?

If your team is constantly swamped with contracts, AI might be exactly what you need. It speeds up the review process by scanning documents, flagging risks, and suggesting edits, giving your team the time to focus on more strategic tasks. It’s efficient, accurate, and great for handling large volumes of contracts.

But let’s be real—AI isn’t for everyone. If your business deals with a small number of contracts or highly complex, one-of-a-kind agreements, traditional methods might still be your best bet.

AI works best when there’s consistency, like reviewing NDAs or standardized vendor agreements. For unique or heavily nuanced contracts, you’ll still need that hands-on human touch.

So, is it the right move for you? If you’re managing high volumes, working under tight deadlines, or want to reduce the manual workload, AI can make a big difference. However, if your contracts are few and far between or require deep, contextual analysis, you might not get the full benefits.

At the end of the day, AI is a tool, not a replacement. It’s all about finding the balance between what technology can do and what your team excels at.

Percipient Can Eliminate Your Contract Review Bottlenecks

Reviewing contracts can be exhausting, especially when 89% of businesses are dealing with large volumes of simple agreements. It’s a lot of repetitive admin work that eats up time and keeps teams from focusing on bigger priorities.

Percipient makes things easier by combining AI technology with expert legal review. The AI handles tasks like scanning contracts, flagging risks, and identifying key clauses. Then, legal professionals step in to take care of the more complex details and make sure everything is accurate and ready to go.

With tailored onboarding and a collaborative feedback system, the solution fits seamlessly into your team’s workflow. It helps reduce repetitive tasks, speed up the process, and let your team focus on higher-value work.

For businesses looking for a simpler, more efficient way to handle contracts, Percipient provides the tools and expertise to get it done without the stress.

Book a call today and see how it works!

FAQs About Contract Review Software

Can AI review a contract?

Yes, AI can review contracts by analyzing the text, identifying key clauses, flagging potential risks, and suggesting edits. It’s a great tool for speeding up the contract management process and reducing human error, but it works best when paired with legal expertise to handle nuances and complex issues.

Can ChatGPT review a contract?

ChatGPT can assist with reviewing a contract by summarizing sections, explaining complex legal language, or answering questions about the content. However, it’s not a dedicated contract review tool and lacks the specialized features of AI solutions built specifically for legal document analysis.

How much does a contract review cost?

The cost of a contract review varies depending on who performs it. AI contract review tools often charge a monthly subscription fee, starting around $50 for basic plans. Manual reviews by lawyers can easily start at $500 an hour, depending on complexity. 

Can AI review legal documents?

Yes, AI contract review solutions can review legal documents, including legal and business contracts, by analyzing their content for risks, compliance issues, and key clauses. It’s particularly useful for handling standard or high-volume documents efficiently, but complex legal documents may still require a human touch for interpretation and decision-making.