How AI Legal Document Review Works

How AI Legal Document Review Works

Publish date
Nov 28, 2024
AI summary
AI legal document review enhances efficiency and accuracy by automating the analysis of contracts and legal documents, utilizing natural language processing and machine learning to identify key information, risks, and compliance issues, ultimately saving time and reducing costs for legal teams.
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Consider pouring over stacks of legal documents, trying to make sense of all the complex jargon without missing any essential details. Not only is this process tedious, it’s also stressful and can lead to costly mistakes. Thankfully, there’s a new way to tackle legal document review, and its promise only gets better with time. In this guide, we’ll unpack AI for legal documents review, how it works, and its benefits to help you get started.
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AI Legal Document Review
AI Legal Document Review
AI legal document review is a technology-driven process that leverages artificial intelligence to automate and enhance the analysis and management of legal documents. By utilizing advanced machine learning algorithms and natural language processing, these systems can quickly scan, interpret, and classify the content within contracts, agreements, compliance materials, and other legal documents.
This approach contrasts traditional manual reviews, which are time-intensive and prone to human error. Instead, AI solutions provide unparalleled speed, accuracy, and scalability, making them an invaluable asset for legal teams. These tools identify crucial information like clauses, terms, and risks and streamline tasks such as due diligence, contract management, and regulatory compliance.
AI-based document review systems are widely used in:

Contract Analysis

I am extracting key clauses and identifying deviations from standard templates.

Litigation Support

Reviewing discovery documents to identify relevant evidence.

Regulatory Compliance

Ensuring contracts meet specific industry standards or legal requirements.

Risk Management

Highlighting ambiguous or high-risk terms in agreements.
The demand for efficient document review solutions is growing in a fast-paced legal environment. Whether handling mergers and acquisitions or ensuring compliance with evolving regulations, AI tools empower legal teams to manage extensive workloads more precisely.
AI Legal Document Review
AI Legal Document Review
AI legal document review uses artificial intelligence technology to analyze legal documents. During a typical contract review, a lawyer will read through a document to identify relevant information, flag potential issues, and make notes for further review. An AI legal document review tool runs a document through a similar process, but it does so in a fraction of the time it would take a human. First, the AI scans the document for machine-readable text. Then, it categorizes the document, extracts relevant details, and analyzes the contents to identify issues or areas that require further review. Finally, it presents its findings to human users for validation.
At the heart of AI legal document review are two primary technologies: Natural Language Processing (NLP) and Machine Learning (ML). These technologies enable AI systems to understand, interpret, and learn from large volumes of legal text.

Natural Language Processing (NLP)

NLP is a field of AI focusing on the interaction between computers and human languages. It enables AI systems to interpret and process human language in a way that makes it understandable to machines. In the context of legal document review, NLP allows AI systems to:

Extract key information

Identify clauses, dates, parties involved, payment terms, and other relevant details from contracts.

Understand context

Understand the intent behind the language used in legal documents, including identifying ambiguous or contradictory terms.

Classify and tag

Classify legal documents according to their type (e.g., contract, non-disclosure agreement, employment agreement) and tag specific clauses or provisions for further review.

Machine Learning (ML)

Machine learning refers to the ability of AI systems to improve and adapt through experience. In the case of legal document review, machine learning algorithms are trained on large datasets of legal documents to:

Identify patterns

Learn from previously reviewed documents to automatically flag potential issues or discrepancies.

Automate repetitive tasks

Automate routine document review tasks, such as checking for missing signatures, standard clauses, or non-compliant language.

Predict outcomes

In some advanced applications, AI systems can even predict the potential legal consequences or outcomes based on patterns seen in historical data.

AI Document Review Process: Step-by-Step

1. Document Ingestion

The first step in AI legal document review is ingesting documents into the system. Documents can come from various sources, such as PDFs, Word documents, emails, or even scanned images. AI systems are designed to handle multiple formats, converting them into machine-readable text.

2. Pre-Processing

Pre-processing involves cleaning and organizing the data for more straightforward analysis. This step includes removing irrelevant content (e.g., headers, footers), correcting text encoding issues, and identifying document structure (e.g., sections, clauses).

3. Document Categorization

The AI then classifies the documents based on their type. For example, it may categorize a document as an NDA, employment agreement, or corporate charter. Categorization is essential because different document types require different review criteria.

4. Content Extraction

AI then extracts critical data from the document, such as names, dates, amounts, parties involved, and specific clauses. It can also identify standard terms and clauses like confidentiality clauses, indemnity clauses, and dispute resolution terms.

5. Analysis and Flagging

Once the document is categorized and its content extracted, AI algorithms analyze the text to identify discrepancies, inconsistencies, or potential legal risks. For example, the AI might flag non-standard clauses, missing signatures, or ambiguous language that could pose a risk. It can also compare the document against a database of legal precedents or industry standards.

6. Human Review and Feedback

After the AI completes its analysis, the results are typically passed to human reviewers who validate the findings. While AI can handle much of the heavy lifting, human lawyers must make final decisions. Feedback from human reviewers can be used to improve the AI system’s accuracy over time, making it more effective for future reviews.

Speed and Efficiency

AI can review thousands of documents in a fraction of the time it would take a human lawyer, freeing up time for other tasks.

Cost Savings

By reducing the need for manual labor, AI can significantly lower the cost of legal document review, making it more accessible for businesses of all sizes.

Accuracy

AI reduces the risk of human error by ensuring consistency and precision in the review process.

Scalability

AI can quickly scale to handle large volumes of documents, essential for law firms or in-house legal teams handling large-scale M&A deals, litigations, or compliance reviews.

Mergers & Acquisitions (M&A)

In M&A transactions, AI can help identify and extract critical terms from legal documents such as contracts, financial statements, and compliance reports. By quickly analyzing these documents, AI can help identify potential risks and streamline the due diligence process.

Litigation Support

AI sifts through large volumes of discovery documents in litigation to identify relevant evidence. AI systems can flag potentially important documents, emails, or communications, enabling legal teams to focus on the most essential materials.

Contract Management

AI can assist with managing the lifecycle of contracts, from drafting to execution. It can ensure that all contractual obligations are being met, alerting legal teams when renewal dates are approaching, or terms are not being followed.
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AI Legal Document Review
AI Legal Document Review
Choosing the right AI legal document review tool doesn’t have to be complicated. Start by defining your goals for the legal document review process.  For instance, are you looking for a faster way to process documents? Or do you want to improve the accuracy of your reviews? Perhaps you want to automate the process to reduce the time your team spends on manual document review. No matter the case, having clear objectives will help you hone in on the right solution for your needs.

What Document Types Will You Be Reviewing?

Legal documents come in all shapes and sizes. AI tools help legal teams quickly process and review documents from contracts to litigation materials. However, some solutions may specialize in certain documents or work better with particular formats. Before selecting an AI document review tool, it’s crucial to understand which documents you’ll be working with.
For example, if you’re conducting a contract review, you may want a tool with a proven track record in improving contract review processes. On the other hand, if you’re sorting through thousands of court filings for a litigation matter, you’ll want a tool that can help you efficiently organize and analyze large volumes of documents accurately.

How Many Documents Will You Be Reviewing?

In addition to understanding the types of documents you’ll be working with, it’s also essential to consider the volume of documents you’ll be reviewing. If you’re handling large volumes of documents, a scalable AI solution may be necessary to process thousands or even millions of files. A simpler, more cost-effective solution may be sufficient for smaller projects or teams.

What Level of Accuracy Do You Need?

Accuracy is a critical factor to consider when selecting an AI document review tool. After all, any AI solution aims to improve the speed and accuracy of processes to reduce human error. Some tools are more accurate at flagging specific clauses, while others provide a broader scope of analysis. The accuracy of AI tools varies, and you should decide how much manual oversight you’re willing to commit based on the criticality of the documents being reviewed.
Once you’ve established your specific needs, the next step is evaluating the features of the available tools. Key features to look for include:

Document Categorization and Organization

AI tools should automatically categorize documents based on type (e.g., contract, non-disclosure agreement, or employment contract). The system should also be able to organize documents by relevant clauses, dates, and other important information, making it easier for legal teams to navigate the document pool.

Data Extraction and Clause Recognition

A robust AI legal document review tool should be capable of identifying and extracting critical information, such as clause types, dates, terms, and signatures. For example, the tool should flag important provisions like indemnification clauses, confidentiality agreements, or liability clauses.

Risk Identification and Alerts

The ability to automatically identify potential risks, such as non-compliant clauses or ambiguous language, is crucial. AI tools should alert users to issues requiring human review and may offer suggestions for risk mitigation.

Machine Learning and Continuous Improvement

AI tools should continuously improve accuracy by learning from user feedback and previous reviews. The more documents the system processes, the more effective it should become over time. Look for tools with machine learning features that can adapt and improve the tool’s capabilities based on your specific document set and review goals.

Collaboration and Review Workflow

Collaboration features are essential for law firms and legal teams working together on document reviews. Look for tools that provide smooth integration with your team’s workflow, such as shared document review platforms, tracking changes, and giving feedback directly within the tool.

Usability and Integration with Existing Tools

When selecting an AI document review tool, ensure it is easy to use and integrates well with your existing systems, such as document management platforms, contract management software, and cloud storage solutions. Some tools offer user-friendly interfaces that minimize your team's learning curve, while others may require more technical expertise.

Integration is key

the tool should work well within your existing tech stack. For example, does the AI system integrate with tools such as Microsoft Office, Google Docs, or SharePoint? Does it support cloud-based solutions, enabling remote access and real-time collaboration?

Vendor Reputation and Support

Since legal document review is a critical function, the reputation of the AI tool provider matters significantly. Choosing a vendor with a proven track record in the legal tech space is essential. Review customer testimonials, case studies, and product reviews to gauge how the tool has worked in real-world scenarios.
Additionally, support is crucial, especially when dealing with complex legal documents. Choose a vendor that offers comprehensive customer support, including training, troubleshooting, and technical assistance. Having a reliable support team on hand will ensure that your team can resolve any issues quickly and maintain the efficiency of the review process.

Cost and ROI

Finally, when selecting an AI legal document review tool, it is essential to evaluate the cost-to-benefit ratio. Consider the pricing structure: Is it subscription-based, pay-per-use, or based on the volume of documents reviewed? Some AI tools may offer competitive pricing for smaller firms or teams, while others may cater to large enterprises with more comprehensive features.
You’ll also want to analyze how the tool can save time and money in the long run. Will it help reduce manual labor, speed up document processing, and lower costs associated with human error or extensive review processes? Consider conducting a trial run or pilot project to evaluate whether the tool’s benefits justify its price.
PDF.ai is the ultimate ChatPDF app, enabling you to interact with any PDF using AI. We also offer an API for smooth integration into your application. Get answers from the PDF, ask for a summary, extract the data, and find anything you need.

Features

PDF.ai helps to quickly extract, summarize, and interact with information in PDFs without manually reading through them. We enable users to ask questions, get summaries, and find specific details instantly, saving time and improving productivity, especially when dealing with lengthy or complex documents. Get started for free today with our AI PDF reader!
AI Legal Document Review
AI Legal Document Review
PDF.ai is the ultimate ChatPDF app, enabling you to interact with any PDF using AI. We also offer an API for smooth integration into your application. Get answers from the PDF, ask for a summary, extract the data, and find anything you need.

Features

PDF.ai helps to quickly extract, summarize, and interact with information in PDFs without manually reading through them. We enable users to ask questions, get summaries, and find specific details instantly, saving time and improving productivity, especially when dealing with lengthy or complex documents. Get started for free today with our AI PDF reader!

2. Kira Systems: The Smart Contract Review AI

AI Legal Document Review
AI Legal Document Review
Kira is an AI contract analysis tool that specializes in helping law firms and legal teams quickly and accurately review contracts and other legal documents. Its machine-learning algorithms recognize legal documents' clauses, obligations, and key information.

Key Features

  • Fast Clause Extraction: Kira can extract important contract provisions such as termination clauses, payment terms, and confidentiality agreements, saving significant time.
  • Customizable Models: Kira's AI engine can be tailored to specific needs, making it highly adaptable for different types of legal documents.
  • Collaborative Features: Multiple users can access and collaborate in real-time, adding comments or making changes directly within the tool. Kira is especially beneficial for due diligence and contract review, enabling firms to process contracts faster and more accurately than traditional manual methods.

3. LawGeex: AI Contract Review for Compliance and Risk Management

AI Legal Document Review
AI Legal Document Review
LawGeex uses AI to automate the contract review process, enabling legal teams to quickly compare and evaluate legal documents. It’s designed to assist in reviewing contracts against company policies and ensure compliance with regulatory standards.

Key Features

  • Pre-Defined Legal Standards: LawGeex has an extensive library of predefined templates and legal clauses that it can use to compare incoming documents.
  • AI-Powered Risk Detection: The system flags clauses that deviate from the organization’s established standards or expose the firm to risks.
  • Ease of Use: LawGeex is designed to be user-friendly, making it an excellent option for firms that want to leverage AI without complex integrations. LawGeex offers fast and effective contract reviews for companies with large-scale contract processing needs, especially for corporate legal departments.

4. eBrevia: AI for Contract Review and Due Diligence

AI Legal Document Review
AI Legal Document Review
eBrevia leverages AI to simplify contract review and due diligence. Using natural language processing (NLP), eBrevia can extract key terms, clauses, and provisions from various legal documents, helping streamline workflows and reduce the burden on legal professionals.

Key Features

  • Due Diligence Automation: eBrevia is optimized for reviewing large batches of documents, which is particularly useful in M&A transactions.
  • Document Summarization: The AI extracts critical information from documents, providing concise summaries that save time.
  • Customizable Review Models: Tailor the system to focus on particular clauses or document types relevant to your firm. eBrevia’s intuitive platform and deep integration with other document management systems make it a good choice for small and large enterprises.

5. Luminance: AI for M&A Document Review

AI Legal Document Review
AI Legal Document Review
Luminance utilizes AI to assist with document review, especially in mergers and acquisitions. Applying pattern recognition algorithms can analyze legal documents and identify anomalies, providing immediate insight into potential issues.

Key Features

  • Advanced Pattern Recognition: Luminance’s AI can spot patterns and variations in legal language, even when working with complex contracts.
  • Intelligent Search and Filtering: Easily search and filter through vast amounts of legal documents, allowing for quick identification of relevant content.
  • Document Comparison: Luminance offers tools to compare multiple document versions, highlighting key changes or differences. Focusing on M&A due diligence and contract review, Luminance is highly regarded for its ability to analyze complex documents efficiently, helping legal professionals find risks quickly.

6. ContractPodAi: AI for the Entire Contract Lifecycle

AI Legal Document Review
AI Legal Document Review
ContractPodAi uses AI to simplify and automate the entire contract lifecycle, from creation and review to compliance management. It's beneficial for in-house legal teams, enabling them to review and analyze contracts without needing external legal counsel for every agreement.

Key Features

  • Contract Repository: Store and categorize contracts in a central repository accessible to authorized users.
  • AI-Assisted Review: Automatically review contracts, identify potential issues, and suggest revisions based on predefined legal standards.
  • Collaborative Workflow: Legal teams can collaborate efficiently on contracts, enabling faster reviews and approvals. ContractPodAi is known for automating repetitive tasks and handling contract negotiation, making it a solid tool for in-house legal teams.

7. ThoughtRiver: Pre-Signing AI Contract Review

AI Legal Document Review
AI Legal Document Review
ThoughtRiver offers AI-driven document review for contracts and legal agreements. It focuses on pre-signature contract analysis to ensure all terms comply with legal standards and best practices before finalizing agreements.

Key Features

  • Risk Assessment and Suggestions: ThoughtRiver’s AI assesses contract risk and suggests amendments or edits.
  • Speed and Efficiency: The tool significantly reduces the time required to review contracts by identifying and addressing issues early in the process.
  • Integration Capabilities: Integrates with document management and collaboration tools to streamline the review process. For teams needing to assess contracts for risk management before signing, ThoughtRiver is a top choice, particularly for those focusing on high-risk agreements.

Try Our AI PDF Reader for Free Today

AI Legal Document Review
AI Legal Document Review
PDF.ai is the ultimate ChatPDF app, enabling you to interact with any PDF using AI. We also offer an API for smooth integration into your application. Get answers from the PDF, ask for a summary, extract the data, and find anything you need.

Features

PDF.ai helps to quickly extract, summarize, and interact with information in PDFs without manually reading through them. We enable users to ask questions, get summaries, and find specific details instantly, saving time and improving productivity, especially when dealing with lengthy or complex documents. Get started for free today with our AI PDF reader!