AI-Powered Contract Review: Where Firms Actually Win

Most value in AI contract work comes from repeatability. If every review is a snowflake, you will struggle to standardise, measure or safely delegate anything to a model. But if you can turn your common reviews into a repeatable workflow, AI becomes a force multiplier rather than a risk.

This article sets out a practical contract review pattern for UK firms, aimed at small and mid-sized practices that deal with NDAs, supplier contracts and service agreements on a regular basis.

We will look at:

• where AI can safely help in contract review;
• the limits you should build into your workflow;
• how to set up clause libraries and playbooks; and
• a concrete step-by-step review process you can run inside a matter.

Start with a narrow slice

Trying to “AI all contracts” at once is a recipe for frustration. Instead, start with:

• one contract type (eg, a mutual NDA, a standard SaaS subscription, or a consultancy agreement);
• one governing law and jurisdiction; and
• a small set of commercial positions that your firm or client actually cares about.

For that initial slice, define:

• What good looks like – key clauses that must be present, unacceptable red flags, and preferred fallbacks.
• What you are willing to flex – caps, liability carve-outs, termination triggers, step-in rights.
• What you will never accept – for example, uncapped indemnities, broad IP assignments, or one-sided audit rights.

This gives you something concrete that AI can work with: it can’t decide your risk appetite, but it can help you apply it consistently.

Three building blocks for AI contract review

In most firms, the useful pieces are:

1. Triage – quickly understanding what type of document you are looking at and where it came from.
2. Clause extraction and comparison – pulling out relevant clauses and checking them against your playbook.
3. Variance and risk highlighting – spotting where the draft deviates from your preferred positions.

AI is best at the second and third stages. It can read long documents quickly, find patterns and point out non-standard wording. Your job is to decide what to do about those variances.

Step-by-step AI contract review workflow

Here is a simple workflow you can adapt.

1. Intake and scoping

For each new instruction, capture in your matter:

• contract type and counterparty;
• who owns the commercial relationship internally;
• any non-standard commercial asks (eg, unusual SLAs or pricing models);
• your client’s general risk appetite.

AI has a limited role at this point – it can help summarise background emails into a neat note, but you are still responsible for understanding what the client is trying to achieve.

2. Normalise the document

Wherever possible, work with editable text, not scanned PDFs. If necessary, use OCR first.

A model can then:

• identify the governing law and jurisdiction clauses;
• label clauses by topic (liability, indemnity, IP, data protection, termination, etc.);
• create a clause index – a list of headings with paragraph references.

This gives you a structured view rather than a wall of text.

3. Extract key clauses against your playbook

Maintain a simple playbook (it can be a spreadsheet or a matter template) that for each key topic sets out:

• preferred language or position;
• acceptable variations;
• red lines; and
• guidance on when to escalate to a partner.

Use AI to:

• pull out the relevant clause text for each topic; and
• produce a short comparison against your playbook:
  • “Matches preferred wording”
  • “Acceptable variation – [reason]”
  • “Red flag – [explain deviation]”

Crucially, the AI output is a starting point. You still read the clause and decide whether you agree with the categorisation.

4. Spot cross-document inconsistencies

AI is also useful at finding internal inconsistencies, for example:

• liability caps that do not match between limitation, indemnity and insurance clauses;
• different definitions of the same term in schedules and main body;
• SLAs that reference service levels not actually defined anywhere.

Ask the model explicitly to search for these patterns and summarise any issues. Then you can decide whether to amend, query or accept them.

5. Prepare a client-facing risk summary

For many clients, what they want most is a clear, business-friendly summary of:

• what the contract allows and requires them to do;
• the main legal and commercial risks; and
• where you recommend pushing back.

AI can help you:

• rephrase technical issues into plain English;
• restructure long notes into a short summary with headings; and
• produce variants – for example, a short email summary and a longer internal memo.

But again, you should always check that the nuances are correct: no model understands your client’s appetite or commercial context as well as you do.

Limits and safeguards

To keep AI contract review within safe boundaries:

• Never let AI sign off on a deal. A human solicitor should always approve the final mark-up or advice.
• Check for hallucinated references. Models sometimes invent clause numbers or case references – verify any authority on trusted sources.
• Be wary of training on client data. If you use client contracts to fine-tune models or build clause libraries, make sure you have the right permissions and data protection safeguards.

You may also want to define some “no-AI” zones, such as:

• highly bespoke, one-off contracts where no playbook exists;
• matters involving particularly sensitive subjects or vulnerable individuals;
• negotiations where political or reputational considerations dominate.

How OrdoLux can help

In OrdoLux, the aim is to:

• keep each contract review attached to its matter – including instructions, playbooks and AI-assisted notes;
• allow you to run consistent extraction and comparison workflows directly from the case file; and
• give you an audit trail of who did what, when.

That way, you can scale up repeatable contract work across the firm without losing visibility or control.

This article is general information for practitioners — not legal advice.

Looking for legal case management software?

OrdoLux is legal case management software for UK solicitors, designed to make matter management, documents, time recording and AI assistance feel like one joined-up system. Learn more about OrdoLux’s legal case management software.

Further reading

• Data Privacy & Confidentiality When Using AI in UK Law Firms
• AI in Legal Research: Precision Without the ‘Phantom Cases’