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Automated Contract Analysis: The State of Legal AI in 2023

Artificial Intelligence (AI) technology and automated contract analysis have developed rapidly  –  enabling cutting-edge work in legal departments across industries. 

More in-house teams are embracing AI than ever before. In an episode of Cockpit Counsel, Rob May warned that not all claims about AI technology are true. When assessing tech with AI, it’s important to know what type of AI it is, what it can do for your legal team, and how to implement it.

In 2023, more companies will adopt AI-powered tools. Many forward-thinking businesses will dream up ways to implement AI into their processes in order to do business faster.

Quick Overview of AI in the Legal Industry

AI is a “replication” of human intelligence, as human intelligence cannot truly be replicated in computers. While AI can execute complex programmatic calculations faster than a human, it doesn’t have the nuanced problem-solving capabilities that would allow it to function without a human, especially for legal teams. 

TLDR: AI cannot take over legal roles, but it can make legal pro’s jobs easier. 

AI automates, predicts, and categorizes contracts, enabling legal teams to uncover trends within their agreements. Adopted by law firms, the courts, and in-house counsel alike, legal AI gives legal teams a leg up when conducting processes like contract review, e-discovery, contract analytics, and litigation management. 

20 KPIs Every Team Should Track

3 Ways Legal Teams Use AI for Automated Contract Analysis

Legal teams use AI for all kinds of complex decision-making — not by letting the AI make the decisions for them, but by paying attention to and acting on the patterns that software reveals. 

Here are 3 ways legal teams can use AI for automated contract analysis.

1. Detecting Anomalies and Inconsistencies

It’s fairly common for some of your contracts to have variations of your terms. For example, some of your service agreements before 2020 may not have had a force majeure clause or had a light version of one. A bare-bones force majeure clause was okay in 2019, because who was expecting a global pandemic that locked down nations and cut off supply chains?

Machine learning and AI-powered tools enable legal teams to review contracts quickly and identify variations to standard terms in contracts. After detecting inconsistencies in agreement language, AI can make the necessary changes to make your contracts congruent. 

2. Categorizing Contracts by Type

AI helps legal teams organize their contract repository. Instead of manually sorting all the contracts that come across your desk, use AI to distinguish between the high-priority,  high-value agreements and those lower on the totem pole.

As you build out and optimize your contract process, critically assess the ways you currently sort and group your contracts and how easy it is to retrieve contracts in a particular group. For example, if you are preparing for litigation and need to find contracts that meet specific criteria, AI can help you locate those contracts in seconds, not days.

3. Predictions and Forecasting

An organization is only as strong as its performance against its goals. That means every team in the company needs to keep a finger on the pulse of how the business is trending. Among AI’s core competencies is the ability to spot patterns that regular humans can’t and use data to make predictions.

If lawyers are able to use AI to predict how judges will rule, imagine the many ways in-house legal teams can use this kind of technology to project the future of their business, the bandwidth of their legal team, and more. 


The use of AI in the legal industry has come a long way. With future-forward capabilities for prediction, categorization, and automation, AI enables legal teams to be more innovative, efficient, and data-driven in their operations and decision-making. 

See how LinkSquares uses AI to streamline your contract process. Request a demo today.

Alyssa Verzino is a Senior Content Marketing Manager at LinkSquares.