What is OCR: Optical character recognition (OCR) is a technology that automatically extracts text from images and converts it into a machine-readable format.
Why Legal Teams Need OCR: OCR lets legal teams convert legacy scanned or faxed agreements into searchable, editable text that can be efficiently integrated into modern contract management and analysis systems.
Lawyers deal with lots of jargon and acronyms, but one your legal team absolutely should add to their lexicon is OCR, which stands for optical character recognition. OCR is the critical legal technology you didn't know you needed.
OCR is, simply put, technology that can read text in images. Using OCR software can convert scans, faxes, or photographs of documents into regular, searchable text files. What once was a snapshot of a contract taken on a blurry smartphone camera can become a conventional Microsoft Word document, ready for fresh redlines.
Why OCR is needed in Legal Contracts
Every legal team needs an OCR tool so that scanned or faxed agreements (like those your firm signed 10 or 20 years ago) can be brought into modern document management and analysis solutions. Choosing the right OCR solution for your legal staff is a more critical decision than you might expect.
OCR has been widely available for over two decades and the technology has advanced greatly in that time. Still, legal teams need to be very particular about the quality and features of the OCR systems they employ, because the accuracy of language is critical when it comes to legal documents.
How Does OCR Work in Legal Document Management?
OCR software transforms scanned contracts, pleadings, exhibits, or other legal documents into editable, searchable digital text. This process enables legal teams to analyze legacy agreements, surface key clauses, and integrate historical files into modern contract management systems. OCR can operate as a standalone program, an API integrated into a CLM platform, or a cloud-based service.
- Image Acquisition: A scanner or upload captures each page of a document, which is then converted into a simplified two-color version. The OCR engine distinguishes dark regions (characters and marks) from light regions (background). In a legal context, this step is critical for digitizing decades-old contracts, scanned PDFs, or court filings that may only exist in paper form.
- Preprocessing: The image is cleaned to improve accuracy. This may include deskewing pages that were scanned at an angle, removing unnecessary lines or signature boxes, and distinguishing between typed and handwritten notes (like attorney annotations or initials in margins). Preprocessing ensures that legal terms, dates, and signatures are preserved with maximum accuracy.
- Text Recognition: The OCR engine analyzes dark regions to identify letters, numbers, or legal symbols (such as § for statutes). Recognition can happen character by character, word by word, or block by block. Two primary approaches are used:
- Pattern Recognition: The system compares text against a trained library of fonts and legal document styles. For example, it can recognize boilerplate phrases common in NDAs or contracts.
- Feature Recognition: For untrained fonts or unusual symbols, OCR applies rules (strokes, curves, intersections) to interpret characters. This is especially valuable when processing exhibits, scanned court forms, or contracts drafted in multiple languages.
- Layout Recognition: Advanced OCR doesn’t just capture characters—it maps the structure of a legal document. It distinguishes between clauses, tables (e.g., payment schedules), or signature blocks, preserving the legal context of the text rather than just flattening it into words.
- Postprocessing: Once recognized, the text is converted into machine-readable formats like Word, searchable PDFs, or structured data for contract lifecycle management (CLM) systems. Some solutions also retain the original scan alongside the converted version for audit trails, compliance, and verification—an essential safeguard in legal document management.
Types of OCR in Legal Document Management
OCR technology has evolved to handle a wide variety of legal documents—from decades-old scanned contracts to modern digital filings. The four main types of OCR differ in sophistication and application are:
1. Simple OCR:
This basic form of OCR analyzes documents character by character, comparing each scanned letter to a stored glyph (a shape template). While useful for clean, typed contracts in standard fonts, it struggles with the variety of formats and languages found in global agreements or older legal documents.
2. Optical Mark Recognition (OMR):
OMR goes beyond letters to detect marks, checkboxes, logos, watermarks, or even signatures. In legal workflows, this is particularly helpful for identifying signed execution pages, initialed clauses, or checkbox-driven compliance forms—ensuring no critical mark is missed.
3. Intelligent Character Recognition (ICR):
ICR applies artificial intelligence and machine learning to “learn” how to read over time. By analyzing curves, loops, and intersections, it adapts to handwritten notes or unique fonts. For legal teams, ICR is invaluable when digitizing annotated contracts, handwritten witness statements, or older legal records that lack consistency.
4. Intelligent Word Recognition (IWR):
Building on ICR, IWR recognizes entire words at once rather than single characters, increasing speed and accuracy. This is especially powerful for contracts filled with recurring legal phrases (e.g., “force majeure,” “indemnification,” or “governing law”), allowing software to quickly identify and extract key terms across large document sets.
The Benefits of OCR for Legal Teams
OCR provides far-reaching advantages for legal professionals tasked with managing large volumes of contracts, case files, and regulatory documents. Key benefits include:
- Cost Reduction: By eliminating manual data entry from scanned contracts or filings, legal teams save time and reduce reliance on costly outside counsel or admin resources.
- Workflow Efficiency: OCR makes scanned legal documents instantly searchable, helping attorneys and contract managers quickly locate clauses, dates, or obligations across thousands of files.
- Automation: Contracts can be automatically routed, tagged, and prepared for text mining—accelerating tasks like compliance checks, due diligence, or litigation discovery.
- Lower Storage Costs: Converting paper archives into digital files cuts physical storage expenses, freeing firms and corporate legal departments from managing offsite vaults or warehouses.
- Data Security & Compliance: Digitized documents can be encrypted, centrally stored, and backed up—reducing risks of loss from fires, theft, or misplacement, while also supporting audit trails and regulatory compliance.
- Accessibility: Searchable digital text makes legal records more accessible to staff with visual impairments or those relying on assistive technologies.
OCR Use Cases in Legal Operations
One standout example comes from Tealium, a global Customer Data Platform (CDP) that helps companies unify and activate customer data. With over 850 customers worldwide, Tealium faced a challenge common to many growing organizations: thousands of decentralized agreements stored across multiple regions and databases made it difficult to find or track any specific contract. Key dates, obligations, and clauses were buried in inaccessible files, slowing operations and increasing risk.
By implementing LinkSquares with Smart OCR, Tealium was able to centralize all agreements into a single secure repository. Each document underwent OCR and data extraction, making the text fully searchable, taggable, and reportable. A custom dashboard surfaces the most relevant information for the legal team, enabling them to track critical dates, monitor obligations, and even measure team KPIs with ease. As Celina Caprio, Manager of Legal Operations at Tealium, notes:
“When you’re dealing with high volume on a global scale and thousands of agreements in your repository, the searching capability is amazing… it’s a tool that’s been designed for legal and how legal works.”
This example illustrates the power of OCR in legal operations: turning overwhelming volumes of contracts into organized, actionable intelligence, improving efficiency, compliance, and accessibility across the organization.
What Should I Use to Convert PDF Contracts?
Freeware OCR solutions like SimpleOCR and FreeOCR are often bundled with Microsoft Windows PCs, and major document management solutions like Adobe Document Cloud and Google Drive have built-in OCR capabilities. These are fine for consumer or even everyday business usage, but they often fall short for legal teams.
These solutions can struggle dealing with complex or low-quality images, converting a blurry letter M into a pair of Ns, failing to recognize vertical columns of text on the same page, or misinterpreting background images, notary stamps or watermarks as part of the text on the page. Given all the fancy ways that tools like Microsoft Word or Adobe Acrobat can allow you to lay out a document, even a brand-name OCR tool can easily struggle to understand where text begins and ends. That's unacceptable when it comes to contracts.
Specialty solutions like Kofax OmniPage, Abbyy Finereader, and Rossum Data Capture offer more sophisticated functionality, but don't natively integrate with a lot of cloud-based or legal-centric software. These tools are built for different industries and use cases, not for lawyers and legal teams. In using them, you have to trade document fidelity for easy management and analysis, which is just shifting manual work to a different part of your workflow.
Legal teams need an advanced, high-fidelity OCR tool that seamlessly connects to their legal document storage, management, and analysis solutions so that they can get scanned, photographed or e-faxed documents processed and ready for redlines as soon as possible.
How is LinkSquares OCR different?
The truth about OCR may surprise you. LinkSquares has built the OCR solution that in-house legal teams need. Using cutting-edge artificial intelligence trained on thousands of legal documents, the built-in LinkSquares OCR engine automatically converts images into high-quality text that software and humans alike can read, edit, analyze and organize. Any multifunction printer/scanner or smartphone camera can feed your legal documents to the LinkSquares cloud, where AI will help you parse, monitor and manage those contracts and agreements at the speed and scale of software.
If you're ready to unlock the information hidden in scans, faxes and photographs of your legacy legal agreements -- and want to get the best legal-centric OCR solution available -- contact LinkSquares today.
OCR FAQs
What are some OCR software for legal documents?
Legal teams can choose from both free and paid OCR solutions: free options include Tesseract, SimpleOCR, and Microsoft Lens, which handle basic scanning and text recognition; paid solutions like LinkSquares Smart OCR, ABBYY FineReader, Adobe Acrobat Pro DC, Kofax OmniPage Ultimate, and Readiris offer advanced features such as high-accuracy text extraction, batch processing, and seamless integration with contract management systems.
What are the Types of OCR?
The main types are Simple OCR, Optical Mark Recognition (OMR), Intelligent Character Recognition (ICR), and Intelligent Word Recognition (IWR).
How does OCR work?
OCR software scans a document to distinguish text from background, cleans and preprocesses the image (deskewing, despeckling, and removing extraneous lines), then recognizes text using pattern matching (comparing characters to known fonts) or feature extraction (analyzing character shapes), and finally converts the recognized text into searchable, editable, machine-readable documents, sometimes retaining the original image for reference.
How Do I Turn Scanned PDF Contracts into Searchable, Editable Legal Text?
Use a legal-focused OCR tool like LinkSquares Smart OCR to digitize the PDF, extract text, and make it fully searchable and editable within your CLM system.