Artificial intelligence is changing the way we do tasks and the legal industry is no exception. Contract drafting and review is one of the most important aspects of the legal industry. However, the traditional process of contract drafting and review in the era of AI is tiresome and time-consuming.
This traditional review process takes days to complete and mistakes are not uncommon. Even though AI has the potential to revolutionise the way contracts are drafted and reviewed and helpful in streamlining the entire process and identifying potential issues. However, the usage of this technology comes with significant limitations and challenges.
It is important to consider that any technology is not a substitute for the legal expertise and knowledge of a lawyer. Lawyers can interpret the nuances of the law and apply it to the specific circumstances of a contract, as well as provide strategic advice on how to negotiate and enforce the terms of a contract. There are several advantages to having a contract drafted and reviewed by a legal professional than any technology. First and the foremost difference between contract drafting and review by artificial intelligence (AI) and lawyers is the way in which they approach the task. Lawyers protect the interest of the parties to the contract by identifying and mitigating potential risks or issues to avoid costly disputes or litigation down the road. The artificial intelligence relies on a one-size-fits-all template but lawyers customise a contract to the specific needs of the parties involved. This customisation ensures that the contract meets the specific requirements of the parties.
Also, lawyers are bound by professional ethics and obligations of confidentiality, which can help ensure that sensitive information is kept private and not disclosed to third parties. Such confidentiality is difficult to maintain by any technology.
AI is best at analysing patterns and making predictions based on existing data, but may not have the same level of creativity or innovation that human lawyers can provide. This could result in a more limited range of options or approaches for contract drafting or review. On the other hand, Lawyers are flexible in their approach to contract drafting and review. This helps the parties to the contract to find the right balance between their respective interests and priorities. While AI can be programmed to identify and analyse various factors, it may not have the same level of empathy or interpersonal skills that human lawyers can bring to the table.
No doubt, AI can potentially save time and increase efficiency, they may also require a significant investment in software, hardware, and maintenance. Depending on the complexity and scale of the system, this could be a significant expense in the legal industry. This could make it more difficult for small or medium-sized businesses to implement AI-based contract drafting and review, particularly if they don’t have access to investment resources.
Even huge investments in AI technology cannot compensate for the AI system-generated error or overlook a critical issue in a contract, which could potentially expose the parties to legal liability or other risks. This could be particularly concerning in high-stakes contracts or industries. However drafting or reviewing a contract by a lawyer rather than an AI not only mitigates the potential issues but also adds a level of professionalism and legitimacy to the process, which can be particularly important in formal or high-stakes agreements. Also, lawyers ensure a contract is in compliance with all applicable legal and regulatory frameworks and they are skilled at communicating complex legal concepts in a clear and concise manner. They can help ensure that the terms of a contract are clearly understood by all parties, reducing the risk of confusion or misinterpretation.
Overall, having contracts drafted and reviewed by lawyers can provide many advantages, including clear communication, legal compliance, professionalism, efficiency, and flexibility. This shows AI is never going to substitute the lawyer but a combination of AI and legal expertise can be a powerful tool for efficient and effective contract drafting and review. AI has been perceived as a threat to the lawyers’ employment. However, the usage of AI is only limited as an assistant to the lawyers. So, this is not about Human Lawyers versus AI, but the Lawyers who use AI versus those who do not.
