AI Contract Review Isn’t Dangerous (If You Do It Right)

Legal and procurement teams are under constant pressure to move faster. The inbox fills, the queue grows, and the business keeps asking why contract cycles take so long.

While AI holds promise for accelerating cycles, many leaders are uneasy about AI contract review. Not because they doubt the potential, but because these tools still seem to make confident errors that no GC wants to defend.

This tension is showing up across the industry. The global legal AI market reached about $1.45 billion in 2024 and is projected to climb toward $4 billion within five years. Leadership sees that growth and expects legal to adopt the same pace as the rest of the enterprise.

The danger is not the AI itself. It is the idea that it should operate independently. If a model can redline, accept or approve without human oversight, it can also create liabilities without anyone seeing them.

Used correctly, AI contract review becomes a high speed intake engine. It reads everything, organizes everything and routes the real decisions to humans. That model delivers speed without handing over judgment.

To see why this matters, we need to look at the tradeoff many teams face between contract review speed and safety.

The Choice Between Contract Review Speed and Safety

Major corporate events often trigger a high-stakes contract review. A merger, for example, can suddenly demand a due diligence review of tens of thousands of legacy contracts.

But the catalyst could be anything. A new regulation such as DORA or an ESG mandate may necessitate a massive, portfolio-wide repapering project. A post-merger integration requires harmonizing thousands of newly acquired supplier agreements. A new CFO wants to centralize all vendor contracts to get a true handle on cost exposure, and so on.

The traditional approach to any of these scenarios is onerous.

Take an M&A example previously mentioned. Even a conservative diligence plan can require more than 5,000 hours of review across a blended team. At typical rates of $300 to $700 per hour, total costs quickly rise into the seven figures. The business demands speed. Legal, rightly, insists on safety.

This pressure creates a familiar bind for any General Counsel. The business wants contract cycles to accelerate, often dramatically. Yet the moment legal reduces oversight, the risk of missing a material term, a nonstandard obligation or a hidden liability increases. Speed becomes the mandate. Safety remains the mandate. And legal is expected to deliver both at the same time.

Traditional legal review processes were built for a slower world. They rely on meticulous human diligence, which becomes harder to sustain as contract volume and complexity grow.

Yet, many legal leaders remain cautious about AI in contract review because mainstream models can lack clear accountability and sometimes produce biased or unverifiable outputs. That caution is reasonable. Unmanaged AI adoption can create legal, security and operational exposure faster than most teams can respond to it.

That leaves legal departments consequently stuck between two imperfect contract review options. If you insist on full manual review to stay safe, the business will eventually route around you, creating even greater shadow risk. If you rely on fully autonomous AI to keep up with demand, you risk handing judgment to a system that cannot understand the context or consequences of its choices. Neither option works, and the cost of getting it wrong is real. Poor contract management erodes an average of 15% of contract value every year.

Why Today’s Contract Review Choices Still Create Risk

Despite these two competing objectives, legal teams have been stuck choosing between two equally imperfect solutions. The first is the traditional, fully manual contract review process. The second involves adopting new AI tools, whether specialized for legal or not.

The problem is that both of these contract review models introduce their own significant, and often hidden, structural flaws.

Manual Contract Review

Traditional manual review depends entirely on human effort to process every document. While it provides a sense of control, it creates a different risk.

When legal cannot keep pace with the business, teams find workarounds that create exposure outside formal review processes. Sales leaders start signing side letters. Procurement managers ignore redlining protocols to get vendors onboarded faster. The "safe" manual contract review paradoxically increases risk by rendering the legal department invisible to the actual flow of business.

AI Without Sufficient Context

Many teams have turned to experimenting with AI to review contracts, ranging from general purpose LLMs to specialized legal AI platforms. These tools can read at scale and structure information in ways manual review cannot. The challenge appears when they are used without the right human oversight or operational model.

Even the best legal AI needs calibrated guidance, standardized playbooks, and clear escalation rules. Without that structure, AI can process contracts quickly but still miss contextual judgment that only experienced legal teams can apply.

Neither approach on its own delivers the balance of speed and insight a modern enterprise requires. Manual review provides control but cannot scale to the volume and pace the business now expects. AI driven review can scale, but without the right guidance and oversight, it cannot consistently apply the contextual judgment legal teams depend on.

Leverage AI-Powered Scale and Human-Led Oversight

A better option does exist. A managed, AI powered review model combines scale with real oversight. AI handles the intake work at speed, and trained specialists apply the judgment. The technology filters the volume. The service delivers the decisions.

Execo’s AI-powered managed contracts service is built on this principle. It acknowledges the truth about current technology: AI is exceptional at processing contract volume, but nuanced commercial judgment requires human oversight. Execo leverages AI’s speed to instantly review every incoming contract, flagging deviations from your company’s playbook, identifying non-standard payment terms, missing data privacy clauses, or aggressive indemnity language.

But AI makes no final decisions. The output is immediately routed to a human expert: a lawyer, specially trained in AI contract review, who reviews the AI’s findings against the commercial implications of the deal. This human layer provides the critical safety mechanism by validating the AI’s work and applying the subtle and commercially aware judgment that algorithms don’t possess.