Skip to content

Contracts

How AI-powered contract drafting increases precision and compliance

In the past, drafting contracts has been a time-intensive process, often requiring legal teams to create multiple iterations, ensure compliance, and carefully review language for accuracy. But with the rise of AI, drafting contracts is evolving into an automated process at the level of precision with which humans can’t compete. 

According to The State of AI in Contract Management report, advancements in AI now allow organizations to automate the creation of boilerplate clauses and standard contract templates. By leveraging historical data, organizational standards, and legal regulations, these tools enable faster and more precise drafting, transforming the contract creation landscape.

In this blog, let’s explore how AI-powered drafting works, why it matters, and how your organization can benefit from adopting these tools.

  • Why you should care
    Drafting is one of the most time-consuming stages of contract management, often drawing resources away from higher-value work. AI can significantly reduce this burden, allowing teams to focus on strategic tasks.
  • What you can do about it
    Consider integrating AI-powered tools for drafting, especially those that can pull from your organization’s historical contract data to create accurate, tailored clauses automatically.
How AI-powered contract drafting increases precision and compliance - Oneflow

How AI levels up contract drafting

It’s easy to assume that AI in contract drafting is just about speeding up the process. Saving time is one thing, but it’s also about creating a higher standard of precision and consistency. AI-powered tools generate standard clauses based on prior contracts and organizational policies, effectively automating much of the boilerplate work that used to be manual. This allows legal teams to expedite the initial phases of contract creation without sacrificing quality.

The State of AI in Contract Management notes that AI tools are capable of learning from historical data, ensuring that standard language reflects current industry standards, regulatory requirements, and company policies​.

  • Why you should care
    Drafting contracts manually increases the risk of inconsistencies and errors, particularly in high-volume environments. By standardizing contract language, AI minimizes these risks.
  • What you can do about it
    Leverage AI-powered contract management tools to create a library of standardized clauses, making drafting faster and reducing human error in repetitive sections.

Read also: What is contract management? A complete guide

Increased precision and compliance

AI tools not only speed up the drafting process but also enhance precision. According to the report, many organizations struggle to maintain a consistent level of accuracy across different contracts, especially as the volume of contracts grows. By using AI to standardize common clauses, organizations can ensure that each contract meets the necessary compliance standards​.

These tools also incorporate compliance checks directly into the drafting process. Rather than manually cross-referencing legal requirements, AI tools can automatically ensure compliance with local and industry regulations, flagging any language that may need adjustment.

  • Why you should care
    Ensuring compliance across contracts can be resource-intensive and complex, particularly for organizations operating in multiple jurisdictions. AI automates these checks, reducing the risk of non-compliance.
  • What you can do about it
    Integrate AI solutions that offer compliance verification to reduce the risk of penalties and ensure your contracts meet regulatory standards across all regions and sectors.

Supporting insights

Industry research underscores the transformative potential of AI in contract drafting. The Harvard Business Review has highlighted that automation can free up valuable time for legal teams, allowing them to focus on higher-level negotiations rather than repetitive drafting tasks. This aligns with The State of AI in Contract Management report’s emphasis on the efficiency gains from AI-powered standardization​.

Similarly, a report from McKinsey & Company points out that automation in legal work, especially contract drafting, is crucial for reducing bottlenecks, particularly in high-growth sectors. By eliminating repetitive tasks, AI enhances overall productivity and allows legal professionals to allocate more time to strategic decision-making.

How AI-powered drafting improves negotiation

AI’s benefits in contract drafting extend beyond simple automation. By using AI to draft contracts with standard, industry-compliant language, legal teams enter negotiations with a solid foundation. With repetitive or routine clauses already in place, they can focus their energy on customizing only the essential, high-value terms.

The State of AI in Contract Management highlights that AI-powered drafting doesn’t eliminate the need for legal oversight but rather empowers legal teams to tackle the negotiation phase more efficiently. By allowing AI to handle the repetitive groundwork, legal teams can provide clients with faster turnaround times while maintaining a high standard of accuracy.

  • Why you should care
    Automating routine drafting tasks provides a more efficient starting point for negotiations, allowing legal teams to focus on high-impact areas of the contract.
  • What you can do about it
    Use AI tools to prepare initial drafts with standard terms, giving your team more flexibility and focus when negotiating complex terms or personalized clauses.

Free contract templates in Oneflow

Save time with 40+ free contract templates in our Template Library

Increasing scalability and operational efficiency

In high-volume contract environments, scalability is essential. Manual drafting becomes a bottleneck as contract volumes rise, often requiring additional human resources. AI alleviates this strain, enabling organizations to handle more contracts without sacrificing quality. The report notes that many organizations see improved scalability as one of the most tangible benefits of AI-powered contract drafting.

  • Why you should care
    As your business grows, so does your contract volume. Scaling up without AI can quickly overwhelm your legal team, leading to delays or errors.
  • What you can do about it
    Adopt AI-powered solutions that automate the drafting of high-volume, routine contracts. This will help your legal team remain efficient and responsive even as contract volume increases.

Key takeaways

AI-powered contract drafting transforms the way organizations create and manage contracts, offering precision, speed, consistency, and compliance benefits. By leveraging AI to generate standard language and automate repetitive tasks, legal teams can free up valuable time to focus on complex negotiations and strategic decision-making.

  • Why you should care
    AI-powered drafting tools reduce time and human error, creating a reliable foundation for all contracts.
  • What you can do about it
    Start by implementing AI tools for drafting boilerplate clauses, then expand usage as your organization scales. Standardized, AI-generated content not only improves efficiency but also helps ensure compliance, making it a critical component for organizations looking to streamline their contract management processes.

By integrating these tools, organizations can increase their operational efficiency, better manage high contract volumes, and achieve a more consistent, compliant approach to contract drafting.

Prev:

The future of sales ops is built with persistence, adaptability, and innovation, according to Michael Heiberg, founder of Ocean.io

Next:

Contract management automation: How to automate HubSpot contracts with Oneflow?

Move from friction to flow

Discover how digital contracts save you time, money, and admin pains. So you can focus on what you do best.

Move from friction to flow

Discover how digital contracts save you time, money, and admin pains. So you can focus on what you do best.
Demo form
Get your demo
Enter your details in the form and we’ll be in touch shortly.

"*" indicates required fields

Opt Out
form bottom demo

Related articles

Emailing contracts This everyday practice could ruin your contract process - Oneflow
Contracts

Emailing contracts: This everyday practice could ruin your contract process

The future of AI in legal: Don't confuse ChatGPT with my law degree - Oneflow
Work & Culture

The future of AI in legal: Don’t confuse ChatGPT with my law degree

Why Oneflow is the ultimate contract management software for modern businesses - Oneflow
Contracts

Why Oneflow is the ultimate contract management solution for modern businesses

Improving procurement processes through contract management software - Oneflow
Contracts

Improving procurement processes through contract management software

Product Updates

Never miss an update with Oneflow x Slack

What is a signatory? Oneflow guide
Contracts

What is a signatory? A guide to signatory rights and responsibilities

How to print a Word document? - Oneflow
Work & Culture

How to print a Word document?

Benefits of using sales spiffs - Oneflow
Sales

What is a sales SPIFF? Definition, Examples, and Benefits