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Contracts are a necessary part of doing business, but most companies would agree that they usually slow everything down. From endless revisions to approval delays, the contract process eats up valuable time that could be spent closing deals.
In fact, contracts take up 18% of the selling cycle. That’s nearly a fifth of the sales process spent on paperwork instead of revenue-generating activities.
Artificial intelligence (AI) is changing that by taking the tedious parts of contract management off your plate. It has the power to speed up drafting, review, approvals, compliance tracking, and much more.
Businesses no longer have to dig through legal documents or worry about missed details. AI keeps everything accurate, organized, and moving forward. So, if you want to take advantage of the benefits, you’re in the right place.
In this guide, you’ll see how AI is changing contract management, why it makes sense to bring it into your workflow, and how the right tools can help you close deals faster, with less hassle.
You know how contract work can drag—endless edits, approvals, and follow-ups? Smart tools now handle those repetitive, time-consuming tasks, freeing you up to focus on work that actually moves things forward. It’s the same way other teams are using machine learning to get more done, faster.
Instead of spending hours reviewing legal documents, companies can rely on AI-based contract management tools to pull out key terms, flag risks, and check for compliance almost instantly.
But AI doesn’t just speed things up; it also spots patterns and inconsistencies that people might miss, reducing errors and improving accuracy.
When it comes to drafting, AI helps by suggesting standardized clauses so contracting professionals don’t have to start from scratch every time. It also makes risk management easier by identifying potential issues before they become real problems.
Compliance is another major advantage, with AI keeping contracts aligned with changing regulations without businesses having to track every update manually. And rather than sorting through endless folders or email chains, AI organizes contracts into searchable databases so it's easy to find what you need.
While AI definitely isn’t replacing legal teams, it’s giving contracting professionals more time to focus on strategic work instead of routine contract lifecycle management.
AI contract management revolves around making the entire process more efficient, accurate, and cost-effective. Here’s how AI can improve contract workflows and reduce manual effort.
Manual contract reviews can take days, especially with long documents full of legal jargon. In contrast, AI-driven contract management tools scan contracts in seconds, pulling key details like deadlines, contract clauses, and obligations.
Legal teams can quickly access summaries of the most important points, with AI flagging inconsistencies and risks so you can catch issues early and avoid costly mistakes.
Here's an example scenario: A supply chain company with over 500 vendor contracts often needed five days to approve each one. After adopting AI-driven contract management, they cut that time down to just a few hours.
The system identified outdated terms and risky clauses, which makes it easier to catch problems before they cause disruptions. Routine administrative tasks were handled automatically, allowing teams to apply their human capabilities where they were most needed.
Even the most detail-oriented professionals make mistakes. AI reduces human error by identifying mistakes like:
This helps businesses avoid costly disputes and misunderstandings. Since AI tools learn from past data, they improve over time, which, in turn, makes contract management even more reliable.
Laws and industry standards constantly shift, and missing an update can lead to fines or legal trouble. AI helps by scanning contracts for outdated terms, missing disclosures, and risky clauses, so you’re not left reacting too late.
Take tax-related clauses, for example. If the Internal Revenue Service (IRS) releases new guidance, AI highlights language in your contracts that no longer meets current requirements. You won’t need to dig through old files or manually check for updates.
AI also reviews past contracts to spot patterns that could signal compliance issues. It helps you stay ahead of risks throughout the entire contracting process, not just during initial drafting.
Automation like this helps improve contract performance by cutting down on manual work, keeping things consistent, and making sure your contracts stay up to date with changing regulations.
Managing contracts isn’t just time-consuming; it’s expensive. Legal fees, administrative work, and delays all add up.
AI cuts costs by automating routine tasks, reducing errors, and speeding up approvals. That means legal teams spend less time on contract reviews and more time on work that actually adds value.
AI could free up four hours per week for legal professionals, adding up to 266 million hours of increased productivity for U.S. lawyers alone. That’s about $100,000 in new billable time per lawyer each year.
AI doesn’t replace legal teams, but it does help them work faster and smarter.
AI contract management software automates the entire contract lifecycle to make drafting, reviewing, approving, and signing contracts faster and easier.
Most AI contract management systems use natural language processing (NLP) to analyze contract language, highlight key terms, and flag potential risks.
But one platform that takes this to the next level is Aline, an AI-powered contract lifecycle management (CLM) tool built for startups and B2B companies.
Aline eliminates the need for multiple tools like Word and DocuSign by offering automated contract generation, AI-assisted redlining, built-in e-signatures, compliance workflows, and so much more.
Aline is built to optimize the entire contract review process. Here’s how it works:
AI can make contract management faster, more accurate, and less frustrating—but only if it’s set up the right way. A poorly planned rollout can create confusion, slow adoption, and even introduce new risks.
So, here’s how to promote a smooth transition and get the most out of AI-powered contract management.
Before jumping into AI contract management, figure out what you want to fix. Are contracts stuck in approval for weeks? Are compliance risks slipping through?
A sales team struggling with long contract cycles might aim to cut turnaround time by 50%, while a legal team may focus on reducing manual review errors. Knowing what success looks like makes it easier to measure AI’s impact.
Not all AI platforms are built the same. Some focus on automation, while others specialize in AI-assisted redlining or compliance tracking.
If your team spends too much time editing contracts manually, a tool like Aline, which offers AI-powered contract analysis and automatic clause suggestions, can make a big difference.
Look for a platform that fits your team’s workflow rather than forcing everyone to adapt to new, complicated processes.
AI works best when it has clear, structured data to analyze. Allowing employees to draft agreements freely can lead to inconsistent terms and missed details. By creating standardized templates with pre-approved clauses, you help the system process contract documents more accurately and consistently.
This approach works well for specific requirements like telecommunications security language, which needs to show up consistently across vendor contracts and service-level agreements.
For example, a startup scaling quickly might rely on AI to auto-generate NDAs and service agreements, using built-in templates that already include the correct security terms and legal phrasing. That way, teams can move faster without needing legal input on every draft.
Standardization makes sure the right language is used every time, which makes AI tools far more effective across the entire contract lifecycle.
One of the biggest bottlenecks in contract management is waiting for approvals. AI helps remove these delays by automatically routing contracts to the right people at the right time.
If a vendor agreement requires sign-off from both legal and finance, AI makes sure it moves through the proper channels in the correct order. It also sends automated reminders, so teams stay ahead of deadlines and renewals without last-minute scrambles.
This kind of automation is especially helpful when you're rapidly writing user requirements and pushing contracts through legal review. A delay in one step can slow down everything, but AI helps keep the process on track.
With fewer holdups and missed steps, automated workflows make it easier to improve contract performance across the board.
AI is only as good as the people using it. A legal team skeptical of automation might push back on contracting AI tools, while a sales team focused on speed might lean too heavily on them without understanding the limits.
Hands-on training helps teams see how AI supports—not replaces—their expertise. Walk them through real scenarios where AI helps modify contracts quickly, flags issues during risk assessment, and streamlines approvals without cutting corners.
When employees understand how AI fits into their workflow and maximizes accuracy, they’re more likely to trust it and use it effectively. Clear training builds confidence and helps make sure AI is used to its full potential across legal, procurement, and sales functions.
AI isn’t a set-it-and-forget-it solution. Keep an eye on key metrics like contract turnaround time, approval speed, and risk detection accuracy. If AI keeps flagging harmless clauses as risky, tweak the settings. If approvals still take too long, revisit workflow automation.
A company using AI to reduce contract errors might start by tracking how many mistakes legal teams manually correct each month. If that number isn’t dropping, the AI settings may need refinement.
Managing contracts often means dealing with delays, overlooked deadlines, and too much back and forth.
Luckily, AI helps avoid these slowdowns by keeping contracts structured and moving through approvals without unnecessary friction. Instead of manually reviewing every detail or tracking compliance updates, AI steps in to handle the biggest time sinks.
Aline makes contract management even more efficient by automating key processes and improving collaboration. Whether it’s drafting, approvals, or execution, everything happens in one organized system.
Start your trial today and see how Aline works!
An AI contract management solution helps automate contract creation, analyze business contracts, flag risks, and reduce repetitive tasks. It also supports procurement professionals and contract managers by organizing terms, tracking renewals, and improving accuracy.
AI isn’t replacing professionals but assisting them. From reviewing bid solicitations to managing other transaction agreements, generative AI is helping contract managers save time and reduce errors across various contract types.
Yes. AI can review bid solicitations, highlight key clauses, and check for inconsistencies. This allows procurement professionals and legal teams to focus on strategy while AI handles the repetitive tasks.
The best tools use generative AI to draft contracts using pre-approved language. A strong AI contract management solution should support different contract types, including business contracts and other transaction agreements.
Yes. AI-based CLM tools assist federal agencies by using robotic process automation, obligation tracking, and optical character recognition to flag incorrect provisions, suggest alternative clauses, and surface key data points. This helps the Artificial Intelligence Office and General Services Administration make informed decisions, strengthen due diligence, and balance human expertise with smarter decision making, boosting user adoption and helping mitigate risks in complex contract terms.
Brent is an attorney, a full-stack JavaScript engineer and the CEO of Aline.
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