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Technology to the rescue (?)
Save time with AI contract review! Reduce the time, effort, and cost spent on negotiating agreements! Help sales close deals faster!
Those are just a taste of the claims made by providers of contract review software, one of the hottest products in the rapidly growing, multi-billion dollar “legal tech” market.
Quick, painless contract review should be honey to the ears of any in-house lawyer. Imagine staring down the swamp of a 60-page, small-print agreement — only to cruise over it on an AI-powered redliner.
Quick, painless contract review should be honey to the ears of any in-house lawyer.
The lawyer’s employer benefits too. It’s no party for the company when its attorney gets stuck in contracting muck. Every minute spent marking up an agreement means a minute more until the deal closes, a minute more until revenue gets booked, a minute more until products or services are delivered.
But with legal tech? A few taps on the ol’ qwerty and the contract’s done. Voila!
Right?
Reviewing speed ≠ Contracting speed
Nothing’s inherently wrong with this pitch.
Contract review does suck up time and effort — more than it should. And despite ethical duties to keep abreast of tech developments, many in the legal profession remain technological mossbacks, clinging to manual review methods like hand mark-ups and brushing aside contracting software as empty hype. Legal tech can help them work not just faster but better; more in-house lawyers should adopt it.
But implicit in many legal tech claims is that redlining creates the main delay between deal start and deal close. Certainly, for the in-house lawyer it’s the most time-intensive part of contracting. And internal clients feel that delay too: they tap their watches while counsel combs through the fine print, adjusting “legal language” as needed.
But implicit in many legal tech claims is that redlining creates the main delay between deal start and deal close.
But as any in-house lawyer knows, contract review is just one step on the road toward a final deal.
Once legal takes its crack at the document, other stakeholders in the organization — like finance, tax, or IT — may need to eyeball terms and internally discuss issues. After that’s done, edits are sent to the counterparty, who does a similar dance in their office: they review and discuss your redlines. What can’t be resolved by exchanging drafts warrants a meeting — or two, or three.
As a result, even when technology shortens the mechanical act of redlining to minutes, negotiations can last weeks or months.
Pragmatism saves more time than software
The primary drag on contracting then isn’t how quickly you redline; it’s how you redline. The more substantial and substantive those redlines, the wider the gap between the parties’ contractual positions — and the more time it takes for the parties to review, negotiate, and reach a deal.
To be sure, in-house lawyers shouldn’t sacrifice material contract concerns at the altar of a speedy close. If signing deals fast were the sole goal of contracting, legal could spend its days golfing. Mitigating risks, protecting rights, avoiding liabilities — those things matter.
The primary drag on contracting then isn’t how quickly you redline; it’s how you redline.
But lawyers have a bias toward risk avoidance and CYA. And a blunt, all-sizes-fits-all approach to contract review — where every deal runs through the same redlining mill — is more likely to complexify simple deals rather than overly simplify complex ones.
Legal tech doesn’t necessarily solve that problem. Paradoxically, it can amplify it. When the reviewer bears little time and energy cost in reviewing the agreement, their redlines may be heavier, increasing the rounds of review. So, the lawyer saves time — but prolongs the deal.
(Consider too the corollary: that manual methods of review, coupled perhaps with a dash of laziness, may force lawyers to better prioritize what matters and bring the deal to a swifter close.)
Whether or not legal tech is used, a client-focused in-house lawyer needs to think about total negotiation length, not just their own review time. That means evaluating whether a given edit’s contractual benefits justify the additional delay and friction that the edit adds to negotiation. And if those costs outweigh the benefits, the lawyer should be prepared to make a trade-off: spare the red ink and save some time. A low-revenue, low-risk deal, for instance, should almost always warrant a lighter touch than a high-stakes one. Stylistic edits may need to take a backseat in an urgent transaction.
Whether or not legal tech is used, a client-focused in-house lawyer needs to think about total negotiation length.
Pragmatism, in short, is the order of the day.
Implementing pragmatism
Legal tech remains an untapped asset for many lawyers. In addition to shortening review times, contracting software can spot issues that human eyes miss.
But the most important tool for sealing a deal efficiently isn't computer code. It’s practical deal-making.
Practicality needn’t be just a personality trait. Just as a legal department can adopt legal tech, so too can they implement pragmatic contracting practices. For example, the department can write out the top five biggest issues in their deals, then direct lawyers to prioritize those issues over others. Such a contracting playbook can include further nuance, laying out different redline approaches based on revenue, services, and other factors.
Most important to pragmatic contracting though is the tone from the top. Leadership should empower their in-house counsel to make risk-based decisions. And their lawyers shouldn’t fear retribution when they decide to trade off the perfect for the done.
How to create that environment is a problem for humans to solve, not technology.
Disclaimer: The information in any resource in this website should not be construed as legal advice or as a legal opinion on specific facts, and should not be considered representing the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical guidance and references for the busy in-house practitioner and other readers.
