Best AI contract risk management tools to reduce rising in-house legal costs

In-house legal teams face many challenges, from managing ever-increasing contract volumes to navigating fast-changing regulatory landscapes. This leads to increasing reliance on outside counsel and spiraling internal resource costs.

Recent advancements in artificial intelligence (AI) have introduced a new class of contract management tools that can automate contract screening, identify compliance issues, streamline negotiations, and reduce the need for labor-intensive manual reviews. This means legal teams will feel less strained meeting tight deadlines and ensuring contractual compliance if they use these AI-powered solutions to replace poor contract management practices.

In this article, we explore how AI-driven technology solutions are changing the way contracts are negotiated and governed. We compare the top AI solutions on the market and highlight how these tools can reduce the burden on legal teams and help businesses more effectively manage growing legal costs.

Main takeaways from this article:

• A structured, proactive approach to contract governance can help reduce legal risk, and technology plays a pivotal role in this oversight.
• Through automated clause detection, negotiation heatmaps, and real-time risk scoring, AI capabilities provide in-house teams with the insights needed to handle high volumes of agreements effectively.
• Increased workloads, regulatory complexities, and reliance on external counsel drive up legal costs. 
• Popular solutions such as Aptus/Conga, Ironclad, Ntracts, Oracle Fusion, DocuSign CLM, Workday, and DocJuris help legal teams streamline the entire contract lifecycle.

What is contract risk management?

Contract risk management is the process of identifying, assessing, and mitigating risks throughout a contract's lifecycle. This lifecycle typically includes contract creation, review, redlines and markups, drafting, negotiation, execution, repository, contract tracking, performance monitoring, and renewal or termination. The goal of contract risk management is to ensure that all stakeholders understand the obligations and liabilities bound within an agreement.

How AI is changing the landscape in contract risk management

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Given the explosion of contract volume in many organizations and the resulting complexities, in-house legal teams are turning to AI tools to automate contract risk management. These tools can quickly spot risky clauses or non-compliant terms, review changes proposed by counterparties, and track contract performance throughout an organization. The result is faster turnaround times, more accurate risk detection, and better visibility into contract portfolios.

The role of AI in contract lifecycle management (CLM)

AI tools fundamentally transform contract lifecycle management by automating critical review processes and enhancing accuracy. These tools can:

• Automate Contract Review, Screening, and Clause Detection: Instead of laboriously scanning PDFs, AI tools read and analyze contracts in their native formats and instantly detect relevant clauses for further scrutiny. This streamlined process reduces human error, lowers the chance of missing essential terms, and saves hours of manual effort.

• Identify and Mitigate Risks Early in Negotiations: AI excels at pattern recognition in vast textual datasets, enabling quick and accurate contract analysis. By training AI models on historical contract data, legal teams can flag high-risk clauses, such as those related to indemnification, liability limitations, and jurisdiction, during initial reviews. They can also detect deviations from contract playbook clauses and assess the risk of third-party terms.
• Ensure Compliance With Legal and Industry-Specific Regulations: Legal teams need to satisfy general and specific regulations depending on their industry (e.g., HIPAA for healthcare, GDPR for data privacy). Given the increasing complexity of these regulations, AI solutions automatically identify clauses that deviate from compliance standards, alerting legal teams to make necessary adjustments.

AI capabilities that reduce legal costs and improve internal efficiency

AI tools enhance the effectiveness of legal operations by streamlining contracting workflows while also directly addressing the rising costs and efficiency challenges faced by in-house legal teams. This is made possible with capabilities such as:

• Negotiation heatmaps: Negotiation heatmaps visually represent areas of contention within a contract. By aggregating data from past negotiations, the tool highlights clauses that typically see the most redlines or cause the greatest delays. This intelligence helps lawyers prioritize negotiation strategies and tackle problem areas with confidence.
• One-click redlining and compliance automation: AI-based redlining streamlines the contract revision process by automatically applying preferred language and striking out non-compliant text. Legal teams can configure contract playbooks within the platform, enabling a “one-click” approach to re-drafting complex clauses. This saves an enormous amount of time, particularly for high-volume, repetitive agreements.
• Real-time risk assessment: Real-time risk scoring empowers lawyers to gauge how risky an entire contract is. The system can evaluate all clauses based on established criteria, generating an overall risk profile. This holistic perspective allows in-house teams to decide whether to proceed with additional negotiations, escalate the contract to senior leadership, or fast-track approvals.

Rising in-house legal costs: Key pain points for legal teams

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In-house legal costs have mounted in recent years for many reasons, including the tightening of regulations, the complexity of contracts, and an increase in the number of specialized tasks being handled by external counsel. However, understanding the pain points can help identify the best possible solutions to offset these costs.

Compliance issues and risk management

Legal departments are under more pressure than ever to ensure each contract meets both internal policies and industry-specific regulations. As new frameworks like General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) introduce higher stakes for compliance, risk management becomes a top priority.

Because contracts must be compliant with all such requirements, legal teams need dependable, AI-powered tools to audit terms and confirm adherence.

Escalation of legal matters

Contract negotiations are more complex due to new business models, multi-jurisdictional operations, and ever-evolving regulations. At the same time, potential risks of litigation loom large if contract terms are not carefully reviewed or if contractual obligations remain unenforced.

Corporate governance adds additional layers of scrutiny. Together, these factors create an environment where contract escalations are more frequent, increasing the dependence on in-house counsel.

Data privacy and security concerns

Increasing data privacy and security regulations force organizations to incorporate stringent compliance clauses into their contracts. This goes beyond domestic rules: multinational corporations must address a patchwork of international privacy laws, each with its unique requirements.

In-house legal teams must verify that contract provisions do not inadvertently expose the company to data breaches or non-compliance with local regulations.

Growing internal legal requests with limited resources

Today’s in-house legal teams handle more contracts than ever. Whether sales contracts, procurement agreements, or partnership deals, the pipeline of negotiations can quickly outpace the capacity of in-house staff.

The shortage of resources often results in bottlenecks, extended contract cycle times, and potential oversights. This necessitates automating repetitive review tasks and using standardized playbooks offered by AI tools for managing higher contract volumes.

Time constraints and work-life balance challenges

Long hours dedicated to contract reviews lead to burnout and diminished morale. Many in-house lawyers are working more, poring over documents to meet tight deadlines.

AI-driven contract review and automated redlining processes reduce these manual tasks, providing a more balanced workload. This helps teams allocate resources to strategic initiatives instead of repetitive administrative duties.

Legal teams as strategic business enablers

Shifting the perception of legal departments from cost centers to strategic partners requires solutions that maximize business efficiency and value.

Instead of focusing only on compliance, legal teams can use AI to expedite contract workflows, reduce time-to-sign, and help the organization capture new business opportunities faster. By automating routine elements of contract review, AI frees up lawyers to turn their attention to initiatives that directly impact revenue and growth.

Contract management tools: Top AI solutions for in-house legal teams

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Many AI contract management solutions have emerged to help legal departments tackle rising costs, mitigate risk, and streamline their workflows. Here’s a comparison of popular tools that can integrate well into your legal team’s existing workflow:

1. DocJuris

DocJuris is an AI-enabled platform that focuses on optimizing contract negotiation and review, helping in-house legal teams reduce risk and streamline contractual processes.

Key features:

• Negotiation heatmaps to identify contentious clauses
• Automatic clause analysis and risk identification
• One-click redlining and compliance tracking

Best for: Legal teams of all sizes that want to maximize efficiency in contract review and negotiation. DocJuris excels at identifying and managing risk in real-time and can be used in tandem with broader CLM systems for a more holistic contract lifecycle approach.

2. Conga

Aptus/Conga is an end-to-end contract lifecycle management platform that leverages AI to streamline contract drafting, clause tracking, and approval workflows. It is widely used by large enterprises looking to automate document generation and manage complex contractual processes efficiently.

Key features:

• AI-powered contract generation and clause tracking
• Workflow automation for approvals and e-signatures
• Centralized contract repository with risk scoring

Best for: Large enterprises that need end-to-end contract lifecycle management

Many legal departments integrate Conga’s workflow capabilities with DocJuris’s deeper clause analysis to ensure that the clauses being tracked or generated by Conga meet advanced risk criteria. DocJuris’s negotiation heatmaps and real-time risk assessments can feed directly into a Conga-managed contract process for enhanced efficiency.

3. Ironclad

Ironclad provides a collaborative contract risk management software solution that automates workflows, redlining, and real-time document collaboration. Its user-friendly interface helps legal teams and business stakeholders work more cohesively and finalize agreements faster.

Key features:

• Automated contract workflows and approvals
• Contract redlining and real-time collaboration
• Integrations with legal and procurement software

Best for: Companies that require contract automation and negotiation oversight

Ironclad excels in contract workflow management, while DocJuris provides advanced risk detection and negotiation intelligence. By integrating the two platforms, legal teams can standardize workflows through Ironclad and layer DocJuris’s AI to quickly identify high-risk clauses and accelerate the negotiation process.

4. Ntracts

Ntracts is designed for highly regulated industries, especially healthcare, where compliance and tracking are paramount. It uses AI to flag risky terms, maintain HIPAA compliance, and simplify the review process with customizable playbooks.

Key features:

• Compliance tracking for HIPAA and industry-specific regulations
• AI contract review to flag risky terms
• Customizable contract playbooks for legal teams

Best for: Healthcare organizations managing regulatory-heavy contracts

Ntracts’ focus on compliance complements DocJuris’s robust negotiation heatmaps and redlining automation. Together, they minimize risk throughout the contract lifecycle, especially for highly regulated industries requiring precise management of terms.

5. Oracle Fusion

Oracle Fusion offers a unified platform for enterprises operating on Oracle Cloud, seamlessly integrating contract, procurement, and financial data into one ecosystem.

Key features:

• Risk mitigation tools and compliance automation
• Built-in AI for supplier and contract analysis
• Integrations with ERP and finance tools

Best for: Enterprises using Oracle Cloud for procurement and legal contract oversight

By pairing Oracle Fusion’s broad enterprise suite with DocJuris, organizations gain specialized contract risk analytics to enhance the built-in functionalities. DocJuris’s real-time risk scoring can offer more nuanced assessments of supplier agreements, which is especially crucial for large-scale enterprises.

6. DocuSign CLM

DocuSign CLM combines intuitive contract analytics with the speed of eSignatures, helping organizations accelerate execution while maintaining robust compliance controls.

Key features:

• AI-powered contract analytics and obligation tracking
• E-signature integration for faster execution
• Pre-approved templates and compliance workflows

Best for: Organizations looking for AI-enhanced contract execution and management

DocuSign seamlessly handles the execution phase, while DocJuris bolsters the pre-execution review and negotiation process. Integrating DocJuris’s negotiation heatmaps, redlining automation, and risk assessments results in a more efficient, end-to-end contract workflow.

7. Workday

Workday’s contract management capabilities integrate with its finance, HR, and procurement modules, allowing enterprises to track contract renewals, monitor compliance, and manage spending from a centralized system.

Key features:

• Automated contract tracking and renewal alerts
• AI-powered compliance monitoring
• Advanced analytics for legal spend management

Best for: HR, procurement, and finance teams managing complex contracts

While Workday’s tools can address broader business processes, DocJuris provides specialized legal-centric features. By pairing the two, legal teams can ensure that each contract meets the organization’s unique risk parameters and that negotiations align with established playbooks.

How DocJuris enhances contract lifecycle management

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DocJuris enhances contract lifecycle management by providing advanced AI-powered tools that allow legal teams to manage contract risks and improve negotiation outcomes.

How in-house legal teams use DocJuris alongside CLMs

DocJuris’s AI-driven engine automatically identifies risky clauses and suggests alternative language. By pairing DocJuris with a CLM solution, in-house teams unlock complete visibility, from the contract drafting process to the contract signing process, while dramatically speeding up the high-friction negotiation phase.

The machine learning capabilities of DocJuris continuously adapt by learning from new contracts and organizational preferences, ensuring that legal standards remain current with regulatory changes and industry practices. Once a risky clause is identified, DocJuris can apply pre-approved legal language with a single click, ensuring consistent compliance across contracts.

How DocJuris integrates with major CLMs

When a contract draft is uploaded to a CLM platform, DocJuris can be triggered to perform an in-depth review that flags critical issues like indemnification and data privacy. Its heatmap functionality streamlines negotiations by highlighting "hot spots" within the contract to discuss key areas further.

Plus, the platform's integration with legal playbooks ensures automatic, standardized revisions, which leads to faster approvals and consistent contract management.

Streamline risk management and focus on high-value legal work with DocJuris

Real-time risk assessment and automated compliance checks ensure that each contract remains consistent with organizational standards and legal requirements. By combining DocJuris's AI-driven contract risk management with established CLM workflows, your legal teams can shift their focus from tedious document reviews to higher-value strategic tasks.

DocJuris empowers legal departments to:

• Reduce reliance on outside counsel: With fewer escalations and more accurate risk assessments, in-house teams can handle a larger portion of contract drafting and negotiations internally.
• Enhance work-life balance: Automating routine tasks alleviates time pressures. Lawyers can leave the office at reasonable hours, confident that the AI-driven tool has flagged all major risks.
• Demonstrate strategic value: By completing contract cycles faster, legal teams become trusted business enablers, driving new revenue opportunities while allowing them to mitigate contract risks.

Want to see firsthand how DocJuris can transform your contract review and negotiation processes?

Request a demo today.

FAQs

What are the main tools used for contract risk management?

Contract risk management uses AI-enabled contract review tools, integrated contract lifecycle management platforms, and secure document repositories. These tools help legal teams identify potential risks in clauses, automate approvals, and maintain compliance.

How is AI used in contract management?

AI and machine learning can review large volumes of contract text to identify common contract risks, such as deviations from standard language, highlight compliance gaps, and assign risk scores. This accelerates the review process and ensures that key clauses align with internal and external regulations.

What is the best contract management software?

The “best” contract management system depends on organizational priorities, contract volumes, and specific industry regulations. Platforms like Ironclad and DocuSign CLM offer robust CLM functionality, while DocJuris specializes in AI-powered negotiation intelligence.