AI in the Legal Industry: Transforming Contract Management
A recent report highlights contract management as the area in the legal field expected to undergo the most significant transformation due to artificial intelligence. According to a study by SpotDraft, a contract lifecycle management platform, 70.8% of legal professionals foresee major AI-driven changes in contract management within the next three years. The top priority for improvement is clause identification and analysis, cited by 74% of respondents.
“Contract management is where AI delivers the most immediate value for legal teams,” said Akshay Verma, COO of SpotDraft. Integrating AI shifts contracts from being administrative burdens into strategic assets. Teams that leverage AI effectively move beyond simple automation of reviews to extracting actionable business intelligence from contract language, enabling smarter, strategic decisions.
Key Findings
- Usage frequency drives productivity: Among daily AI users, 91% report improved productivity, with 29% seeing significant gains. In contrast, only 59% of monthly users experience improvements, underscoring the importance of consistent AI use.
- Experience reduces ethical concerns: Legal professionals familiar with AI express fewer ethical concerns than those with limited exposure, challenging the notion that more AI use raises ethical worries.
- AI is not displacing legal roles: Despite fears of job losses, 73.5% of organizations report no staffing changes due to AI. In fact, many legal teams are expanding alongside AI adoption.
- Essential skills are evolving: The future legal professional needs strategic thinking (30.5%), advanced legal expertise (20.6%), and knowledge of AI tools (26.2%). This reflects shifting demands on talent.
Most legal teams save between one and five hours per week through AI (41% of respondents). However, greater benefits require more consistent use, better integration with existing systems, and precise measurement of return on investment.
Recommendations for Legal Teams
- Start with high-volume, low-risk contracts to demonstrate quick wins with AI.
- Implement AI in stages to build user confidence progressively.
- Focus initially on productivity improvements rather than cost-cutting.
- Establish feedback loops between AI users and implementation teams to refine processes.
“AI allows lawyers to focus on strategic advice by handling routine tasks,” said Tommie Tavares-Ferreira, Head of Legal Operations at Cedar. This shift frees legal teams to concentrate on work that requires human judgment.
The 2025 AI Impact Report is based on data from 192 legal professionals, mainly from North America, covering organizations of various sizes and industries. For executives and strategy leaders, the report signals a clear opportunity to rethink how legal teams operate and leverage AI for competitive advantage.
For those interested in enhancing AI skills relevant to legal and business strategy roles, consider exploring specialized courses at Complete AI Training.
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