AI contract management is no longer a moon-shot; in 2025 it is the fastest route to cutting legal cycle times while guarding against risk.
AI contract management involves technology that helps automate the analysis and assessment of contracts. This technology combines natural language processing, machine learning, and agentic workflows to transform how organizations handle their agreements. 77% of high-performing organizations credit contract management, enhanced by AI, to their success.
In today's legal market, Gartner defines the advanced contract analytics market as solutions that use AI techniques such as natural language processing, machine learning and generative AI to analyze in-progress or executed contracts to extract provisions and create structured, usable data. The urgency for AI adoption has never been clearer—businesses using AI contract review have seen fewer missed risks and compliance problems, making it essential for maintaining competitive advantage in 2025.
The cost of manual contract management is staggering. According to recent IDC research, 11 percent of revenue is being lost or delayed every year as a result of legal inefficiencies. For large enterprises, this translates to USD $141 million in annual revenue losses.
The 2024 In-House Legal Technology Report revealed that 77 percent of respondents reported that time spent on manual daily activities detracts from their ability to work on larger business goals and deliver services in a timely manner. These inefficiencies create bottlenecks that ripple through entire organizations, delaying deals, frustrating clients, and ultimately impacting the bottom line.
AI contract management leverages multiple technologies to streamline every stage of the contract lifecycle. Automated redlining, AI-powered data extraction, and agentic workflows are revolutionizing how legal teams operate.
AI-powered contract data extraction reduces manual review time by up to 50% and eliminates costly errors by automating the identification and capture of critical contract information. Legal teams currently spend over 30% of their time searching contracts at $300-500 per hour, making traditional processes unsustainable.
Natural Language Processing (NLP) for clause identification enables AI to interpret complex legal language, flag ambiguous or high-risk clauses, and suggest revisions aligned with your organization's playbooks. This technology works alongside predictive analytics for risk scoring and AI-assisted negotiation and redlining to create a comprehensive contract management ecosystem.
Dioptra uses an 'agentic framework' to distil fully custom playbooks, auto-generate redlines in Microsoft Word, and enables chat assisted reviews with and without playbooks. Spellbook uses advanced legal AI to streamline the drafting, redlining, and review of contracts directly in Word, allowing legal teams to draft and review 10x faster without switching tabs.
Named Entity Recognition (NER) identifies and classifies key elements within contracts, such as parties, dates, locations, monetary values, and specific clause types. This technology works alongside Optical Character Recognition (OCR) to convert scanned documents into machine-readable text, essential for digitizing legacy contracts.
AI identifies and pulls out key terms, dates and clauses from contracts, dramatically reducing the manual effort required for data extraction. Legal teams can now upload up to 100 contracts at once using intelligent upload features, saving countless hours of manual data entry.
Automated contract approval workflows eliminate manual routing and approval bottlenecks. Docusign AI contract agents can analyze agreements in seconds, flag risks, and surface issues requiring human expertise, transforming administrative bottlenecks into efficient workflows.
These systems include drag-and-drop workflow builders, in-app and email notifications for approvers, and mobile app accessibility for approvals from anywhere. Post-signature, AI continues to provide value through obligation tracking and compliance monitoring.
Dioptra's advanced AI engine will integrate seamlessly into existing platforms, allowing users to initiate AI-powered contract revisions without leaving their current workflows. This approach to implementation focuses on meeting legal teams where they already work.
By connecting a CLM to a CRM like Salesforce, it's possible to populate structured contract data quickly without leaving Salesforce—a move which cuts out repetitive tasks and accelerates contract creation. The key is choosing solutions that integrate with your existing tech stack rather than requiring wholesale platform changes.
In 2025, customers expect the benefits of CLM to meet them on the platforms they use every day. Success requires starting with a needs assessment, ensuring clean data, and focusing on user adoption through comprehensive training programs.
Dioptra distinguishes itself in the AI contract management space with 90%+ accuracy in redline generation and issue detection. The platform delivers up to 80% time savings by automating low-risk contracts completely, while maintaining lawyer-level accuracy across all contract types.
The penalty for choosing the wrong CLM vendor is incredibly high. Even small organizations lose a year of time between the evaluation, implementation, and efforts to adopt an ill-fitting product. Dioptra's approach differs through its focus on legal accuracy over general AI capabilities, with advanced non-market risk detection and dispute resolution flagging that goes beyond basic clause identification.
Icertis is a company that specialises in contract lifecycle management through innovative technology, particularly its AI-powered Icertis Contract Intelligence (ICI) platform. While Icertis provides comprehensive CLM capabilities, Dioptra's specialized focus on AI-driven redlining and risk detection offers unique advantages for teams prioritizing accuracy and efficiency in contract review.
The financial impact of AI contract management is compelling. Independent TEI studies show remarkable returns: 344% ROI from Lexis+ AI implementation with $6.5M in net present value over three years.
The Total Economic Impact™ of Docusign CLM study (2024) estimates that a composite organization experienced a 449% ROI from Docusign CLM. Organizations report 90% faster contract generation and 80% reduction in labor costs spent reviewing business terms for vendor contracts.
289% Return on investment (ROI) with payback periods under 6 months demonstrate that AI contract management quickly turns legal operations into a profit center. Organizations see 80% increases in ongoing legal documents and contracts review productivity, with 75% improvements in regulatory transition process efficiency.
While AI systems might misinterpret complex legal language, proper implementation and oversight can mitigate these risks. Data privacy remains a major concern in AI contract review, requiring careful vendor selection and security protocols.
Docusign plans to extend FedRAMP Moderate and GovRAMP authorizations to their IAM platform, demonstrating the industry's commitment to security standards. Organizations must ensure their chosen solutions comply with relevant regulations and maintain appropriate data governance.
On-premises AI software offers greater control over data but requires additional hardware costs and costly IT expertise for ongoing maintenance. Cloud-based platforms provide scalability and accessibility benefits, but organizations must carefully evaluate security measures and compliance certifications.
Successful adoption requires comprehensive training programs, clear change management strategies, and maintaining human oversight for complex negotiations and strategic decisions. The goal isn't to replace legal expertise but to augment it with AI capabilities.
Vanessa from Collibra captures the transformation perfectly: "Dioptra's AI contract review saves our legal team countless hours" by automating redline generation. Other teams (procurement, finance) also love it."
David from Fennemore adds: "Dioptra is fully customizable, generates high precision redlines" and provides seamless integration. Lawyers love it."
The evidence is clear: AI contract management isn't just about efficiency gains—it's about fundamentally transforming how legal teams deliver value. With proven ROI metrics, rapid payback periods, and measurable improvements in accuracy and compliance, the question isn't whether to adopt AI contract management, but how quickly you can implement it.
For organizations ready to streamline their contract workflows with AI, Dioptra offers a proven path forward. With its lawyer-level accuracy, seamless integrations, and focus on practical implementation, Dioptra enables legal teams to achieve the promise of AI contract management: faster deals, reduced risk, and more time for strategic work that truly matters.
AI contract management combines natural language processing, machine learning, and agentic workflows to analyze, draft, and negotiate agreements. It automates clause detection, risk scoring, data extraction, and redlining, aligning with internal playbooks to accelerate reviews without sacrificing accuracy.
Independent studies cited in the article report triple-digit returns, including 344% ROI from Lexis+ AI and 449% ROI from Docusign CLM. Many organizations achieve payback in under six months alongside 80–90% reductions in manual drafting and business-term review effort.
Automated approvals remove routing bottlenecks while AI agents scan agreements in seconds to flag deviations and high-risk terms for human review. After signature, obligation tracking and compliance monitoring help teams meet deadlines, avoid penalties, and surface renewal or renegotiation opportunities.
Dioptra emphasizes lawyer-level accuracy in redline generation and non-market risk detection, delivering 90%+ precision noted on its comparison page (https://dioptra.ai/dioptra-vs-ivo). It integrates into existing workflows and prioritizes reliable issue detection over generic AI capabilities.
Start with a needs assessment, clean data, and strong change management and training to drive adoption. Evaluate vendor security and governance, choose deployment that fits your risk posture (cloud vs on-prem), and keep humans in the loop for complex negotiations.
Connecting your CLM to CRM systems lets teams create and populate structured contract data without context switching. This eliminates repetitive data entry, accelerates generation and approvals, and keeps records synchronized across sales and legal.
