Using AI to Transform Contract Negotiation: Opportunities and Avoidable Missteps

This article originally appeared in the 2025 Law Department Operations Survey, published by Blickstein Group. 

Will your next contract be negotiated by an AI agent?

What the LDO Survey Shows

This year’s Law Department Operations Survey, published by Blickstein Group, shows 20% of legal departments already use AI for this purpose today.

An additional 40% of legal departments are actively considering AI for negotiation. The data is clear: AI-powered contract negotiation is going mainstream.

And it couldn’t come soon enough. As companies scale, so do contract volumes. Legal departments are rarely resourced to handle the volume of contracts moving through a business, leading to tension in the business and the familiar refrain: “Legal is a bottleneck.”

Negotiations are the most glaring pain point in the contract lifecycle, and early versions of generative AI lacked the accuracy and context needed to address it. However, advances in AI now mean this incredibly nuanced work can be automated and significantly accelerated, without the need to add headcount. We often hear from lawyers who are amazed that a contract review that would have taken four hours now takes less than 30 minutes.

Use Cases in AI to Get Started

When implementing AI solutions, it is important to remember that AI is not magic.  Implementation is much faster than with traditional contracting tools, but to achieve the best results some investment of strategic thought and skill development is recommended.  Here are some key use cases I’ve identified and lessons I’ve come away with as I’ve helped legal departments adopt this technology.

Light-Weight Implementation Use Cases

AI Redlining Acceleration

AI speeds redlining by catching missed issues, checking references, and proposing edits. For best results, provide clear, contextual instructions based on your human playbooks, prior redlines, or standard templates to avoid outputs that require heavy cleanup.

AI-Generated Issues Lists & Summaries

AI produces fast, clear summaries, issues lists, and questions that improve collaboration. As always, context and clear instructions will generate outputs that match your expectations and always verify accuracy. 

Negotiation Preparation & Clause Support

AI explains clauses, drafts comments, and suggests fallback positions to upskill negotiators. Human reviewers must supply company context—AI alone cannot infer strategic rationales for your specific company positions.

Advanced Implementation Use Cases

AI-Enabled Playbooks for Automation

AI extracts contracting positions, redlines in accordance with approved responsive positions, and flags deviations at scale. Validate all playbooks against company strategy, and revisit them as models evolve or business priorities shift.

Risk-Based Contract Triage & Delegation

AI stratifies contracts by risk and complexity, enabling teams to route simple work to the business or automate low-risk agreements. Align stakeholders on acceptable risk—100% mitigation is unrealistic and unnecessary.

What’s next

This is only the beginning.  As organizations expand the context available to AI with cross-pollination of contracting, financial, and operational systems, we will be able to strategically improve contracting to more meaningfully address company risk.  For example, an AI assistant could generate a comparison of past agreements with similar counterparties and then use extra contractual organizational data to show how those terms have affected the company.  Contracts will also be able to be dynamically redlined based not only on strategic positions but tailored to the counterparty’s preferences, tone, language, and relationship history. 

The sooner you adopt AI in this space, the better positioned you will be to leverage its accelerating capabilities.

For a deeper look at AI adoption in contracting and other key shifts across corporate law departments, read the 2025 Law Department Operations Survey.