Most in-house legal teams know about contract review software and are aware it could help speed up their own reviews, but with the vast number of vendors in the market very few know where to start when trying to find the right tool. All the tools sound remarkably similar, so how do you narrow down your shortlist and choose something that will genuinely do the job well, deliver speed to value quickly and not require significant upfront investment in terms of your lawyers’ time.
This article is a practical guide for GCs of mid-sized and large companies, Heads of Legal Ops and in-house legal teams looking for a smarter way to handle the constant flow of third-party contracts. It will help you feel confident about where to start, what to ask when evaluating tools and how to avoid the most common missteps.
1. Start With the Real Problem You Are Trying to Solve
Before you look at any tools, get clear on the problem you are trying to fix. Contract review software is designed to help you review third-party papers, the agreement the other side has sent over. It speeds up the process of checking whether you can accept their wording and suggests edits that align with your risk position.
If your biggest pain points are managing contract workflows, triaging requests from the business, escalating matters for approval, collating signatures, searching your contract repository or keeping track of post-signature obligations, then you are not looking for contract review software at all. You are in the market for a CLM. Those tools solve very different problems.
The best contract review tools are point solutions. They focus deeply on one task. They help you review third-party contracts quickly, consistently and in line with your risk appetite. If your primary problem is the volume and speed of third-party review, choosing a dedicated point solution will deliver far better results than buying an end-to-end CLM that simply includes a light review feature on the side. Depth wins over breadth for this task.
2. Get Clear on Your Current State and Whether You Are Ready
Before you start shortlisting tools, take a quick, honest look at your current contracting landscape. You do not need detailed metrics or dashboards. You only need a basic understanding of what your team is dealing with so that your pilot, vendor conversations and business case are grounded in reality.
Start with a few simple questions.
- What are the top three contract types you review most often?
- How many of these come in each month?
- How long do they currently take?
- What actually slows you down?
Do you have any kind of playbook or written positions?
If the team cannot answer these questions, buying technology will not fix the underlying issues. On the other hand, if you have a high volume of similar third-party contracts coming in and the team feels like they are making the same changes repeatedly, you are exactly in the sweet spot where contract review software brings immediate value.
This step does not need to be heavy or perfect. It just needs to be honest.
3. Playbooks: The Secret to Success in Legal AI
Playbooks are the single biggest predictor of whether contract review software delivers value. They do not need to be perfect, polished or complete, but you do need something that sets out your positions and how you want terms negotiated.
A pilot is often the best time to build or refine your playbook. You get to test how the tool supports playbook creation, whether the vendor provides templates or examples and how easily the tool aligns with your preferred fallbacks.
Tools that make playbook creation simple are a strong sign of maturity. Tools that expect your team to write everything from scratch, or that ignore your positions entirely, are unlikely to fit your organisation long term.
4. How to Test Whether a Legal AI Tool Truly Understands Contracts
Once you have a rough playbook, the next step is assessing how well a tool understands your contracts. What matters is not the vendor’s claims but how the tool behaves when you run one of your documents through it.
Contract review tools that use AI do not retrain the underlying models. They build layers around them. Some also rely on older engineered approaches that remain extremely reliable. The question for buyers is simple. Does the tool behave like it understands contracts.
Start by checking basic clause identification. Run one of your contracts, not the vendor’s curated demo. The tool should recognise key clauses such as liability, indemnity, termination, payment terms, IP, confidentiality and data protection obligations. If it misses obvious components, it will not perform well at scale.
Next, see if it aligns with your playbook. The tool should flag issues that matter to you, apply your fallbacks consistently and avoid raising irrelevant points.
Then assess its structural understanding. Commercial contracts rely on cross-references and dependencies. The tool should understand how clauses fit together and how changes in one place affect obligations elsewhere.
Defined terms are another clear differentiator. Strong tools detect definitions wherever they appear, track them throughout the contract and update them automatically if you change a term during review. If a tool cannot handle defined terms reliably, the redlines will not be usable.
Consistency matters too. Run two or three similar agreements through the tool. If you get very different suggestions each time, the tool is relying too heavily on generic model output and not enough on real contract logic.
Finally, evaluate ease of review. Even the best analysis is pointless if the output is messy. Lawyers should be able to accept or reject suggestions easily and export clean versions.
Always bring your own contract. Ideally a messy one with unusual formatting, multiple schedules or inconsistent numbering. That is when the differences between tools become very clear.
5. Speed to Value and Onboarding
Speed matters. You want a tool that gives you value early rather than one that requires weeks of configuration before it becomes useful.
Ask vendors what you get on day one. Ask how much they will support you during onboarding. Ask whether they will help you build or refine your playbooks. Ask how long you should expect before you start seeing consistent, usable redlines.
Good vendors bring structure, pace and hands-on support. Weak vendors give you a login and leave you to figure it out.
6. How to Create a Strong Shortlist for Contract Review Software
Once you have your business case, the next step is to narrow the market to a shortlist of three vendors. Any more than this becomes unmanageable and spreads the team too thin.
Start by focusing on your contract profile and the level of depth you need. Speak to peers, check references and ask vendors for real examples of how their tool performs on commercial contracts rather than generic samples.
If you can, bring in an experienced Legal Ops professional or an external expert. They can help you filter the noise quickly and produce a shortlist that suits your organisation’s needs.
A strong vendor will also be open about where their tool struggles. Ask them to show you a contract type or clause they know the tool gets wrong and how they are addressing it. Vendors who are transparent about limitations are far more likely to be reliable partners. Vendors who stick to polished demos and avoid discussing weaknesses are ones to be cautious of.
A useful question at this stage is what the tool cannot do yet and how the vendor plans to improve it. Vendors who answer plainly and share their roadmap demonstrate maturity.
The aim here is simple. Identify the two or three tools that are genuinely worth your time.
7. How to Run a Short, Structured Pilot
Once you have your shortlist, start with the tool that appears strongest on paper. Run a short, structured pilot that lasts three to four weeks. Choose one or two contract types that represent real volume.
Give your reviewers a clear script. Define what they are testing, what good looks like and how you will measure success. Hold weekly check-ins to keep everything on track.
At the end of the pilot, if the tool performs well, move forward. If not, do not hesitate to run a second short pilot with the next tool from your shortlist. This is not wasted time. It is exactly why you created a shortlist in the first place.
A head to head pilot across two tools can be very effective, but it requires strong coordination. If you can, involve a Legal Ops professional or a project manager to run the process. Good coordination makes the differences between tools far clearer and helps you reach a confident final decision.
8. Conclusion
Contract review software can transform how quickly and consistently your team reviews third-party contracts, but only if you approach it with clarity. Define your problem. Understand your current state. Build a rough playbook. Create a tight shortlist and test each tool in a structured way. Focus on speed to value, ease of use and real contract understanding.
Choose the tool that genuinely fits your contracting profile, not the one that looks the slickest in a demo. The right point solution, implemented well, will free your lawyers from repetitive review, reduce turnaround times and give the business faster, more consistent contracting.
