AI-supported risk checks of NDAs and CoCs: how legal departments benefit

Artificial intelligence can relieve legal departments of routine tasks such as checking non-disclosure agreements (NDAs) or codes of conduct (CoCs). These documents are part of daily business in many companies, but they harbor considerable risks if critical clauses are overlooked.

AI-supported tools can be used to systematize recurring audits, identify risks at an early stage and speed up decision-making processes. However, AI tools alone are not enough for success. Legal departments should bear a few points in mind when implementing them:

Automated inspections: More efficiency and safety

In principle, AI offers legal departments many advantages, because the manual review of NDAs and CoCs takes a lot of time and ties up highly qualified legal expertise in the wrong places. AI provides a remedy and directs legal expertise specifically to where it creates clear added value:

• Significantly shorter processing times: Standard contracts or codes of conduct can be checked in just a few minutes. The AI identifies, evaluates and categorizes relevant clauses, allowing lawyers to focus on the final substantive review and more complex issues.
• Standardized and comprehensible results: All audits are based on a centrally stored and documented set of rules. This ensures a high degree of comparability and traceability of the results, regardless of who carries out the audit.
• Conservation of legal expertise: Recurring tasks are automated, meaning that valuable legal expertise is used specifically where it is really needed for case processing or strategic decisions.

Foundation of success: the company-specific set of rules

The actual benefit is not generated solely by the AI technology used, but in conjunction with the underlying company-specific set of rules.

• The quality of the risk check for NDAs and CoCs depends largely on an internal audit guideline. This should be based on a systematic analysis of existing templates, guidelines and all relevant review criteria.
• With the help of specially adapted AI bots, contracts are evaluated using these guidelines. In this way, the lawyers can immediately see where there are potential liability risks or impermissible provisions, which clauses need to be adjusted and to what extent a contract deviates from your company’s compliance standards.

Structured implementation process

To ensure the quality and acceptance of the new testing procedure, a clearly defined introduction process is crucial:

• Practical testing: Legal departments should plan a pilot phase. This is where the process is tested and further developed based on employee feedback and, for example, the rules are refined. In this way, the suitability for actual work processes can be ensured.
• Scaling and standardization: Once the pilot phase has been successfully completed, the standardized procedure can be transferred to other contract types (e.g. supplier or service contracts). This leads to a scalable and standardized procedure for checking different documents.

Competence development and acceptance in the team

AI takes the pressure off, but does not replace legal expertise. The team remains the decisive success factor. The introduction should therefore be accompanied by targeted skills development measures.

• Strengthening digital skills: The introduction of AI tools should be accompanied by targeted training. Employees should be enabled to interpret the results competently, understand the underlying test method and apply the procedures independently.
• Create transparency: The technology used, how it works, its potential and its limitations should be communicated openly. Transparency is the basis for acceptance within the team.
• Strategic use of expertise: Legal departments should actually use automation to shift routine tasks. The legal expertise that is freed up can then be used more intensively to handle complex and strategic tasks.

AI tools are a quick win for the legal department

The review of NDAs and CoCs are prime examples of AI-supported document review, as they enable rapid success. You achieve clear added value through a more efficient, secure and future-oriented review with tangible benefits in terms of speed, transparency and quality.

However, clear governance in the form of internal guidelines, employee training and the strategic use of legal expertise are important. This not only relieves the burden on day-to-day business, but also strengthens the digital expertise of the entire team in the long term.