Contract review is one of the most time-intensive tasks in legal practice. AI-powered contract review tools are helping Australian lawyers work through documents faster, identify issues more consistently, and focus their attention on the matters that require the most careful analysis.

This guide covers how AI contract review works, which tools are available to Australian lawyers, and how to use them responsibly.

How AI Contract Review Works

AI contract review tools use machine learning and natural language processing to analyse contract documents and identify issues, anomalies, and missing provisions. Most tools work by:

1. Ingesting the document — the contract is uploaded to the platform in PDF or Word format
2. Analysing the text — the AI identifies clauses, compares them against a baseline or playbook, and flags issues
3. Generating a report — the tool produces a summary of findings, often with suggested edits or alternative language

The quality of the output depends on the quality of the underlying model and the playbook or baseline it is comparing against. Purpose-built legal AI tools generally outperform general-purpose AI tools for contract review.

Key AI Contract Review Tools

Luminance

Luminance is one of the most widely used AI contract review platforms in Australian and international law firms. It uses machine learning to analyse contracts and identify anomalies, missing clauses, and unusual terms.

Luminance is particularly useful for:

• M&A due diligence — reviewing large volumes of contracts quickly
• Lease reviews — identifying non-standard terms across a portfolio
• Contract portfolio analysis — assessing risk across a large number of agreements

Luminance can be trained on a firm's own precedents and playbooks, which improves the accuracy of its analysis over time.

Harvey

Harvey is a purpose-built legal AI tool that includes contract review capabilities alongside research and drafting assistance. Harvey can review contracts, identify issues, suggest alternative language, and generate summaries of key terms.

Harvey is used by a number of large Australian and international law firms. Its contract review capabilities are designed for complex commercial contracts rather than high-volume commodity work.

Microsoft Copilot

Microsoft Copilot can assist with contract review within Microsoft Word. It can summarise documents, identify key clauses, and suggest edits. It does not have legal-specific training, so its analysis is less sophisticated than purpose-built legal AI tools. It is most useful for reviewing shorter, less complex documents.

ChatGPT and Claude

General-purpose large language models can assist with contract review tasks such as summarising key terms, identifying potential issues, and suggesting alternative language. They are not trained specifically on legal data and their outputs must be carefully verified. They are best used as a starting point rather than a comprehensive review tool.

AI in Due Diligence

Due diligence is one of the highest-value applications of AI contract review. In M&A transactions, lawyers may need to review hundreds or thousands of contracts in a short timeframe. AI tools can:

• Identify contracts that require attention based on specific criteria (change of control clauses, termination rights, unusual terms)
• Summarise key terms across a large document set
• Flag missing provisions or non-standard language
• Generate a due diligence report summarising findings

This allows lawyers to focus their time on the contracts that present the greatest risk, rather than reading every document in full.

Professional Obligations

Using AI for contract review does not change your professional obligations. Key considerations include:

Accuracy. You remain responsible for the accuracy and completeness of your review. AI tools can miss issues, mischaracterise clauses, and produce false positives. Every AI-generated finding must be verified by a qualified lawyer.

Confidentiality. Before uploading client contracts to any AI platform, review the platform's data handling policies. Ensure the platform meets your confidentiality obligations and, where relevant, your client's data security requirements.

Scope of review. Be clear with clients about what the AI-assisted review covers and what it does not. AI tools are not a substitute for a comprehensive legal review.

Getting Started

If you are considering introducing AI contract review into your practice, a practical approach is to:

1. Start with a pilot. Choose a specific type of contract or matter type and test the tool on a small number of documents before rolling it out more broadly.
2. Develop a playbook. Most AI contract review tools perform better when trained on your firm's own precedents and standards. Invest time in developing a playbook that reflects your practice.
3. Train your team. Ensure everyone using the tool understands its limitations and the review process required.
4. Review your engagement terms. Consider whether your engagement letters need to be updated to reflect the use of AI tools in your practice.