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AI for Legal · Day 1 of 5 ~40 minutes

Day 1: AI for Contract Review and Analysis

Lawyers spend 30-40% of their time on document review. AI can't replace legal judgment — but it dramatically accelerates first-pass review, issue spotting, and summary drafting.

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What You'll Build

A contract review workflow: AI-assisted issue spotting on a sample NDA, a clause extraction prompt, and a contract summary template you can use for any agreement.

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Section 1 · 8 min

What AI Can and Cannot Do in Legal Work

The legal profession has strict rules about competence and unauthorized practice. Before using AI in legal work, understand the boundaries.

textAI in Legal — Clear Boundaries
AI does well:
  → First-pass issue spotting in contracts
  → Summarizing documents in plain language
  → Comparing two versions of a contract
  → Explaining legal concepts to clients
  → Drafting first versions of standard clauses
  → Identifying missing provisions
  → Research starting points (requires verification)

AI should NOT do:
  → Give final legal advice
  → Replace attorney review on important matters
  → Be cited as a legal research source without verification
  → Access confidential client data without proper safeguards
  → Make strategic or judgment calls on litigation matters

Confidentiality is paramount. Never paste client information into consumer AI tools. Use enterprise versions with BAA/DPA agreements, or work with anonymized examples. In many jurisdictions, improperly sharing client data with third-party AI tools may violate professional responsibility rules.

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Section 2 · 12 min

Issue Spotting in Contracts

Issue spotting — reading a contract to find problems, missing terms, or unfavorable clauses — is one of the most time-consuming parts of contract review. AI can do a first pass in seconds.

textIssue Spotting Prompt
Review this contract as a business attorney representing the
party marked as [CLIENT NAME/BUYER/SELLER].

Identify and explain:
1. Provisions that are unusually favorable to the other party
2. Missing standard provisions I should request
3. Ambiguous language that could create disputes
4. Obligations my client may not be able to meet
5. Liability or indemnification risks

For each issue: identify the specific clause, explain the risk,
and suggest how I should address it in negotiation.

Contract type: [e.g., NDA, SaaS agreement, employment contract]
Contract:
[paste sanitized contract text]

The output is a structured issue list — not legal advice. Treat it as a checklist to review, not a final analysis. AI occasionally misses context or jurisdictional nuances that require attorney review.

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Section 3 · 20 min

Contract Summary and Clause Extraction

Two additional high-value prompts for contract work:

Plain Language Summary. Clients often need to understand contracts they've received. AI can convert dense legal language to plain English quickly:

textPlain Language Summary Prompt
Summarize this contract in plain English for a non-lawyer.
Structure the summary as:
1. What this agreement does (1 sentence)
2. What each party agrees to do
3. Key dates and deadlines
4. Payment terms
5. What happens if something goes wrong
6. How to exit the agreement
7. Three things the reader should pay attention to most

[paste contract]

Clause Extraction. For due diligence or contract database work, extracting specific clauses across multiple contracts is tedious. AI handles this well:

textClause Extraction Prompt
Extract the following provisions from this contract.
If a provision is not present, say "Not found."
Quote the exact language and note the section reference.

1. Limitation of liability clause
2. Indemnification clause
3. Governing law and jurisdiction
4. Term and termination provisions
5. Non-solicitation or non-compete
6. Intellectual property ownership
7. Dispute resolution mechanism

[paste contract]

What You Learned Today

  • The boundaries of AI use in legal work — what it can and cannot do
  • How to structure an issue-spotting prompt for contract review
  • How to generate plain-language summaries from complex legal documents
  • How clause extraction works for due diligence and contract database work
Your Challenge

Go Further on Your Own

  • Take a standard NDA (find one online for practice purposes) and run it through the issue spotting prompt. How useful is the output? What would you add based on your legal knowledge?
  • Use AI to compare two versions of the same contract: 'Compare these two versions and list every material change, explaining the legal significance of each change.'
  • Ask AI to draft a 'contract review checklist' for the type of contracts you review most often. Use it as a quality control tool.
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