A vendor sends over a 30-page master services agreement. The legal team needs to find the indemnification clause, check the liability cap, review the termination conditions, confirm IP ownership, and flag anything non-standard. An experienced attorney takes 45 minutes to an hour per contract. A junior associate takes longer.
Now multiply that by five contracts arriving in the same week — a new vendor agreement, a customer MSA redline, two NDAs, and a lease amendment. That’s five hours of clause-by-clause reading. Not negotiating. Not advising the business. Just finding and extracting the relevant terms.
Contract review isn’t optional. But the extraction step — locating and pulling out specific clause language — is mechanical. The legal analysis of those clauses requires expertise. Finding them in a 30-page document doesn’t.
What the workflow does
The Contract Clause Extraction workflow processes contracts in three steps:
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Upload contract — Upload a PDF, Word document, or scanned image. The workflow handles multi-page contracts, exhibits, and amendments. You can process one contract at a time or upload a batch for comparison.
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AI extracts key clauses — The AI reads the entire contract and extracts structured data for each key clause:
- Parties: Full legal names, addresses, and roles
- Term and renewal: Start date, end date, renewal conditions, auto-renewal terms
- Payment terms: Amounts, schedule, late payment penalties, price escalation
- Termination: Conditions for termination, notice periods, termination for cause vs. convenience
- Liability cap: Dollar amount or formula, exclusions, carve-outs
- Indemnification: Scope, mutual vs. one-way, exclusions, survival period
- IP ownership: Who owns what, license grants, work product ownership
- Confidentiality: Scope, duration, exclusions, return/destruction obligations
- Non-standard clauses: Anything unusual — audit rights, most-favored-nation pricing, non-compete provisions, data processing terms
Each extraction includes the exact section reference and a brief risk assessment.
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Structured output — The extracted clauses are presented in a structured format: a summary table at the top with key terms, followed by detailed extraction with the original clause language, the AI’s plain-English interpretation, and risk flags. If you uploaded multiple contracts, the workflow generates a comparison table showing how each contract handles each clause.
Processing takes 30-60 seconds per contract.
Setting it up
Setup takes about 5 minutes in the Legal department pack:
- Select the Contract Clause Extraction recipe
- Configure your clause taxonomy — start with the built-in defaults or add your organization’s specific clause types
- Set risk thresholds — what makes a liability cap “acceptable” vs. “flagged” for your company
- Define your standard terms — the workflow can compare extracted clauses against your preferred position and highlight deviations
- Choose output format — summary table, detailed report, or both
The workflow adapts to your organization’s risk tolerance and standard terms. A startup might accept uncapped liability from a key vendor; an enterprise would flag it immediately.
The comparison table
The most powerful feature for teams reviewing multiple contracts is the comparison view. Upload three vendor agreements and get a side-by-side table:
| Clause | Vendor A | Vendor B | Vendor C |
|---|---|---|---|
| Liability cap | $1M | Uncapped | 12 months fees |
| Termination notice | 30 days | 90 days | 60 days |
| IP ownership | Customer owns | Joint | Vendor owns |
This makes vendor selection and contract negotiation dramatically faster. Instead of reading three contracts end-to-end, the legal team sees exactly where they differ and can focus negotiation on the terms that matter.
The math on time saved
For a legal team reviewing 5 contracts per week:
- Manual review: 1 hour per contract = 5 hours/week
- AI extraction: 1 minute per contract + 15 min review of extracted terms = ~20 min/week
- Net savings: 4.5+ hours/week = 230+ hours/year
For a legal team with blended rates of $150/hour, that’s $34,500/year in recaptured attorney time. Time that can be redirected to negotiation, advisory work, and strategic legal support.
What the human still does
The workflow extracts and organizes. Attorneys still:
- Evaluate risk. The AI flags a liability cap as “below market.” Whether that’s acceptable depends on the deal size, relationship, and business context.
- Negotiate. Extraction tells you what the contract says. Deciding what to push back on requires legal strategy.
- Advise the business. “This clause means we’re responsible for X in scenario Y” — translating legal terms into business impact requires expertise.
- Draft redlines. The AI identifies non-standard terms. The attorney decides what alternative language to propose.
Clause extraction automates the finding. Attorneys focus on the thinking.