Legal departments are rapidly adopting AI for contract review, with usage rising 75% year-over-year, according to the 2025 State of Contracting Survey released today by LegalOn Technologies and In-House Connect. The survey of 286 legal professionals finds a technology transformation still in its early stages but growing quickly, with nearly two-thirds of legal teams actively evaluating or learning about AI solutions.
“This survey confirms what we are hearing from legal teams every day,” said Daniel Lewis, US CEO of LegalOn Technologies. “AI for contract review is no longer a hypothetical–it’s becoming an essential tool to save time, turnaround contracts faster, and automate tedious work. We’re fast approaching the point when lawyers will think, ‘How did I ever do this work without AI?’”
Key findings from the survey include:
- Early Stages of AI Adoption: AI adoption for contract review grew 75% year-over-year, with 14% of legal teams now using it (up from 8% in early 2024). Meanwhile, 64% are actively exploring AI solutions, reflecting growing momentum in the early stages of adoption.
- Unlocking Efficiency and Value: Legal teams see clear benefits for AI in contract review. Key advantages cited:
- Time savings (69%)
- Faster turnaround times (69%)
- Reduced tedious work (69%)
- Organizations are Ready: Organizations of every size are evaluating and adopting contract review AI. Many teams are looking for solutions that are ready-to-use with pre-built playbooks, and others are looking to turn their own playbooks or templates into AI review.
Contract review has emerged as a leading use case for AI in legal departments, driven by pain points around manual review and the alignment of AI’s capabilities and this need. Grounded in defined standards like playbooks, contract review involves analyzing documents against clear criteria, making it well suited for AI and easier for legal teams to verify AI’s work and maintain quality control than other legal AI use cases.
The growing interest in AI reflects the significant workloads legal teams manage. The survey found that 52% of organizations handle between 101 to 1,000 contracts annually, with most spending 2-4 hours per contract. For a typical team reviewing 500 contracts, this equals approximately 188 working days devoted to contract review alone.
Smaller legal teams, often managing high contract volumes with limited resources, stand to benefit significantly from AI adoption. While only 12% currently use AI for contract review (compared to 18% of large organizations), 64% are evaluating solutions. Adopting pre-built playbooks could enable these teams to scale AI use quickly while maintaining quality. For larger organizations, turning their playbooks and templates into AI review offers a fast path to speeding review across hundreds or thousands of contracts.
The potential of AI-powered contract review extends beyond time efficiency. By improving accuracy and reducing manual workloads, AI allows legal teams to refocus to higher-value, strategic work, transforming how contracts are negotiated and legal work is done.
