Demystifying Generative AI in Contract Management: Practical Implications for Indian Businesses Seeking Efficiency and Security

✍️ Opinions

Sanvi Barjatya

16 Jun 2025 — 5 min read

Demystifying Generative AI in Contract Management: Practical Implications for Indian Businesses Seeking Efficiency and Security, Aditya Pandranki, Founder and CEO, DOQFY

This article has been attributed to Aditya Pandranki, Founder and CEO, DOQFY

Increased use of AI to streamline automation is driving a significant transformation in contract lifecycle management (CLM).What earlier used to be a manual, labour intensive and error prone domain is now being replace by a more advanced technology.

Research indicates that almost 70% of companies have trouble effectively managing contracts, but only 5% have automated their procedures. This disparity leads to ineffective manual approvals, dependence on several middlemen, and increased non-compliance or legal risks. As a result, CEOs around the world are realising how crucial it is to use AI to streamline contract processes in order to cut processing and review times by as much as 50%.

AI Redefining the Function of Legal Teams

AI has the potential to enhance legal professionals' skills, not replace them, despite concerns to the contrary. AI gives frees times for Legal professionals to concentrate on more strategic and high-stakes negotiation while AI itself can manage the monotonous and mechanical parts of contract management. As businesses grow and volume of work increases, so does contract volumes, in such a scenario AI is very helpful as it doesn’t get tired and is capable of performing tasks round the clock.

AI assistants can significantly cut down on review time without sacrificing quality in high-volume settings where the average review time per contract can reach 92 minutes. Top Indian companies have started integrating generative AI into their contract management systems to accelerate the contract processes, and ensure that it is complaint with latest laws. This hybrid model of humans working with AI for increased productivity, is quickly becoming the new norm.

Converting Knowledge into Strategic Business Intelligence

AI can convert insights into business intelligence, this is a game changer for businesses looking to put the data into productive use. Now, organisations can keep track of contract renewal dates, which clauses cause disputes, who approved each version, and why some contracts are constantly delayed. Such a technology can also help in general business plans like pricing negotiations, vendor selection, and customer engagement models.

The Function of AI in Contract Management

From contract drafting to performance monitoring, artificial intelligence plays a part at every stage of the contract lifecycle. Automated error detection and notification guarantee that the produced drafts comply with business guidelines and industry standards.

AI tools act as intelligent assistants when examining contracts, they point out any legal red flags, inconsistencies, or risk factors. It can also identify problems like indemnity clauses, inconsistencies in the governing laws, or odd payment terms.

Contract Summaries

AI is also very helpful in contract summaries. Non-legal stakeholders, like finance, HR or operations executives, can now read complicated contracts with ease as AI systems are able to provide customised summaries according to the technical expertise and requirements of the stakeholder.

AI generates contract summaries using a blend of NLP, clause classification, and custom rule engines. The system combines extractive and abstractive summarisation to deliver clear, role-based insights, while flagging deviations from approved standards. Summaries are configurable by business needs, ensuring both legal and non-legal users get tailored, actionable information. Technically, this pipeline integrates OCR, clause segmentation, context-aware NLP models, and custom rule engines, all tuned to the appropriate regulatory requirements and compliance workflows.

Improving Risk Management and Compliance

Staying compliant and keeping track of clauses and legal updates in an increasingly dynamic regulatory environment is one of the biggest challenges in contract management. AI-powered CLM systems continuously check contracts against changing legal frameworks, and send notifications when terms need to be updated or renegotiated. The end product is a real-time compliance matrix that assists businesses in reducing their legal risk before it becomes more

AI tools reviewing contracts in the Indian regulatory landscape most commonly flag clauses related to termination, indemnity, jurisdiction, dispute resolution, and data protection.

Predictive Analysis

Strong predictive analytics is another benefit of advanced AI. AI models can point out contracts which are at risk of breach, identify common negotiation bottlenecks, or predict the need for renewal by examining past contract data. Decision-makers can now take proactive measures rather than reactive action.

Predictive analytics in contract management relies on a mix of supervised learning models, time-series forecasting, and NLP.

Productive Use of Contract Data by AI

Big businesses frequently handle thousands of contracts. AI makes these documents from mere static files to sources of intelligence. AI searches and compares contracts by leveraging natural language processing (NLP), clause classification, and semantic similarity models. The ability to extract structured insights from unstructured legal text helps legal teams monitor key performance indicators (KPIs) such as contract turnaround time, clause negotiation success rates, renewal cycles, and penalty triggers.

Indian enterprises typically handle large volumes of unstructured contract data annually. Large and mid-sized companies often process thousands to tens of thousands of contracts each year across various departments such as legal, HR, procurement, sales and compliance. In cities like Mumbai and Bengaluru, there is a rapid expansion of data centres and digital infrastructure which is also driving contract volumes related to IT services, cloud, and outsourcing. Large Indian enterprises manage around 5,000 to 20,000 contracts annually across various different departments, this shows the complexity and scale of their business operations and regulatory environment.

Conclusion

AI in legal operations in India is set to evolve rapidly from task automation to helping in strategy. Over the next few years, contract tools will also progress from doing simple contract drafting and clause tagging to making more advanced predictive analysis, offering insights on risk and litigation likelihood. With laws like the DPDP Act and increasing regulatory scrutiny from bodies like RBI and IRDAI, AI models will also become more compliance-aware and provide real-time updates.

Legal tech platforms will also consolidate into unified systems integrating contracts, litigation, compliance, and IP, offering intelligent dashboards for decision-making. Natural language interfaces and AI-powered legal assistants will democratise access, allowing business users to interact with legal systems via chat or voice.