Aipedia: Solicitors and law firms

AI contract review and drafting for solicitors

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

Solicitors can use AI to review and draft contracts, but they stay responsible for every clause the tool misses or gets wrong. A missed onerous term is a classic negligence claim, so AI review needs the same professional scrutiny as a junior's mark-up.

Part of: AI in solicitors and law firms

In short

AI tools can compare a counterparty draft against a firm playbook, flag deviations and suggest redlines in minutes. The risks are missed or misread clauses, playbook drift when a template is out of date, and over-reliance on the tool's confidence. Code 3.2 requires competent service and Code 3.5 effective supervision. A client who signs a contract with an unflagged onerous term may bring a negligence claim, which usually falls within the civil liability cover required by the SRA minimum terms. Vendor indemnities rarely help the firm against a client.

How firms use AI on contracts

Commercial teams use AI to triage incoming drafts, compare them with a firm or client playbook, extract key terms such as liability caps, termination rights and change of control, generate first-draft redlines and produce summary reports for clients. Some firms build their own playbooks into enterprise tools; others use general generative AI chatbots to suggest clause wording. The speed is real, but the tool only knows what the playbook and prompt tell it, and it has no view of the commercial bargain behind the document.

The duties that apply

The SRA's warning notice is clear that AI "does not diminish or transfer your professional responsibilities". The relevant standards are Code 3.2 (competent and timely service), Code 3.5 (accountability for and supervision of others' work), Code 3.6 (making sure those you manage are competent), Code 6.3 (confidentiality of the documents uploaded) and Code 7.2 (being able to justify your decisions). The SRA's supervision guidance says AI outputs must be "subject to appropriate human review, scrutiny and professional judgement".

The Law Society recommends agreeing with clients whether and how AI is used on their matter, and checking vendor warranties and indemnities during procurement.

What can go wrong

Missed clauses. The tool fails to flag an uncapped indemnity buried in a schedule or a definition that widens it.
Playbook drift. The playbook reflects last year's position or another client's risk appetite, so the AI applies the wrong standard consistently across many contracts.
Context blindness. AI reviews the text but not the deal: it cannot know what the client told you on a call.
Invented wording. Drafting suggestions may cite statutory provisions or market practice that does not exist.

Illustrative: a firm uses AI to review a supply agreement for a manufacturing client. The tool flags the headline liability cap but not a carve-out in a schedule that leaves the client's liability for certain defects unlimited. The associate relies on the AI summary. A defect claim follows and the client alleges the firm should have advised on the carve-out.

How PI usually responds

A missed onerous term is a standard negligence allegation and the method of review does not usually change that. The SRA minimum terms require cover for civil liability arising from private legal practice, with a closed list of permitted exclusions that does not mention AI. Defence costs are in addition to the limit and the excess does not reduce the limit. Where the same playbook error affects several contracts, how claims are grouped under the aggregation clause matters: see aggregation under the SRA minimum terms.

Vendor indemnities are usually narrow and capped, and a client will sue the firm, not the software provider. Top-up layers above the minimum terms are not bound by the MTC, so check their wording.

Practical controls

Keep playbooks owned, dated and reviewed by a named partner.
Require a qualified reviewer to read schedules and definitions, not just the AI summary.
Tell the client in the engagement letter how AI is used and what is reviewed manually.
Use enterprise tools that keep client documents confidential and out of training.
Log AI-assisted reviews and any errors found.

How Apex helps

Apex arranges PI for solicitors and law firms. A broker can review how your primary and top-up cover treats AI-assisted commercial work and how your controls are presented to insurers. See the AI in law firms hub, AI due diligence and AI-drafted advice letters, plus AI contract clauses and indemnities.

Sources

Frequently asked

Can I rely on an AI contract review tool?

Not on its own. The SRA expects human review, scrutiny and professional judgement over AI outputs. Use the tool to speed up triage, but have a qualified lawyer read the contract, including schedules and definitions, before advising the client.

Will my PI cover a claim for a clause the AI missed?

Usually, yes. A missed onerous term is a negligence claim, and the SRA minimum terms contain no AI exclusion. Cover is subject to the policy terms, and any top-up layer may have its own wording, so check both layers.

Should I tell clients I use AI on their contracts?

The SRA Risk Outlook and the Law Society both suggest telling or agreeing with clients how AI will be used on their matter. Setting this out in the engagement letter also helps define scope if a dispute arises later.

Can I upload a counterparty's draft to an AI tool?

Only into a tool with proper safeguards. The SRA notice says client information should go into AI only with contractual, technical and organisational protections, kept secure and not used for training unless authorised. The draft may also contain the counterparty's confidential information, so check any NDA too.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.