In recent months, we've seen a growing trend: clients are sending us contracts and legal analysis generated by artificial intelligence tools. While this shift reflects the increasing accessibility and sophistication of AI, it also raises serious concerns about accuracy, reliability, and legal risk.

Why Businesses Are Turning to AI for Legal Drafting

AI-powered platforms promise speed, affordability, and convenience. With just a few prompts, users can generate contracts, NDAs, service agreements, and even legal memos. For startups, small businesses, and even busy professionals, this can seem like a game-changer.

But here’s the catch: AI is not a lawyer.

The Hidden Dangers of AI-Drafted Legal Documents

While AI tools can mimic legal language and structure, they often lack:

• Jurisdictional nuance: Laws vary widely by state, country, and industry. AI tools may not tailor documents to the correct legal framework.
• Contextual understanding: AI doesn’t know your business model, risk tolerance, or strategic goals. It can’t ask the right questions or flag subtle issues.
• Legal judgment: AI can’t interpret case law, weigh competing interests, or anticipate how a court might view a clause.

We’ve reviewed AI-generated contracts that:

• Misstate key legal concepts
• Omit critical protections
• Include unenforceable or contradictory terms

AI as a Tool, Not a Substitute

To be clear, we’re not anti-AI. In fact, we use AI internally to streamline research, identify patterns, and enhance productivity. But we treat it as a starting point, not a final product.

Clients should think of AI like a calculator: helpful for quick math, but not a substitute for a financial advisor. Legal documents require human expertise, strategic thinking, and ethical responsibility.

What You Should Do Instead

If you're using AI to draft contracts or analyze legal issues, here’s how to stay safe:

1. Always have a lawyer review AI-generated documents.
2. Use AI for brainstorming or first drafts - not final versions.
3. Be transparent with your legal team about what tools you’re using.
4. Understand that legal advice must come from a licensed professional.

Final Thoughts

AI is transforming the legal landscape, and that’s exciting.  But before you rely on a machine to protect your business, make sure a human has your back.