Navigating the Challenges of AI in Legal Document Analysis 

As artificial intelligence (AI) continues to integrate into legal processes, the idea of utilizing large language models (LLMs) for interpreting contracts is gaining traction.

These technologies offer significant potential to streamline and improve the precision of contractual analysis. However, before AI can fully take on this role, several fundamental challenges related to natural language understanding (NLU) and deterministic outputs need to be resolved. Let’s take a closer look into these challenges.

Understanding Natural Language Complexity

The main challenge for using AI in legal documents is the difficulty of natural language understanding (NLU). Legal language is dense, filled with technical jargon, and varies significantly across documents. Effective AI solutions must decode these complexities and grasp the contextual meanings of legal terms and expressions with accuracy similar to human legal experts. Developing sophisticated NLU capabilities is crucial for comprehensive contract analysis.

Ensuring Determinism in AI Outputs

For AI to be trusted in legal interpretations, it must demonstrate a high level of determinism, similar to how a tax calculation engine consistently returns the same result with the same inputs. Legal interpretations demand absolute consistency and predictability—qualities that are essential for determinism in AI outputs. Current AI models can show variability, which is unacceptable in legal settings. Efforts to refine AI architectures and training methodologies are critical to achieving the reliability necessary for legal applications.


While AI still faces challenges in fully automating contract interpretation, it is already effectively automating the review and extraction of key contract terms. This current capability is reliable and impactful, leading to automation in jobs traditionally done by paralegals. Resolving the issues of determinism and NLU is vital before AI can revolutionize the more complex areas of legal work. Until then, AI’s role in the legal field will continue to evolve, redefining the landscape and the division of tasks within law practices.

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