In today's fast-paced legal environment, manually comparing contracts from various parties is time-consuming, complex, and fraught with potentially costly human-made errors. However, with recent AI advances, particularly Generative AI advances, we can now use AI-powered contract comparison tools to reduce the time, complexity, and thus error-prone process of comparing contracts. In this article, we will explore how AI can automate the contract comparison process and how the contract comparison feature at Miramis (formerly Pocketlaw) works.

1. How AI Automates Contract Comparison

Identifying discrepancies in key clauses is crucial for many lawyers when working with and reviewing many 100s of contracts per year, depending on the size of your business. Errors or mistakes here can be very costly and sometimes debilitating.

This process can be tedious; a legal person must review and cross-reference every previous contract to ensure consistency. If you are lucky, your company might have a playbook or a set of guidelines. If you need help, you may look at external sources or other material for your jurisdiction. Advanced Excel formulas or VBA(1) macros will not cut it here.

This is where AI-driven contract comparison tools can help. Nowadays, it is as easy as uploading a contract or several contracts to e.g. chatGPT or Claude and asking questions about similarities and differences. Or is it that easy, especially for specialized domains such as Legal or Finance?

While AI models are getting better at reasoning, they still have some limitations. We're not quite at the point where we have fully reliable, all-encompassing AI assistants. However, one area where these AI models really excel is in understanding the meaning of text and predicting what comes next, which makes them particularly useful for analyzing and comparing legal documents.

You might be tempted to do a prompt like the one below:
Compare the 2 contracts and summarize key differences and similarities between these

Figure 1. Example prompt using ChatGPT Mac app, without more efforts in prompt engineering the comparison is quite generic.

We have noticed that a prompt like the above might get you 70-80% of the way. But often falls short on specific domains and legal know-how. To maximise the potential of AI - using the correct prompt is A to Z and not an easy exercise. Companies are now hiring full-time prompt engineers to handle these analyses. So wouldn’t it be nice if there was a solution that took care of this for you instead of you having to spend hours on prompt engineering? As well as being an integrated part of other relevant legal tasks and workflows. In the next section, we will delve into how we at Miramis solve this problem at scale.

2. How Miramis (formerly Pocketlaw) Enhances Contract Comparison for Legal Teams

As part of our AI Legal document assistant offering, PLAI, we have a compare feature where you can instantly compare one or several documents from your document repository. Let's walk through an example step-by-step to show the flow:

1. Upload the contract to your Miramis Repository (bonus: enable AI auto-tagging and get 25+ relevant legal tags to index and make your documents searchable).

2. Miramis extracts text almost instantly with our text extraction pipeline to make it available for the LLM.

3. Click the PLAI button.

4. Select Compare document and choose the document you want to compare it against.

5. Done - grab a coffee.

It is as easy as above. Watch it by yourself:

Note that we have put quite some effort into prompt engineering with the help of our legal domain experts and AI Engineers to make the comparisons as accurate and relevant as possible, which saves you time so you can focus on more important matters.

In our recently launched PLAI Microsoft Word integration you can do a comparison of several documents at the same time and insert this function directly into your current workflow. See below:

When using the Compare functionality in PLAI for the same documents you get a more detailed and tailored comparison and summary of key points right at your fingertips:

Figure 2. Example of using PLAI compare feature for the same documents. The comparison is now more on point and relevant.

3. The Benefits of AI-Powered Contract Comparison

AI powered contract comparison tools such as Miramis AI (formerly Pocketlaw PLAI) can provide a range of benefits, by streamlining the tedious and laborious process of comparing contracts.

Below we show some key advantages:

Time efficiency: Using AI and platforms like Miramis which utilises Generative AI and LLMs reduces time to compare on or several contracts into a few seconds from multiple hours.

Accuracy and consistency: AI and particularly platforms like Miramis reduces the potential errors which human oversight can lead to, ensuring consistency across contract comparisons. Tailored for the legal domain and other professional services.

Error reduction: Identifying discrepancies, and other potential issues are crucial when comparing contracts. AI and platforms like Miramis does this in a streamlined, accurate and automatic manor reducing the risk of errors.

Scalability: As business grows, the number of contracts they need to manage tend to grow exponentially. AI and platforms like Miramis are built to handle hundreds or thousands of documents.

Customized for professional services such as legal and finance domains: Generalized AI tools can fall short in handling domain-specific nuances, our team of domain experts makes sure that our AI features are always grounded and tailored for the legal and adjacent domains.

4. Learn more about AI for contract comparison

In this article we have discussed how AI can be used for the time consuming process of comparing one or several legal contracts. We have also discussed how our Compare feature can help you in these regards. Which is accessible via our PLAI assistant.

If you are interested in seeing how AI can help and revolutionize your contract comparison process, Miramis' AI assistant is designed and tailored to meet the unique needs of legal and other adjacent professional service domains.

Want to see it in action? Get in touch with our team today or schedule an appointment.