Companies are aggressively investing in Generative AI capabilities, yet many are struggling to see tangible returns. This gap has become especially pronounced when using GenAI for contracting. The reason? A fundamental misunderstanding of AI’s true potential. While technology is often viewed as the driver of change, in this context, it’s the enabler of a far more strategic shift.
A recent 2025 EY Law General Counsel study highlights this disconnect: 96% of legal teams consider ROI a key factor in their technology approach, but only a third have effectively implemented GenAI for contract-related tasks.
The primary culprit? A myopic focus on cost savings. This focus is understandable, as it is one of the promises of GenAI, but it also results in a far too constrained view.
This article aims to help business leaders who rely on contracts as part of their regular workflows rethink “Return on AI” (ROAI) in contracting. ROAI is not just about cutting costs; it’s about unlocking cross-functional support and driving lasting transformation that elevates the contract lifecycle from a cost center to a strategic asset.
Understanding the Current AI Adoption Gap
When it comes to AI, leaders are slowly entering their accountability phase. Recent studies indicate that GenAI is moving past the peak of its “hype cycle” and entering the “trough of disillusionment“—a phase where initial inflated expectations are giving way to the demand for tangible results. This, in turn, is leading organizations to zero in on identifying use cases that deliver real, measurable ROI.
For instance, a significant gap exists within legal departments between enthusiasm for GenAI and its actual implementation. While 56% of legal departments report they are already ideating and experimenting with GenAI, the translation into widespread deployment is lagging.
This implementation lag is more common in high-volume, manually intensive legal work such as contract drafting, redlining, legal due diligence, and risk analysis – areas where freeing up staff for more strategic work offers significant promise.
Leaders facing this adoption gap while under pressure to achieve a narrow view of ROI frequently encounter a consistent challenge: When cost savings are not immediately realized, AI projects frequently stall or remain in the pilot phase, because stakeholders deem them ‘unsuccessful’.
Why “Return On AI” Must Go Beyond Cost Savings
EY finds that 96% of legal departments—and likely similar percentages of other departments— consider ROI in technology investment decisions. The challenge is in how ROI is defined: often solely through the lens of cost savings. This narrow view misses out on the broader strategic benefits that AI can deliver.
Measuring “Return on AI (ROAI)” requires a more nuanced approach. While AI undoubtedly boosts efficiency by automating tasks and cutting costs, its true value lies in its ability to enhance decision-making, mitigate risks, accelerate revenue, and prevent value leakage throughout the entire contract lifecycle.
How can organizations realize this potential? By taking incremental steps, starting with establishing clear metrics and goals that offer a fuller picture of ROI and guide the digitization strategy moving forward. ROAI should include key metrics most relevant to the business—for instance, contract cycle times, compliance improvements, error rate reductions, and more.
Indeed, cost savings may be the narrowest value AI adds when it comes to contracting. This is why those involved in the contracting lifecycle must reassess the metrics they’re using to measure ROAI. Let’s examine some of the most important metrics to consider.
Core Dimensions of a Broader ROAI Framework
1. Risk Mitigation & Compliance
Regulatory compliance is, of course, a paramount concern in contracting. Strategically leveraging AI offers a powerful pathway to proactive risk management.
AI can instantly flag non-compliant clauses and potential compliance gaps within contracts. It stays current with evolving laws and regulations—whether GDPR, CCPA, or industry-specific requirements—so your teams don’t have to manually track every update. Instead, contracting professionals can focus on higher-value, strategic work.
Crucially, AI doesn’t just enforce external compliance; it also reinforces internal consistency. By applying your organization’s contracting playbooks directly into contract review workflows, AI helps ensure that agreements align with your preferred positions on key terms like indemnification, liability, and data privacy.
The result is fewer costly surprises, reduced risk exposure, and more confidence that every contract upholds both legal requirements and business standards.
2. Time & Resource Efficiency
Lengthy contract cycles don’t just slow internal workflows—they risk lost deals, delayed revenue, and diminished client experience. When contracting becomes a bottleneck, the business feels it everywhere.
Yet the functions involved in contracting—legal, sales, procurement, finance—are already managing competing strategic priorities. Reviewing terms, redlining drafts, chasing approvals, and contract drafting: these are essential tasks, but they aren’t where these teams create their greatest value.
The real return on AI here is not just faster contract turnaround. It’s about freeing skilled people from manual, transactional work so they can focus on higher-impact initiatives—like negotiating better terms or strengthening vendor relationships. In doing so, contracting evolves from a procedural hurdle into a lever for business agility and growth.
3. Data-Driven Decision Making
A significant hurdle across departments lies in managing disorganized contract data scattered across siloed platforms. (For instance, the EY found that 87% of legal teams report facing substantial data challenges) This lack of accessible and organized information is a barrier to strategic decision-making. AI offers a solution by unlocking the wealth of information contained within contracts.
Beyond individual contracts, AI enables broader strategic insights. It can convert contract data into valuable analytics, which can be used in:
- Detailed analysis of vendor terms to optimize procurement strategies
- Comprehensive risk profiling in M&A deals
- More accurate budget forecasting based on contractual commitments
- Vast repositories of past contracts to identify optimal terms and benchmark against industry standards
By unlocking insights from across the contract portfolio, AI equips legal and contracting teams to deliver forward-looking guidance that directly informs business strategy, from procurement decisions to M&A planning to revenue forecasting.
4. Cultivating Culture & Retaining Talent
As 64% of departments plan to upskill their teams for AI, AI isn’t just transforming how work gets done—it’s transforming career development. AI frees employees from mundane routine tasks, boosting job satisfaction and improving talent retention.
However, there is still the fear that AI will displace human jobs. In the legal and contracting domain, it’s important to remember that the inherent nuance and judgment of human expertise are irreplaceable by AI algorithms. Instead of looking at AI as a replacement, it should be viewed as a powerful catalyst that presents opportunities for professionals to grow their careers in new, more cutting-edge ways.
For contracting professionals, AI opens up opportunities to expand their skill sets. Instead of getting bogged down with repetitive manual tasks, people can shift their focus to strategic work that makes them both more valuable and engaged in their roles.
AI in Contracting Unlocks Returns Across Functions, Not Just Legal
Contracting is often viewed as a legal function—but in reality, contracts shape outcomes across nearly every part of the business. Sales, procurement, finance, operations: all depend on contracts to close deals, manage suppliers, forecast cash flow, and mitigate risks.
AI amplifies this impact by streamlining the contracting touchpoints embedded in these workflows. In sales, for instance, AI can analyze historical contract data to identify which leads are most likely to convert, then automatically initiate contract generation with standard terms—accelerating time to signature and revenue realization. In procurement, AI can surface deviations from preferred supplier terms or highlight renewal opportunities, strengthening negotiation outcomes. For finance teams, AI’s ability to extract and analyze payment terms, obligations, and milestone dates directly from contracts improves cash flow visibility and budget planning.
The return on AI in contracting, then, isn’t confined to one department. It’s a force multiplier across the business—removing friction from critical processes and helping teams move faster, smarter, and with greater alignment.
Measuring Broader ROAI with Concrete Metrics
AI’s ROI is multi-dimensional, especially when it comes to contracts and legal departments—pushing past simple efficiency improvements and fundamentally reshaping how organizations manage risks and drive revenue.
Think of it this way: Accelerate the signature process, and you accelerate revenue recognition. Prevent value leakage—whether through missed supplier rebates, unfavorable terms, or overlooked obligations—and you directly protect the bottom line. Catch risky clauses early, and you reduce the likelihood of disputes or penalties.
Measuring this broader impact requires looking beyond simple cost savings. Key metrics to consider include:
- Time to Signature – AI can accelerate negotiations and approvals, reducing the time it takes to get contracts signed.
- Contract Value Leakage – Use AI to measure the degree to which contracts capture—or lose—intended value, including discounts and performance obligations.
- Risk Scoring Reductions – AI’s ability to flag potential risks earlier in the process can lead to fewer downstream risks.
- Stakeholder Satisfaction – How the contracting process supports—not stalls—other functions, improving internal alignment and client experience.
These outcomes are interconnected. A smoother, faster contracting process doesn’t just close deals quicker; it strengthens supplier relationships, enhances client satisfaction, and gives teams across the business the confidence to act on reliable, compliant agreements.
This is the real return on AI in contracting: a shift from transactional efficiency to strategic enablement.
A Strategic Imperative Starts with Shifting Your ROAI Focus
Organizations and leaders are under enormous pressure to effectively adopt GenAI in their organizations. Contracting presents one of the most obvious opportunities in this regard. It’s no wonder LegalTechHub is already tracking a whole ecosystem of technologies—dozens, according to their recent map—all aimed at supercharging contracts.
But here’s the crucial part, especially with the pressure cooker environment: it’s critical that leaders don’t get stuck in the trap of measuring Return on AI primarily through the lens of cost savings. It’s like looking at a skyscraper and only admiring the doorknob. The real returns, the game-changer that comes from AI, are so much more significant and impactful.
The organizations that truly succeed, thrive, and ultimately lead in this AI-powered era? They are the ones who look beyond the balance sheet and focus on a broader spectrum of value—things like time savings, significantly reduced risk exposure, unprecedented insights that drive strategic decisions, and ultimately, the agility and innovation that allows the business, as a whole, to outpace competition and lead the future of their industries.
In the next part of this series, we will delve into actionable strategies for achieving and measuring this comprehensive ROAI, such as focusing on specific agreement types and building centers of excellence.