Why AI contract generators are a game changer for small businesses

Creating a new contract from scratch can be pretty taxing. You could use a template, like the ones available on Lumin, but even the best templates are still generic and aren’t tailored for your specific needs. For a more customized experience, try an AI contract generator that tailors every detail of your document to your small business.

Here's how it works: you tell the generator what you want to include in your agreement and refine it through chat messages with the AI. The generator then crafts a customized contract that fits your company perfectly.

Sounds awesome, right?

Well, not all AI contract generators are the same, and they won’t replace real human beings for more complex contracts right now. However, working with a tool like Lumin's AgreementGen AI contract generator will undoubtedly streamline the document workflow, freeing up your time for other essential tasks.

The problem with traditional contract creation

Saying that creating a contract can be time-consuming would be an understatement. Even a basic, one-page document might take a few days, while a lengthier, more complex agreement could take several weeks or months.

You could hire a lawyer to do all the hard work for you. But that's certainly not cheap, with the average fee for a contract being $603. That’s a lot of money for many small businesses that need a whole range of contracts, from NDAs, client agreements, service agreements, employee contracts, and so on.

Let’s say you have some old contracts that you could update. That would work out cheaper than creating an agreement from scratch, right? The problem is that PDF documents are static and not made to be editable, so repurposing old contracts would be a frustrating experience for sure. You also have a similar problem with templates — editing them to meet your current requirements probably isn’t so simple.

So, what's the solution?

How AI contract generators work

AI contract generators take a lot of the work out of your workflow, allowing you to create documents specific to your needs just by chatting with an AI assistant. You can add clauses, use the correct legal language, and format your contracts just how you like.

Think of an AI generator as your personal contract creator and editor. The best ones don't just generate professional agreements based on your requirements. They also convert your existing PDF contracts into editable and dynamic documents so you can customize content, save time, and ensure accuracy.

Of course, AI can't replicate real human legal expertise for all situations. But it can certainly streamline and simplify more common contract types.

Benefits for small businesses

Some of the advantages of AI contract generators include:

Time savings

Did you know that business owners report a median weekly saving of 13 hours due to AI tools? Well that applies to contract creation, too.

With an AI contract generator, you can create agreements quickly without manually writing out each clause or bringing in a lawyer each time. Just tell the generator what you want to include in your document, and it'll draft an entire contract in a ChatGPT-like interface based on your prompt. From there, you just need to refine and review.

Cost savings

You can use a generator to make basic agreements, removing the need for an expensive contract attorney. For more complex docs, why not create a first draft for a lawyer to review? This reduces the amount of time you work with them, saving your business cash.

Consistency

Consistency can be a real challenge to maintain across contracts, from clauses to terminology and branding. Some AI contract generators make consistency much easier to achieve by letting you save contracts as templates you can reuse whenever you need.

Perfect that last employee contract? Use it again for all future employees you welcome into the business.

Concerns with AI contract generators

AI contract generators can certainly make things easier for smaller businesses, but they aren’t perfect. These are some of the issues when using one of these tools:

AI accuracy

No AI tool is 100% accurate, and there's always the chance it can get something wrong. This is known as a “hallucination,” and while it’s not common, it can happen. For this reason, it’s always important to properly review any AI document you create.

Legal validity

AI-generated contracts are no more or less legally binding than a manually-crafted option. All contracts must meet the same criteria to be considered legally valid.

However, having a lawyer review your manual or AI-created contract can give you confidence that it’s fully compliant with the laws in your jurisdiction.

Data security and privacy

Entering business information into an AI contract generator might understandably raise concerns about how that information might be used. Will it be stored securely? Is the data encrypted? Will your contracts be used to train the AI?

Check that any contract generator you use looks after your data and that you're comfortable with how that data is being stored and processed. For example, see if it meets SOC 2 compliance standards and that data is encrypted at rest and in transit.

Ready to get started?

AgreementGen is a new AI-powered contract generator designed to simplify contract creation and editing, empowering small businesses to focus on what matters most to them.

The solution is currently in beta, and we’re looking for feedback from users on their experiences and how we can further improve it to create the best possible contract generator.

Try AgreementGen today for free and see how much time you can save.