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Automatic Risk Detection

When editing legal documents, certain changes carry more risk than others. Our system automatically identifies and flags high-risk modifications so you can give them appropriate attention.

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What We Flag

Indemnification

Changes to indemnification obligations, scope, caps, or carve-outs

Liability

Modifications to liability limitations, caps, or types of recoverable damages

Termination

Changes to termination rights, notice periods, or termination triggers

Confidentiality

Strengthening or weakening of confidentiality terms

Intellectual Property

Changes to IP ownership, licensing, or assignment provisions

Non-Standard Language

Introduction of unusual or non-market terms

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Risk Levels

Each flagged item is assigned a risk level:

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🔴 High Risk

Changes that could have significant legal or financial impact. These require senior review and explicit approval. Examples:
  • Removing an indemnification cap
  • Expanding liability to include consequential damages
  • Eliminating a party’s termination rights
  • Significantly shortening notice periods

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🟠 Medium Risk

Notable changes that are worth reviewing but may be acceptable depending on context and negotiation strategy. Examples:
  • Modifying the scope of indemnification
  • Adjusting liability cap amounts
  • Adding new termination triggers
  • Expanding confidentiality exceptions

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🟢 Low Risk

Minor changes noted for completeness. Generally acceptable but included in reporting for full transparency. Examples:
  • Clarifying language without changing meaning
  • Standardizing terminology
  • Minor formatting adjustments to key provisions

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Checked Areas

For every legal document, we analyze changes to these critical areas:

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Indemnification

We track whether indemnification provisions have been:
StatusMeaning
UnchangedNo modifications to indemnification terms
ExpandedBroader indemnification obligations
ReducedNarrower indemnification obligations
RemovedIndemnification provisions deleted

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Liability

We monitor liability provisions for:
StatusMeaning
UnchangedNo modifications to liability terms
ExpandedGreater potential liability exposure
LimitedNew or strengthened liability caps
RemovedLiability limitations deleted

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Termination

We watch for changes to termination terms:
StatusMeaning
UnchangedNo modifications to termination terms
ModifiedChanges to termination rights or procedures

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Confidentiality

We assess changes to confidentiality obligations:
StatusMeaning
UnchangedNo modifications to confidentiality terms
StrengthenedMore protective confidentiality provisions
WeakenedLess protective confidentiality provisions

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The Risk Report

When risks are detected, you receive a detailed risk report: 
# Risk Analysis Report

**Overall Risk Score:** 65/100
**High Risk Items:** 2

## Checked Areas

| Area            | Status    |
| --------------- | --------- |
| Indemnification | expanded  |
| Liability       | unchanged |
| Termination     | modified  |
| Confidentiality | unchanged |

## High Risk Flags

### 1. Indemnification Clause

**Risk Type:** liability_expansion
**Section:** Section 8.1

The indemnification scope has been expanded to include
"all claims arising from or related to" rather than
"claims directly caused by."

**Recommendation:** Review with senior counsel. This
expansion significantly increases indemnification exposure.

### 2. Termination Notice Period

**Risk Type:** term_modification
**Section:** Section 12.2

Notice period reduced from 90 days to 30 days.

**Recommendation:** Confirm this shorter notice period
is acceptable given business requirements.

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How Risk Detection Works

1

Change Extraction

We identify all modifications in the document by analyzing tracked changes.
2

Clause Classification

Each change is mapped to the relevant legal provision type (indemnification, liability, termination, etc.).
3

Risk Assessment

Changes are evaluated against legal risk criteria, considering both the type of change and the specific provision affected.
4

Report Generation

Flagged items are compiled into a comprehensive risk report with recommendations.

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When Risk Detection Runs

Risk detection runs automatically for:
  • ✅ All documents classified as legal contracts
  • ✅ Documents processed with “legal” or “enterprise” validation tier
  • ✅ Any document where you explicitly enable risk analysis
For non-legal documents, risk detection is skipped unless you specifically request it. This keeps processing efficient for general documents.

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What This Means for Your Workflow

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Before Risk Detection

Traditional workflow:
  1. Junior associate makes changes
  2. Senior associate reviews every change manually
  3. Hours spent reading through redlines
  4. Risk of missing subtle but important changes

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With Risk Detection

New workflow:
  1. Changes are made with AI assistance
  2. High-risk changes are automatically flagged
  3. Senior review focused on flagged items
  4. Comprehensive coverage, efficient review

See the Full Process

Learn how risk detection fits into our complete document processing workflow.