Best practices for identifying risks in third-party paper

Reviewing third-party contracts is one of the most time-consuming tasks for legal teams. Unlike working with your own standard agreements, every third-party contract introduces unfamiliar terms, varying structures, and potential risks that must be carefully assessed. Without a structured approach, key risks can be overlooked, slowing negotiations and increasing exposure to unfavorable terms.

With the right strategy and technology, legal teams can identify risks faster, align internal stakeholders efficiently, and ensure contracts reflect their preferred positions.

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The Challenges of Third-Party Paper Review

Third-party contract review is not just about reading through documents—it involves risk assessment, negotiation strategy, and internal coordination. Some of the biggest challenges legal teams face include:

• Lack of Standardization – Every contract is formatted differently, making it harder to quickly locate and assess key terms.
• Time-Intensive Analysis – Manually reviewing for deviations from preferred positions requires careful, clause-by-clause comparison.
• Internal Alignment Delays – Legal teams must flag risks, align with commercial and finance teams, and gain approvals before responding to counterparties.
• Negotiation Bottlenecks – Without clarity on priority risks, discussions can get stuck on non-critical points, delaying deal closure.

A structured, data-driven approach helps legal teams cut through this complexity and move from contract review to negotiation faster.

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A More Efficient Approach: Structured Risk Identification

To streamline third-party paper review, legal teams should focus on:

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1. Establishing Risk Criteria

Before reviewing a contract, legal teams should define what constitutes a high-, medium-, or low-risk clause based on internal playbooks and contract principles and guidelines . This ensures a consistent approach to identifying deviations from preferred terms.

• High Risk (Red) – Terms that significantly deviate from standard positions and require renegotiation (e.g., unlimited liability clauses).
• Medium Risk (Amber) – Acceptable but suboptimal terms that may need adjustments (e.g., indemnity caps that are too low).
• Low Risk (Green) – Clauses that align with preferred positions or require minimal changes.

By pre-defining risk thresholds, teams can classify issues quickly and focus negotiations on what matters most.

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2. Automating Clause Extraction and Risk Tagging

Manually searching for key provisions across contracts slows down review. AI-powered tools like Robin AI Reports can extract relevant clauses in seconds, allowing legal teams to:

• Compare third-party clauses against internal playbooks
• Classify risks using structured outputs like Red/Amber/Green (RAG) ratings
• Generate summaries explaining why a clause is flagged

This approach eliminates manual triage, enabling teams to focus on analysis and decision-making rather than document searching.

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3. Aligning Internally Faster

Once risks are identified, the next step is securing internal approvals and input from relevant teams. Reports summarizing key risks help commercial, finance, and executive teams make faster decisions.

Instead of long email chains or multiple review rounds, structured risk reports provide:

• A clear snapshot of flagged clauses
• Contextual summaries to explain why provisions are flagged
• A standardized framework for evaluating contract terms

With this visibility, stakeholders can approve positions or suggest counteroffers more efficiently, keeping negotiations moving.

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4. Streamlining Negotiations

By starting from a structured risk analysis, legal teams enter negotiations with:

• Clarity on which clauses require discussion
• Pre-defined alternative positions to propose
• Alignment across internal teams on priorities

This reduces unnecessary back-and-forth, helping legal teams close deals faster while protecting business interests.

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How Robin AI Helps Accelerate Third-Party Paper Review

Robin AI provides a structured, AI-powered approach to third-party contract review, helping legal teams reduce review time, standardize risk assessment, and negotiate more effectively.

Here’s how legal teams can identify risks directly within the Robin AI platform:

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1. Select a Third-Party Paper Review Template

Robin AI Reports includes pre-built templates designed for third-party contract review. Legal teams can:

• Use the Third-Party Paper Review templates for different contract types as a starting point.
• Customize the template to focus on key contract risks that are specific to your business or contract types, such as assignment provisions, indemnity caps, and liability clauses.

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2. Automate Risk Classification with Red/Amber/Green (RAG) Criteria

To quickly assess risk levels, users can:

• Choose the Select answer type and assign Red, Amber, and Green options.
• Define clear criteria for each rating to ensure AI flags clauses that deviate from preferred positions.

This automates risk identification, enabling teams to prioritize high-risk clauses first. Your team could also structure your template reports with a more basic "compliant" or "not compliant" approach to quickly determine and prioritize risks.

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3. Add Context with AI-Generated Summaries

For each flagged risk, users can:

• Add a Summary answer type to provide deeper insights.
• Get a short explanation of the clause’s content and why it has been flagged.

This eliminates the need for manual clause-by-clause analysis, making risk review faster and more efficient.

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4. Access and Review Reports Directly in the Platform

Once a report is generated, legal teams can:

• View the report in-platform—no need to switch between documents.
• Click on flagged clauses to instantly jump to the relevant section of the contract.
• See AI-generated insights alongside the full contract text for quick verification.

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5. Collaborate and Align Faster

Legal teams can share structured risk reports internally, enabling cross-functional teams to:

• Review key risks in minutes, not hours.
• Make faster decisions on priority issues.
• Streamline negotiations by focusing on the most critical deviations.

With Robin AI’s structured risk assessment workflow, teams can avoid bottlenecks, reduce manual review time, and negotiate contracts more effectively.

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Conclusion

Third-party contract review doesn’t have to be slow and inefficient. By defining risk thresholds, automating clause extraction, and structuring internal alignment, legal teams can cut review time dramatically and focus on high-impact negotiations.

Robin AI enables legal teams to:

✔ Identify key risks instantly with AI-powered clause extraction.

✔ Classify risk levels using a structured RAG framework.

✔ Summarize flagged clauses for clear, actionable insights.

✔ Verify results with clickable citations linked to specific contract text.

✔ Collaborate seamlessly with in-platform reporting.

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With Robin AI, legal teams can move faster, reduce risk exposure, and negotiate with confidence—without getting lost in manual contract review.

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