How to review Data Processing Agreements with AI

Data Processing Agreements are high-volume and high importance. They show up in nearly every commercial deal involving personal data, where they assign responsibility for security, compliance, and liability, especially under laws like GDPR, CCPA, and the UK DPA.

The problem is scale. Legal teams often review dozens of near-identical DPAs every month. They negotiate the same issues over and over. And while the clauses might be familiar, the risks change. A poorly drafted DPA can leave a company exposed to regulatory fines, contractual liability, or unresolved disputes in the event of a data breach. 

What a good DPA review checks for

Most DPAs follow a standard structure. They define what data is being processed, why, and under what terms. But even when the structure looks familiar, the substance can vary, and that’s where mistakes can happen.

A good legal review needs to check if the expected clauses are present, and if the terms actually match your organisation’s risk tolerance, legal obligations, and data protection policies.

Here’s what that involves.

Liability caps and exclusions: Who pays if there’s a data breach? The agreement should clearly state each party’s financial responsibility. Caps should be reasonable, and exclusions (for example, gross negligence or regulatory fines) should be flagged and assessed.

Data return or deletion: Once the contract ends, what happens to the data? The DPA should say when and how personal data will be returned or securely deleted. Vague or missing language can leave you exposed to risk after termination.

Sub-processor obligations: If the other party uses third-party vendors (sub-processors) to help process data, the DPA should include controls. It should cover your right to object, require equivalent security standards, and set rules for approval or notification.

International data transfers: If personal data is moved outside your local jurisdiction (e.g., outside the UK or EU), the DPA should include appropriate safeguards. That might mean standard contractual clauses (SCCs), data transfer impact assessments, or other mechanisms required under laws like GDPR.

Security standards: Look for specific obligations around encryption, access controls, breach detection, and more. The agreement should match your internal security policy, or go further if your industry demands it.

Missing terms or inconsistencies: Sometimes the issue isn’t what’s in the DPA, but what’s not. A good review checks for omissions, unclear language, or contradictions between sections.

Why DPAs are ideal for legal AI

DPAs are among the best candidates for legal automation. They follow consistent patterns, use repeatable language, and involve a limited set of negotiation points. Most of the risk lies in deviation from your standard terms.

That makes them a natural fit for AI systems designed to handle structured legal tasks.

AI can compare each new agreement to your playbook, flag gaps, and suggest edits. It can check every clause against your policies without losing focus. And it can do all of that in minutes, not hours.

This is not something general-purpose AI can do. Tools like ChatGPT can summarise or generate text, but they aren’t trained on legal conventions, don’t understand your fallback positions, and can’t consistently apply your policies across contracts. They miss nuance, offer no audit trail, and can’t be trusted with sensitive data.

Legal AI platforms are purpose-built. They follow structured logic, inherit your legal style, and explain every suggestion. That’s what makes them suitable for DPAs and safe for legal work.

Read more: How to assess legal AI platforms in 10 minutes

What to have in place before using AI to review DPAs

You don’t need to overhaul your legal ops to start reviewing DPAs with AI. But a few things make the process easier and more effective.

Your standard positions

It helps to have a clear list of how your team usually approaches key issues. That might be in the form of internal guidelines, a preferred positions document, or just a short note on what really matters to you in a DPA. Legal AI tools like LEGALFLY can use this to tailor reviews to your policies and flag anything that doesn’t align.

Your own DPA template

If you have a standard DPA that you typically use with vendors, you can upload it into the system. The AI can then compare incoming DPAs against your own wording to highlight what’s different or missing. This also helps when building a custom playbook.

You might need: A large data repository

Some AI systems rely on historical contract data to work well. LEGALFLY doesn’t. You don’t need to feed it a library of old agreements. It works based on your inputs: your template, your guidelines, and the document in front of it.

What goes into a good DPA playbook

Legal AI reviews are only as strong as the playbook they follow. A DPA playbook tells the AI what to check for and what matters to your team. These are the clauses and terms commonly included:

Core checks

These are the must-haves. Most teams include these in every DPA playbook.

• Scope and purpose of data processing
• Audit rights and any limits on them
• Liability caps and what’s excluded from them
• Data breach notification timing and format
• Termination clauses and what happens to the data

Secondary checks

These are also important, especially for compliance and risk management.

• Duration of data processing
• Types of personal data involved
• Categories of data subjects
• Rights and responsibilities of the controller
• Processor obligations, including confidentiality and security
• Sub-processor approval and notification rules
• How international data transfers are handled
• Handling of special category or sensitive data

A good playbook is clear but flexible. It should reflect your current legal and compliance policies, but also allow for the reality that not every DPA will look the same.  

How LEGALFLY handles DPA reviews

LEGALFLY is built to take the manual effort out of tasks like DPA reviews while keeping lawyers in control. It uses a system of specialised “agents”. These are dedicated AI tools trained for specific legal tasks. For DPAs, the two most useful agents are Review and Compare.

Read more: Everything you need to know about agentic AI for legal work

Review Agent

The Review Agent is designed to analyse an individual DPA and flag risks based on your preferences.

Here’s how it works:

1. Upload the contract: Drag and drop the DPA into LEGALFLY, or open it directly from Microsoft Word using the LEGALFLY add-in.

2. Define your role: Let the system know whether you're acting as a data controller or a data processor. This affects how it evaluates each clause.

3. Automatic detection and playbook application: LEGALFLY identifies the type of document and applies your DPA review playbook. This playbook includes your preferred legal positions, risk thresholds, and internal standards.

4. Structured review: The AI reads through the entire agreement and checks each clause against your playbook.

You get:

• Flags on problematic terms, ranked as major or minor based on risk
• Proposed redlines, written in your preferred legal tone
• Clause-by-clause explanations, showing exactly what was flagged, why, and where in the document it appears
• Editable results, so you can approve, modify, or discard any suggestion

The result is a clean, redlined document that reflects your firm’s policies and is ready to send back. LEGALFLY doesn’t rewrite unless necessary. It just makes precise edits.

Compare Agent

If you’re reviewing a third-party DPA and want to see how it stacks up against your standard terms, the Compare Agent can help.

Here’s how it works:

1.Upload both versions: Add your preferred DPA and the version you received from the counterparty. You can set your own DPA as the reference document.

2. Run the comparison: LEGALFLY aligns the documents clause by clause and presents a grid view summary.

You’ll see:

• Which clauses match exactly
• Which are missing or worded differently
• Where terms are more or less favourable than your standard
• Highlights of areas likely to need redlining or pushback

This lets you skip re-reading the whole document. You can focus straight away on deviations, risks, and negotiating points. It’s especially useful for teams who regularly process vendor contracts.

Read more: Confidence, reliability and validity at LEGALFLY