One of the most common questions we hear during AI Assistant training sessions is: “How does it actually work?”
It’s a fair question. When you ask the AI Assistant to identify non-compete clauses across five employment agreements, and it returns a detailed answer in seconds, it can feel like magic. But understanding what’s happening behind the scenes helps you use the tool more effectively—and trust the results.
Let’s pull back the curtain.
The 4-Step Process Behind Every AI Assistant Query
When you select documents and ask a question, here’s what happens:
Step 1: You Select Documents and Ask a Question
You select one or more documents in NetDocuments (up to 100) and type your question in plain language.
For example:
- Selected: 5 employment agreements
- Question: “Identify which of the five precedents actually contain a non-compete and/or non-solicit clause.”
The AI Assistant now knows exactly which documents to work with and what you’re looking for.
Step 2: The AI Searches Your Documents (Retrieval)
This is where the magic starts. The AI Assistant scans through all selected documents looking for content relevant to your question. It searches for terms and concepts like:
- “non-compete”
- “non-solicit”
- “restrictive covenant”
- “competition”
- “solicit employees”
- Related language and synonyms
It pulls out the relevant passages to use as context. This process is called Retrieval—the AI is retrieving the specific sections of your documents that relate to your question.
Step 3: The AI Generates an Answer (Generation)
Here’s the critical part. GPT-5 reads the retrieved passages and formulates an answer based only on what it found in your documents.
- It summarizes and synthesizes the information
- It does NOT use outside legal knowledge or make assumptions
- It reports what is (and isn’t) in your documents
This approach is called Retrieval Augmented Generation (RAG). The AI’s response is “augmented” by—and grounded in—your actual document content.
Step 4: Citations Link Back to the Source
The response includes blue citation links that point to the exact locations in the documents where the AI found the information. Click them to verify the AI’s answer against the original source.
This is your “trust but verify” mechanism. You can always trace an answer back to the specific passage that generated it.
Why This Is Different from ChatGPT or Copilot
Here’s where lawyers often get confused. They’ve used ChatGPT and wonder: Is this the same thing?
No—and the difference matters for client confidentiality.
| Chat GPT |Other AI Tools | NetDocuments AI Assistant |
| Answers from training data (internet knowledge) | Answers from YOUR selected documents |
| May hallucinate or make things up | Grounded in actual document content |
| Confidentiality risk if you paste client docs | Secure within NetDocuments—no data leaves |
| No citations to verify | Citations link directly to source passages |
| Cumbersome to get documents into it | One Click Process to use |
When you ask ChatGPT a legal question, it generates an answer based on patterns it learned from internet text. It might sound confident, but it could be completely wrong—or worse, fabricated.
The NetDocuments AI Assistant takes a fundamentally different approach. It reads your actual documents and reports back what it found. It’s not “thinking” or applying general legal knowledge. It’s doing sophisticated search and summarization.
Why It Rarely Hallucinates
“Hallucination” is the AI term for when a model confidently states something that isn’t true. It’s a significant concern in legal work where accuracy is everything.
The AI Assistant minimizes hallucination because it’s grounded in your documents. It can only tell you what’s actually there. If a document doesn’t contain a non-compete clause, it will tell you that—rather than making one up.
That said, no AI is perfect. You should always:
- ✅ Review the citations to verify accuracy
- ✅ Use specific prompts to guide the AI to the right content
- ✅ Treat the output as a first draft, not final work product
Think of It This Way
The Old Method:
- Open all 5 agreements
- Ctrl+F for “non-compete”
- Manually read each section and track which docs have it
- Repeat for “non-solicit”
- Write up your findings
- Time spent: 30-60 minutes
The AI Assistant Method:
- Select 5 documents
- Ask your question
- Get a synthesized answer with citations in seconds
- Click citations to verify
- Time spent: 2-3 minutes
The AI Assistant isn’t replacing your legal judgment. It’s eliminating the tedious first pass so you can focus on analysis and strategy.
About Optiable
Optiable is a specialized NetDocuments consulting firm that has completed over 500 NetDocuments implementations across the United States and Canada. We help law firms maximize their NetDocuments investment through expert implementation, migration, training, and optimization services.
800.399.0852 www.optiable.com
Want more NetDocuments tips? Check out our NetDocuments AI Assistant FAQ for answers to common questions.