Picture the scene. An employee is leaving — HR needs a settlement agreement drafted quickly. The commercial pressure is real: get this resolved cleanly, protect the business, and move on. The options, until recently, were limited. Instruct your employment solicitors and wait, while the clock runs and the bill builds. Dig out a template from three years ago and hope it’s still fit for purpose. Or take a chance on a general AI tool and cross your fingers.
None of those options were particularly good. In 2026, there’s a better one — but it’s worth being clear about exactly what has changed, and what remains exactly as it always was.
What AI Has Changed: Speed and Cost on Routine Drafting
The most significant shift is in the economics of getting a properly drafted settlement agreement. The document itself — the initial draft that captures the key terms, the payment structure, the tax treatment, the confidentiality provisions, the list of claims being settled — used to require a junior lawyer’s time to produce. That time was billed to you. It added up.
AI-assisted drafting has largely replaced that part of the process. A well-structured AI tool, given clear instructions and working within a framework designed by experienced employment solicitors, can produce a high-quality first draft in a few minutes rather than an hour or more. The mechanical, time-consuming element of the work is gone. What remains is the part that actually requires legal expertise: reviewing the draft, incorporating specific instructions, checking the document against current law and needs, and finalising it for use.
That review and sign-off still happens — and it still needs to happen. But because the starting point is now a solid draft rather than a blank page or template with various sections in square brackets, the overall time involved is significantly reduced. That reduction should show up in the price you pay. With a fixed-fee model, it does.
What Hasn’t Changed: The Legal Framework
For all the efficiency gains AI brings to drafting, the legal requirements around settlement agreements are exactly what they were. An agreement that doesn’t meet the statutory conditions isn’t a valid compromise of Employment Tribunal claims — and no amount of AI-generated fluency changes that.
The core requirements remain: the agreement must be in writing, it must relate to a particular complaint or proceedings, and the employee must have received advice from a relevant independent adviser — a solicitor, barrister, or certified trade union official — about the terms and their effect. That independent advice requirement is non-negotiable. It is also entirely separate from the employer’s side of the process, which is where EmploymentSolicitor.com operates.
The substance of what makes a good settlement agreement hasn’t changed either. Getting the payment structure right — understanding what is genuinely ex-gratia and what isn’t, how the £30,000 tax-free threshold applies in practice, when tax indemnity clauses are needed — still requires proper legal knowledge. So does drafting confidentiality provisions that are enforceable, or post-termination restrictions that will hold up if challenged. These are not things AI gets right by default. They are things a qualified employment solicitor gets right, informed by experience and current case law.
The Practical Upshot for HR Teams
What this means in practice is that HR teams in 2026 have access to a genuinely better option than the ones they had before. Not a risky shortcut, and not an expensive traditional service that hasn’t adapted to the technology available. A middle path: AI-assisted drafting that produces a high-quality document quickly, at a fixed fee agreed in advance, reviewed and finalised by a senior employment solicitor who is accountable for the output.
For a standard settlement agreement, that means you know what you’re paying before work starts. You get a document tailored to your specific situation — not a recycled template — checked by a solicitor who specialises in employment law and does this work regularly. And you get it without the uncertainty of an open-ended hourly rate.
For more complex departures, or where the underlying dispute raises issues that need separate advice, the same model scales: fixed fee quotes for each stage, a named solicitor on the file, no surprises.
The Question for 2026
The question for employers this year isn’t whether to use AI-assisted legal services. The technology is mature enough, and the cost savings real enough, that the question has moved on. The question now is whether the AI-assisted service you’re using has a qualified employment solicitor genuinely in the loop — or whether it’s AI with a veneer of legal credibility applied afterwards.
For settlement agreements especially, that distinction matters. Get it right and you have a clean, enforceable resolution. Get it wrong and you may find the agreement doesn’t protect you in the way you thought it did.
If you need a settlement agreement drafted — or want to understand what a fixed-fee service looks like in practice — book a free discovery call with us today.
