Do I really need software to compare documents?

For casual documents like draft proposals, manual review is fine. For legal contracts where missing one change could cost $4,000-15,000 (ASBFEO data), automated comparison is essential risk management. Even free tools like Microsoft Word's compare feature provide 95% accuracy—dramatically better than the 80-85% achievable manually. The question isn't whether you need software, but which method matches your document volume and risk tolerance.

Which method is most accurate?

Leading dedicated tools (Draftable, Litera) achieve 99.5%+ accuracy, followed by Adobe Acrobat (98%), Microsoft Word (95%), and manual review (80-85%). For context, missing even 1-2% of changes means potentially overlooking critical modifications in a 20-page contract. The accuracy difference between Word Compare (95%) and Draftable (99.5%) represents 9 additional changes caught per 200 changes—often including the single critical change that could trigger a dispute.

Can I compare scanned PDFs?

Yes, but the PDFs must contain searchable text, not just images. If your PDF is a scanned image, you'll need OCR (Optical Character Recognition) first. Adobe Acrobat Pro includes OCR (Tools → Recognize Text), and Draftable handles it automatically when you upload scanned documents. Word's compare feature doesn't work with PDFs at all—you'd need to convert to Word format first, which introduces conversion errors.

How long does it take to learn each method?

Microsoft Word Compare takes 8-12 minutes to learn on first use (finding the feature and understanding the interface), then 2-3 minutes per comparison. Adobe Acrobat Compare takes about 10 minutes first use. Draftable takes just 3 minutes—upload two files and click compare. All automated methods are simpler than learning manual review, which requires 6-12 months of practice to achieve even 90% accuracy. The learning curve for comparison tools is trivial compared to the time investment of becoming proficient at manual review.

Is it safe to upload confidential contracts to online comparison tools?

Industry-leading tools (Draftable, Litera) use bank-level encryption (AES-256) and automatically delete documents after comparison, providing more security than most small business current practices. Email—how most businesses share contracts—is less secure because messages can be intercepted and aren't automatically deleted. Desktop tools (Word, Adobe) keep documents entirely local if you prefer zero cloud upload. Check each tool's security certifications (SOC 2, ISO 27001) and read their data retention policy before uploading highly confidential documents.

What if Word Compare says "no differences" but I know there are changes?

This almost always means you accidentally compared the same document twice. Verify you selected different file versions—check the full file path, not just the filename. Other causes: comparing documents before and after accepting all tracked changes (the comparison was already incorporated), or one document is protected and preventing comparison. Go to Review tab → Restrict Editing → Stop Protection to remove document protection, then try the comparison again.

How to Compare Legal Documents (Manual vs. Automated Methods)

To compare legal documents accurately, use Microsoft Word's Compare feature (Review tab → Compare) for Word documents, Adobe Acrobat's Compare Files tool for PDFs if you have a subscription, or dedicated software like Draftable ($15/month) for both formats—manual visual comparison achieves only 80-85% accuracy while automated tools detect 95-99.5% of changes in 2-3 minutes.

This guide walks through every method of comparing legal documents, from free built-in tools to professional software, with step-by-step instructions and guidance on which approach matches your needs and risk tolerance.

Why Comparing Legal Documents Is Essential

The Australian Small Business and Family Enterprise Ombudsman documented a Melbourne business that missed a single clause change in a contract renewal, resulting in a $4,000 penalty and six months of dispute resolution. The change would have been caught instantly with any document comparison method.

Human reviewers miss approximately 5% of changes when carefully reading contracts line-by-line—that's 1 change in every 20 documents reviewed. For longer documents over 20 pages, the miss rate increases to 15% due to attention fatigue. Comparison tools eliminate this systematic error risk.

Contract disputes from missed changes cost small businesses $4,000-$15,000 on average. Document comparison—whether using free Word Compare or $15/month Draftable—costs nothing in comparison to this risk.

How to Compare Contracts Manually (And Why It's Risky)

Manual visual comparison involves opening both document versions side-by-side (either on separate monitors or printed) and scrolling through simultaneously to spot differences. This method achieves only 80-85% accuracy and takes 45-60 minutes per 10-page contract.

Why manual comparison fails:

• Attention tunneling: Your brain focuses on content, not changes
• Change blindness: Single-word modifications blend into surrounding text
• Fatigue: Accuracy drops 15-25% after reviewing 3+ documents
• Deleted content: Brain fills in expected text, masking omissions
• Moved sections: Relocations appear as both addition and deletion, typically only one is caught

The only acceptable manual comparison: Quick spot-check of a 1-2 page addendum where you expect obvious, major changes (like updated pricing). For actual contracts, always use automated comparison.

Comparing in Microsoft Word (Step-by-Step)

Prerequisites: Both documents in Word format (.docx or .doc) and Microsoft Word installed (included with Microsoft 365, $6.99-$12.50/month).

Step-by-Step Instructions:

1. Open Microsoft Word (don't open either document first)
2. Click the "Review" tab in the top ribbon
3. Click "Compare" button in the Compare group
4. Select "Compare..." from the dropdown menu (not "Combine")
5. In the Compare Documents dialog:
• Click the folder icon next to "Original document"
• Browse and select the older version
• Click the folder icon next to "Revised document"
• Browse and select the newer version
6. (Optional) Click "More >>" to adjust comparison settings
7. Click "OK"

Reading the Results: Word displays a three-pane view showing the original document (left sidebar), compared document with tracked changes (center), and revised document (right sidebar). Red strikethrough indicates deleted text, red underline shows added text, and moved content appears as deletion plus insertion.

Save the comparison report: File → Save As → Choose location. Keep this as evidence of what changed between versions.

Time Required: 8-12 minutes first use (finding the feature), then 2-3 minutes per comparison thereafter.

Common Issues:

• "No differences found": You accidentally selected the same document twice. Verify you chose different file versions.
• Thousands of formatting changes: The documents use different templates. Click "More >>" in the compare dialog and uncheck "Formatting."
• Can't find Compare button: You're using Word Online (browser version). Must use desktop Word application.
• Compare feature unavailable: Document is protected. Remove protection first: Review tab → Restrict Editing → Stop Protection.

Critical Limitation: Only works with Word documents, not PDFs. Since 72% of business contracts arrive as PDFs, most users will need a different method.

Comparing PDFs or Scanned Contracts

72% of business contracts arrive as PDF files. Word's compare feature doesn't work with PDFs, requiring either Adobe Acrobat Pro or dedicated PDF comparison software.

Method 1: Adobe Acrobat Pro Compare Files

Prerequisites: Adobe Acrobat Pro subscription ($19.99-$29.99/month). Note: Free Adobe Reader does NOT include comparison features.

Steps:

1. Open Adobe Acrobat Pro
2. Click "Tools" in the left sidebar
3. Select "Compare Files"
4. For "Old File": Click "Select File" and choose the original PDF
5. For "New File": Click "Select File" and choose the revised PDF
6. Click "Compare" button
7. Review results: Deletions appear in red, additions in blue
8. Use the navigation pane to jump between changes

Save the marked-up comparison: Click the export icon or File → Save As.

Time: 3-5 minutes per comparison. Accuracy: 98%.

Method 2: Draftable (Online Tool)

Prerequisites: Internet connection and both documents (works with Word or PDF).

Steps:

1. Go to draftable.com
2. Click "Compare Documents"
3. Upload original document (drag and drop or click to browse)
4. Upload revised document
5. Click "Compare"
6. Wait 5-30 seconds for processing
7. Review side-by-side comparison with changes highlighted inline

Free version: Unlimited comparisons with watermarked output—perfect for testing on your contracts before subscribing. Paid version ($15/month): No watermarks, 50 comparisons per month.

Time: 2-3 minutes per comparison. Accuracy: 99.5%.

Comparing Scanned Documents

Scanned PDFs are images, not searchable text. Comparison tools need searchable text to detect changes. You must run OCR (Optical Character Recognition) first to convert the image to text.

Adobe Acrobat OCR: Tools → Recognize Text → In This File. Then proceed with normal PDF comparison.

Draftable: Automatically runs OCR when you upload scanned documents—no manual step required.

Using Dedicated Software for Side-by-Side Comparison

Dedicated document comparison software (Draftable at $15/month, Litera Compare at $45/month) becomes worthwhile when you compare 6+ documents monthly, work primarily with PDFs, or need the highest possible accuracy for high-stakes contracts.

Advantages over free tools:

• Works with any file format (PDF, Word, PowerPoint, Excel)
• Highest accuracy: 99.5%+ vs. 95-98% for free tools
• Handles scanned documents automatically (OCR)
• Cloud-based: Access from any device
• Faster processing for large documents
• Professional reports suitable for sharing with clients

Decision factors:

Choose Draftable ($15/month) if:
• You compare 6-20 documents monthly
• Most contracts arrive as PDFs
• Time savings worth more than $15/month (30 minutes saved = breakeven)

Upgrade to Litera Compare ($45/month) if:
• You compare 20+ documents monthly
• You need batch processing (multiple comparisons simultaneously)
• You're in legal/compliance role requiring audit trails

Pros and Cons of Each Method

Comparison of all document comparison methods:

Method	Cost	Time/Doc	Accuracy	PDF Support	Best For
Manual Visual	Free	45-60 min	80-85%	✅	Never recommended
Word Compare	Free*	2-3 min	95%	❌	Word docs, 1-5/month
Adobe Acrobat	$20-30/mo	3-5 min	98%	✅	Existing Adobe users
Draftable	$15/mo	2-3 min	99.5%	✅	PDFs, 6-20/month
Litera Compare	$45/mo	2-3 min	99.7%	✅	High-volume, 20+/month

*Word Compare requires Microsoft 365 subscription ($7-13/month)

Best Practices for Accurate Comparison

Following these practices improves accuracy from 95% to 99%+ regardless of which tool you use:

1. Verify You Have the Correct Versions: Check filenames and dates before comparing. The most common error is comparing the same document twice, resulting in "no differences found" when changes actually exist. Use clear version naming: "Contract_v1.docx" and "Contract_v2_final.docx" with dates.

2. Document Expected Changes: Before running the comparison, note what changes were supposed to be made ("increase price from $500 to $750"). Compare the results against your expectations. This catches incomplete changes and unauthorized additions the other party might have inserted.

3. Read Changes in Context: Don't just note that "30" changed to "3"—read the full sentence: "Must notify within 30 days" becoming "Must notify within 3 days" cuts your deadline by 90%. Assess the business impact of every change, not just whether something changed.

4. Pay Attention to Formatting Changes: Bold or italic changes can signal newly emphasized terms. Font size changes might hide de-emphasized clauses. Watch for white text on white background—a deceptive tactic sometimes used to hide terms.

5. Look for Moved Content: Comparison tools show moved text as deletion plus addition. Verify the content actually moved unchanged rather than being modified during the move. Compare the "deleted" and "added" versions word-for-word.

6. Save Every Comparison Report: Export and save the marked-up comparison as evidence of what changed between versions. Create a "Contract_Comparisons" folder with dated reports. This provides an audit trail if disputes arise about what was agreed versus what was changed.

These practices add 5-8 minutes to your comparison review but dramatically reduce the risk of missing critical changes. The time investment pays for itself by catching the 1-in-20 change that manual review misses.