AI Can Write the Words. Judgment Determines What They Cost You.
The difference between generating documents and exercising judgment
When a legendary VC posted that he used AI to close a financing without lawyers, I could hear founders and fund managers everywhere in my head asking the same question:
Do I still need my lawyer, or am I just burning money?
Recently, Venture Capital stalwart and all-around cool guy Brad Feld published an article detailing how he used a Google LLM and precedent documents to complete an early-stage financing, thus bypassing legal counsel and avoiding his firm’s proposed $50,000 fee.
While I could spend this whole article taking a huge pro-AI or anti-AI stance, you’re probably more interested in what Brad actually did here: choosing not to use counsel.
Whether you’re a founder raising capital or a fund manager deploying it, I can imagine you asking:
“Do I not need my lawyer anymore? $50,000 and dealing with you, or $0 and bossing ChatGPT around? Sign me up!”
I don’t think Brad was dismissing lawyers or declaring them obsolete. His post reads more like an observation from someone deeply experienced, who remembers the era before standardized documents (I am very glad I was not practicing back then!).
So, can you ditch your counsel like this venture capital veteran did?
The answer is, “despite what people think, probably not.”
A Critical Distinction
Before we go any further, it’s important to say this plainly:
This approach works for people who already know exactly what “good” looks like—because they’ve seen hundreds of deals from the inside.
For everyone else, the risk isn’t that AI can’t put words together to make a document.
AI is pretty good at following commands.
The risk is that you won’t know when it drafts something dangerous.
What Makes This Situation Different
Let’s focus on what makes Brad’s position unique compared to founders and fund managers asking whether they can replace their counsel with ChatGPT.
He has more knowledge than almost anyone in venture capital (but maybe not you after regularly reading this newsletter!). He’s done the deals and likely knows more than many attorneys and dealmakers.
Second, he used a Google LLM after feeding it substantial precedent documentation. Brad’s years of experience allowed him to understand precisely what he wanted from the deal and to curate the right examples to feed the LLM.
The Questions You Should Be Asking Yourself
These two factors present a few questions for those thinking they can do as Brad did:
First, do you have Brad’s depth of expertise to judge whether the AI’s output follows market standards and protects your interests?
Second, do you have high-quality precedent documents to train the AI, along with the judgment to select the right ones?
If you’re raising your first priced round or deploying your first fund and don’t know how liquidation preferences, pro rata rights, or protective provisions can blow up in your face (or in your portfolio companies’ faces), you don’t yet have the judgment layer AI can’t supply.
The Price Question Everyone Asks
You may be thinking: If most people can’t rely solely on a $20-a-month ChatGPT subscription, why do I still need expensive legal counsel?
Whether you’re managing a fund or building a startup, there’s a massive price gap! What exactly am I paying for?
The problem with comparing AI to legal counsel isn’t the price gap—it’s the risk gap.
AI mistakes are cheap up front and devastating later (I’ve spent a lot of time cleaning them up).
Legal mistakes tend to rear their heads when you have the least amount of time to deal with them.
What You’re Actually Paying For
Contrary to popular belief, you’re not paying lawyers just to “fill in the blanks.”
You’re paying for your attorney’s insights and judgment. Those are the real values beneath the words they draft.
You’re paying them to:
Apply their judgment to ensure you don’t optimize for “standard” terms that don’t meet your specific needs.
Help you determine what’s actually urgent versus what’s posturing or a shakedown.
Connect you with their network of specialists who can help in other areas of your business.
Where AI Fits — and Where It Doesn’t
AI is no doubt a revolutionary tool, and Brad Feld’s experience is a great use case.
But tools are only as effective as the person using them.
Brad didn’t succeed because of the AI; he succeeded because of the decades of expertise he brought to it.
The real question isn’t whether AI can generate legal documents. It can (pretty badly).
The question is whether you have the judgment to know if those documents advance your interests, protect your future, reflect actual market standards, and don’t just “sound good.”
Final Thought
Attorneys aren’t there to fill in blanks or perform tasks a machine could handle.
We’re there to ask the questions you don’t know to ask, spot the risks you can’t see, and draw on pattern recognition across hundreds of deals.
We’re there to tell you when something that sounds standard is actually a red flag or when you’re being taken for a ride.
In the end, what you need isn’t just someone who knows the magic words.
You need someone who knows which words matter for you.