Reduce Legal Fees with ChatGPT

June 02, 2024

ChatGPT, Claude.ai and other AI tools will always warn you that they’re not a lawyer and can’t provide legal advice, but this is one of the areas they’ve improved my productivity more than any other.

I’m not a lawyer, but I’ve often had to understand a lot of legal concepts in order to make product decisions over the years. I became pretty good at managing lawyers in order to build products that are legally compliant, scalable, and have the best user experience possible.

It’s not about not having a lawyer

It’s about making your time with your lawyer more efficient.

Conversations with lawyers are slow, high-level, and frustrating when you don’t have the same breadth of knowledge that they do. Once you have an idea of what you want to do and what is possible, suddenly lawyers can be very efficient.

In the past, the way I’d solve this was just spending more time with lawyers - multiple sessions asking questions, interviewing different lawyers on the same topic and circling back to each other, etc. This is expensive, time-consuming, and annoys the lawyers eventually 😅

Instead, I now replace a lot of that learning time with conversations with ChatGPT and Claude.

Specific Ways I’ve Used AI

Analyzing and understanding existing contracts

I used Claude to analyze an 80-page contract written in Chinese by asking for an overview of each section, then explaining the current situation and asking it to find the most relevant clauses and possible issues we could raise with our lawyers. This was shockingly good.

Planning changes to docs

We recently had to update our privacy policy at Quill because we are adding end-to-end encrypted team sharing and syncing between computers vs. being a purely single-player local app. AI was very helpful identifying sections that might have to change and even some possible language to use. I shared this with my lawyer and it saved him a lot of time.

Strategy Planning

When finding a lawyer for a specific issue, we had to interview quite a few different lawyers and talk about how they would approach the problem. I used Claude to create questions to ask each lawyer and also to understand their suggested approaches. This helped us find a lawyer whose plans we believed in and aligned with how we would approach the problem.

Rough draft docs

Here you can actually have the AI draft a legal doc for you, which you then share to your lawyer for them to critique.

• Never take the first version as the final version. Copy the doc to another conversation with a different model or the same model to improve. Keep doing this until there are no incremental improvements.
• This works only for simple documents when what you want is a doc that does what you say and keeps the language as straightforward as possible. Think SAFE, not merger agreements. Lots of legal templates have extra terms because they’re designed to be used in a million different cases, so you can sometimes create simplified versions that are easy to understand.
• This also works best for relatively standard documents. AI models are trained on the internet, so the things that are mentioned the most are what they know the best.
• Your lawyer may throw out the whole thing and give you a new doc instead - that’s fine. Half the point of doing this exercise is so that you understand why the document contains the language it does.

Feedback on draft docs from our lawyer

Large language models really want to give you want you ask for. I like to take advantage of this by giving them documents that are already in good shape asking them to give me a specific number of critiques and improvements that could be made. They’ll aways come up with something!

e.g. “Give me 5 specific critiques of this employment contract and improvements that you would make”

You know you’re in good shape when you read through them and don’t find any that you feel are real issues. For example, they might say “There’s no arbitration clause” vs. “You specified the jurisdiction for the contract as Delaware but you may want to consider other possibilities”.

If your gut feels like something might be wrong or missing, the AI can help you figure out why that is. “Am I right to be worried that this contract might be putting too much liability on me? Show me specific terms that contribute to this or should be modified.”

Process

1. Explore the topic - expand the set of possibilities

Your goal here is for the AI to help uncover new options and understand why some of them are the default. Prompts you’ll use here include

• “Give me an overview of X (e.g. ways to give employees equity)”
• “Give me 10 other, less-well-known options for X”
• “How do other people approach problem X? When would each of the possibilities be appropriate?”
• “Give me a table comparing pros and cons of all the options”
• “I’ve heard there’s a way to do X. Tell me how that could be possible” (sometimes you may even want to give it something you know is not possible just to see what other concepts it references)
• “I’m in California - how does this change?”
• “Walk me through {specific regulation, law, or clause}. Why is this important?”
• “What challenges will I encounter if I do Y?”
• “I’m trying to do X. Given my context Y, what are 3 strategies you would suggest?”
• “I don’t understand term X. Explain it to me from first principles.”

2. Narrow in on best 1-3 options

Once you have a sense of what the possibilities are, now you know enough to figure out the 1-3 options you want to pursue with your lawyer. This judgement is mostly on you at this point. You should also challenge the decision of the AI more.

• “Is the User Consent and Rights statement you just made supported by something specific in the document?”

3. Draft sample language and plan a discussion with your lawyer

Now you tell the AI which approach you want to take and start drafting. Depending on what you need as an output, you might ask for sample language for a document, a summary, or notes for an upcoming conversation with your lawyer.

4. Write an email to your lawyer

Ask the AI to write an email to your lawyer giving them an overview of what you’ve decided.

• “Don’t make changes directly, but write very clear instructions to my lawyer about which sections need updating, what sections need to be added, and give some suggested legal language he can use in those sections. You can refer to sections by their numbers, etc. in your instructions. Keep the instructions focused.”

When I did this, I found that the AI writes in a very definitive fashion, so I prefixed this in my email so that my lawyer knows I’m giving him some of my existing research, not telling him exactly what to do:

“Here are some suggestions for the changes we might make. I organized these with ChatGPT, so the list below is written in a very definitive style, but you’re the expert - treat this as my suggestions but use your judgment about whether this is correct and/or sufficient. Thanks!”