JLC
Johnny LeHane
Technology & Business Strategy
Governance & Alignment

Term Sheets Before AI Drafting

AI makes a 20 page agreement effortless to write. That is the problem. If the two sides never agreed on the bullets, you now have two 20 page documents arguing with each other.

Two bots debating clauses while the humans burn weeks is the most expensive failure I have seen in AI-assisted contracting. Agree on the term sheet first.

The failure mode

Both sides generate a full draft from assumptions nobody reconciled. The negotiation then happens inside the document, slowly and opaquely, and every revision costs tokens and patience. The humans never agreed. They argued through their assistants. Each LLM is optimizing to win its principal's position, and the result is a 40 page document encoding two worldviews, and a relationship that is worse than when you started.

The fix

Agree on a short, plain-language term sheet before anyone opens a drafting tool. Five to ten points. The ones that matter. Once there is consensus at the bullet level, expanding to a full document is fast and mostly friendly. The term sheet is the contract about the contract. It forces the human decision before the machine elaboration, which is the same inversion the 3-Draft Workflow applies to writing.

"AI drafting fatigue" defined

It is the exhaustion a team feels after reviewing the fifth AI-generated revision that still misses the point, because the point was never written down. The AI did not cause the fatigue. Using the AI to avoid the conversation the AI cannot have caused it. A term sheet is that conversation, compressed to a page both sides can sign off on in an afternoon.

Where this applies beyond law

Product specs. Project charters. Partner briefs. Any document two parties have to agree on benefits from a bullet-level term sheet first. The moment you hear yourself say "just have the AI draft it and we'll react," stop. That is the moment the term sheet is missing. Write the five points by hand. Let the machine expand them after.

One-line takeaway

Agree at the bullet level. Expand at the document level. Never the other way around.

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