I’m on vacation this week. My summer vacation is at sea, which is fitting, since the movie of the summer, The Odyssey, involves a “hero” on a ship. And so I’m deviating from law and policy in this newsletter to indulge my other passion: cultural criticism (or maybe high-school level classics). What was really going on in the Odyssey? Just know: This newsletter contains spoilers to the extent that is even possible. The movie has been out for 6 weeks and is based on a 3,000-year-old poem, so it’s hard to spoil it.

Homer, or the group of poets writing under that name, composed the Odyssey around 800 BCE. He was writing historical fiction about events roughly 400 years earlier, around 1200 BCE, which is generally treated as the end of the Bronze Age. Archaeology tells us that most of the great civilizations of the eastern Mediterranean, like Mycenaean Greece (where the Odyssey takes place), collapsed about 1200 BCE. We might think of history as linear: 800 BCE, being after 1200 BCE, must have been better than 1200 BCE. That’s a very modern way to think of the world. 800 BCE was most definitely not better than 1200 BCE, and “Homer” knew that. People in 800 BCE were basically living in the ruins of the great civilizations before them. It was actually known as the “Greek Dark Ages.” In retrospect, everything worked out since classical Greece and Rome were still ahead of them, but they would not have known that at the time.

Science teaches us the reason that so many civilizations collapsed around 1200 BCE was climate: a megadrought that ran anywhere from 150 to 300 years, and they also think there were some major earthquakes, and displaced people wreaked havoc on already weakened civilizations. Homer probably did not know that, either. But he knew that something ruined the world. It’s pretty apparent that the Odyssey is an allegory for the collapse of civilization. The traditional understanding of the Odyssey, at least the one that I was taught in high school, is that human hubris brought about vengeful gods that basically ruin everything. That was probably all the folks in Homer’s time needed to understand. Interestingly enough, our culture keeps churning out movies where some environmental stressor brings about the end of the world: the one where the earth freezes over, the two 1998 movies about a comet or asteroid hitting the planet, the satire we made of that a few years back (Don’t Look Up), Cuarón’s Children of Men, which uses a fertility collapse the same way. Our culture does not have vengeful gods, but we always imagine the end coming based on forces beyond human control.

But Christopher Nolan’s Odyssey, the one that has captured the imaginations of Western civilization three thousand years after Homer’s, is not one of those environmental collapse and end-of-the-world movies. It actually does not really have a lot of gods in it (vengeful or otherwise), and those that do appear seem to be a little deflated, to be honest. Rather, the cause for collapse in Nolan’s Odyssey is a civilization undone from within because people kept violating “Zeus’s law.” Zeus’s law is “the sacred law of hospitality between guests and hosts—a weary traveler could expect food, comfort and shelter from friends and strangers alike, the only obligation to be a respectful guest.”

The first and worst violation of Zeus’s law is not actually in the Odyssey, but is the act that legend tells us started the Trojan War and is spoken about a lot in the Odyssey: Paris of Troy is Menelaus of Sparta’s guest and repays that hospitality by running off with his host’s wife, Helen (henceforth known as Helen of Troy). Then Troy’s fall, which is shown in the Odyssey, is wrapped in the same theme from the other side: the Trojan Horse is brought into Troy, and the guests hiding in the Horse end up sacking the city (and Odysseus regrets his role in that betrayal). And then when Odysseus’s men end up being the “guests” of the Cyclops, he eats a few of them, and Odysseus sticks a burning stick in the Cyclops’s one eye and blinds him. By then, everyone is violating Zeus’s law, in the first degree. And then when Odysseus finally reaches home, he slaughters the suitors squatting in his house, who’ve spent three years eating his stores and courting his wife: moochers, and bad guests, in the fullest sense. Zeus’s law would seem to be on his side there, so we sort of cheer when Odysseus slaughters the suitors. But the point is the same: someone is not following Zeus’s law, and havoc ensues. Odysseus is most definitely a recidivist at violating Zeus’s law, even if it seems to be the right thing to do under the circumstances. After all, you reap what you sow.

Homer’s poem ends with the gods forcing a peace on Ithaca to prevent a civil war between the families of the suitors and Odysseus, which is sort of a cop-out. Nolan’s Odyssey actually comes with a more creative, if not muddled, ending: having basically shown that Zeus’s law is ill-suited for his “new” age, the movie concludes by Odysseus gracefully sailing off to the west with his wife, which had the look to me of a well-preserved and rich baby-boomer’s retirement party. The final sail to Mar-a-Lago? And of course, his son, Telemachus (same actor who plays Spider-Man, ironically) is left to clean up the mess and live in this new age his father so graciously bestowed upon him. Good luck to you, Telemachus.

So what is the point? A system built on mutual obligation only survives if people actually honor it, and the people who break that trust rarely stick around to repair it.

And now back to my cruise.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

Most people see the world in terms of outcomes. Did I get what I needed out of this? You’ll hear people note, almost as an afterthought, that something was “easy” or “hard” to get, but the outcome is what actually seems to matter to them. That is just a fact of modern, hectic life: how you got there matters less than whether you got there. That is not how everyone sees the world. The flâneur does not care where they end up. They just observe, and the walking is the point.

Lawyers are not flâneurs, but we do think in terms of process, trusting that a good process leads to a good result. When the process goes sideways, we never fully trust the outcome, even when we win. Don’t get me wrong: I’ll take the wins where I can get them, and I agree that it’s better to be lucky than good. But if you’re just plodding along, day after day, stumbling into good or bad outcomes, you’re doing it wrong. You won’t have many repeat clients. Clients pay for advice on how to get where they need to go, not simply to be delivered there.

Side note: there’s a theory going around that AI finally lets lawyers sell outcomes instead of process, pricing the result instead of billing by the hour for the work. Like most AI hype, that’s nonsense. Lawyers will use AI to help solve hard problems, the way a flâneur might take the bus, or the high-speed train, and still be a flâneur. If a problem can be fully “solved” by AI, it probably was not a legal problem to begin with. All you needed was a template. You could have googled one.

Two events this week show what happens when a process gets short-circuited, in one case almost fatally, and in the other almost comically.

Todd Blanche, Trump’s Acting Attorney General, is on the cusp of being confirmed to the job permanently, but the process to get him there has been ugly. Start with the fund. I wrote in Fractionally Legal 63 about the roughly $1.8 billion “Anti-Weaponization Fund:” Trump effectively settled a lawsuit with his own administration and proposed to pay the settlement out of the federal Judgment Fund, sitting on both sides of the table as plaintiff and as head of the executive branch he was suing. My view then was simple: the impulse (compensating people harmed by politically motivated prosecutions) was directionally right, but the mechanism was not. If you want a real remedy, pass a law. Congress can appropriate the money and build a court-supervised claims process, the way it did for the Black Farmers settlement I worked on. You do not conjure a billion-dollar fund by settling with yourself.

That fund became the price of Blanche’s confirmation, and it still got paid the wrong way. When Blanche was put up for AG, a few anti-Trump Republicans balked. So Blanche struck a deal to rescind the fund “administratively” in exchange for their votes which also gave cover to all the other Republican senators to go along. Getting rid of the fund was the right thing to do, but it’s just sort of an agreement, in writing (certainly better than not), rather than anything that has the force of law governing how certain cases against the Federal government can be settled, which should have been the real price. Everybody knows these people lie to get what they want. See Kennedy and vaccines.

So what’s really happening is collusion. Fund or no fund, Trump is going to have the U.S. Treasury pay large settlements to his allies. With Blanche in charge, if you’re a friend of the administration, and happen to sue the Federal government, you will get a fat settlement. Don’t believe me? It’s already happening. Paul Vaughn, an anti-abortion protester convicted in 2024 for blockading a Tennessee reproductive health clinic, was pardoned by Trump in early 2025. His attorney then announced a seven-figure settlement with the DOJ, framing it as vindication against what they called Biden-era prosecutorial abuse. I suppose lawyers have to actually file suits rather than have the purported “victims” file an application. Or do they? I see disputes get settled off demand letters all the time. You can bet certain lawyers are drafting “demand” letters to Blanche as you read this.

I don’t necessarily think this phenomenon is unique to Trump, although as with all things, he is the most brazen. Imagine if a cadre of socialist-aligned lawyers sued New York City for its failures, with the city settling generously and admitting fault along the way. Doing well by doing good. Sounds far-fetched? This week, the civil rights attorney Ben Crump filed three lawsuits on behalf of 41 victims and the families of people who died in last year’s Harlem Legionnaires’ disease outbreak (not to be mistaken for this year’s outbreak, which was under Mamdani’s watch). The complaints allege that New York City failed to develop and follow a water management plan required by the New York State Sanitary Code, and failed to meet the code’s cooling tower registration, inspection, testing, remediation, and recordkeeping requirements.Cases like this are notoriously hard to win against a city government. Under New York’s “special duty doctrine,” a plaintiff generally cannot recover from a municipality on an ordinary negligence theory. You have to show the city assumed a specific duty running to you individually, not just a duty owed to the public at large. New York’s highest court affirmed the doctrine as recently as 2022, on facts far more favorable to the plaintiff: a young woman with developmental disabilities was tortured and murdered after a county’s child welfare agency investigated multiple abuse reports and closed the file each time (Maldovan v. County of Erie). If a plaintiff can’t win on those facts, how could they possibly win here against New York City? Why sue the city itself, rather than just the contractors who actually maintained the towers and are not subject to the special duty doctrine (who are also named as defendants, and have a real exposure problem)? I don’t know for certain, but I can speculate: as with the anti-weaponization fund, the process is being short-circuited, and the taxpayers (again, me) are the victims.

Then there is the OpenAI and Hugging Face story (yes, Hugging Face is the name of a real company), where everyone seems to be getting along, maybe even hugging, which is usually a sign something is being papered over. What happened? In July, OpenAI disclosed that its own models took it upon themselves to hack Hugging Face without being told to. For reasons too complicated to get into here, OpenAI was running an experiment to see how its models solved problems, and because the easiest way to solve the problem was to hack into Hugging Face, that’s what it did. It’s basically what everyone has been warning about. Don’t worry, though: OpenAI took responsibility, and the two companies put out a cooperative joint statement about strengthening defenses together. Do we all feel safer?

You should not. OpenAI’s hack was illegal in about a dozen ways, and maybe even two dozen once a creative lawyer got hold of the claim. There are plenty of private remedies and statutes that could apply here, starting with the Computer Fraud and Abuse Act. I’m not usually a fan of litigation for its own sake, but a real claim, or at least the credible threat of one, is the process that should have happened. If OpenAI had to pay through the nose for this, every general counsel at every AI company in the country would suddenly be paying very close attention to what their models can do when nobody’s watching. General counsel at these companies are attuned to risk and when your product malfunctions and damages someone else’s, or you make a bad design choice that hurts a third party, there is real exposure. That’s what a real check looks like. I hope OpenAI understands that the next company whose systems get breached by a wayward model might not be so forgiving. Or maybe they will be, which is the real concern.

Here’s the thing about a slushie: it’s sweet and cold, but there’s no real substance to it once you look closely, just crushed ice and syrup. Skip the process and you get something that goes down easy in the moment. But slushies melt. And when they do, you’re left holding a cup of sugar water and a big mess.

One More Thing

New video content is coming to my Instagram, @LawyerJesse1977. Credit to my kids for the push. Their exact words, more or less: “No one reads your newsletter, but everyone watches videos.” Message received. Videos coming soon.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

New York City Mayor Zohran Mamdani has apparently spent the last few weeks ordering the City’s Law Department, the largest municipal law office in the country with over 760 attorneys, to chew on a question any first year associate could have answered before lunch (even without AI): could New York City actually arrest Benjamin Netanyahu under the ICC’s warrant if he shows up in New York City. On July 21, Mayor Mamdani posted a video conceding the obvious: No. But for good measure he added that Netanyahu “is not welcome in New York City, nor is any other war criminal at large.” Glad we got that straightened out.

Presumably the Law Department spent equal time working through whether the City could, in addition to not welcoming the war criminals, actually act against the rest of the ICC’s most wanted. Like Omar al-Bashir, wanted for genocide in Darfur since 2009. Or Joseph Kony, wanted since 2005 for mass abduction, sexual enslavement, and forced conscription of child soldiers in Uganda. Or someone who also visits the UN General Assembly every few years: Vladimir Putin, wanted since 2023 for deporting Ukrainian children. And don’t forget about Haibatullah Akhundzada, the Taliban’s supreme leader, wanted since 2025 for gender persecution of Afghan women and girls. Not a word. Mamdani’s Law Department was interested in Israel, and Israel only.

That’s a pity. Kony is the one closest to home for Mamdani. Mamdani was born in Kampala, Uganda, the country Kony terrorized for two decades: mass abductions of children, forced conscription of boy soldiers, sexual slavery of abducted girls, and mutilations used as a terror tactic, conduct grave enough that Kony became the subject of the ICC’s first-ever arrest warrant, issued in 2005. Kony is still at large. I have never once heard the mayor mention him. There might be a reason for that. Mamdani’s own father, Mahmood Mamdani, a Columbia professor, argued in a 2012 Al Jazeera piece that the ICC’s warrant for Kony was the wrong call because it stopped the sides from actually solving the conflict and was an example of an international tribunal meddling in local affairs. The elder Mamdani’s conclusion, in his own words, was that Kony’s war was “a Ugandan problem calling for a Ugandan political solution,” not a matter for international prosecution. Funny how sometimes we like the ICC, and sometimes we don’t. Perhaps we actually don’t really care much about the ICC. Perhaps we just use it to advance our political agenda. How enlightened.

I know that the younger Mamdani is not his father, but he has never extended Netanyahu’s warrant the same nuance his own father extended to Kony’s, a conflict both Mamdanis presumably know more about since it’s closer to home in the same way that many Jewish (and Palestinian) New Yorkers have a much more nuanced view of what is happening in Israel and the Palestinian territories. The question of whether an ICC process actually helps the people it claims to protect, or just entrenches the war and is used as political fodder to score cheap points for the global media. His father asked that question about northern Uganda. Mamdani has never asked about Gaza.

The elder Mamdani is an academic, and academics deal in nuance even if they really have an agenda they are trying to push. The younger Mamdani, on the other hand, is a politician and, these days, successful politicians peddle outrage and distraction. Apparently two of our most successful politicians are trying to use a conflict in the Middle East to distract us all from their failure to actually make the lives of the people who elected them better. I will admit that Mamdani is actually better than Trump at the art of distraction, in part because he is much smarter. But, as explained below, they are just two sides of the same coin.

It’s also a pity that Mayor Mamdani did not talk about the actual law, which is genuinely interesting and it explains why New York’s 35,000 police department is not generally engaged in the hunt for war criminals abroad or, for that matter, domestic criminals who committed crimes outside New York: New York doesn’t have jurisdiction to prosecute crimes outside of the five boroughs and deploying our police department to investigate crimes and catch criminals who can’t be prosecuted is a waste of everyone’s time. It’s pretty obvious, but it’s nice that some lawyer prepared an opinion explaining that to our erstwhile Mayor.

The second legal reason why the NYPD can’t arrest war criminals is because there was no crime: The United States never ratified the Rome Statute that created the ICC and, therefore, that treaty does not have the force of law, unlike treaties the U.S. actually ratified. The third legal reason is that it’s actually illegal under federal law for the city to prosecute alleged war criminals: the American Servicemembers’ Protection Act bars state and local cooperation with the ICC absent a presidential waiver, and none has been given. The reasoning on that prohibition is sound and rooted in reciprocity. The United States has hundreds of thousands of U.S. troops stationed abroad and we don’t want governments who host our troops to start arresting them as “war criminals” under any other country’s, or international, law. Fourth, I don’t think this is actually written anywhere, but it’s long been acknowledged that sitting heads of state carry personal immunity from foreign domestic courts. And, finally, this one is super local: the UN Headquarters Agreement bars local police from even obstructing a member state’s UN representative traveling to and from UN grounds. While I am sure that most U.N. members would look the other way if Netanyahu got arrested, if you hauled off Putin, the U.N. would probably relocate itself to Moscow. Stack those doctrines together and the answer was never in doubt. Spending real legal department hours confirming it is bad lawyering for the lawyers that did not shoot it down on the initial go (or perhaps even promoted it for brownie points), or good theater.

Which gets to the real waste. New York has an actual list of things Mamdani was elected to fix: affordability, transit, housing, safety. None of it required a legal opinion about a foreign head of state’s UN travel plans. You could argue a mayor can walk and chew gum, speak out on Netanyahu and still run the city. Fine, except NYC has zero enforcement power here, so this isn’t multitasking. It’s spending scarce legal resources on a question with a preordained answer, chasing an outcome the city cannot deliver either way, good idea or not, and this was not a good idea.

Trump and Mamdani are just different sides of the same coin. Trump let a genuinely good, bipartisan housing bill, the 21st Century ROAD to Housing Act, become law this month without even signing it, because he was too busy relitigating the SAVE Act and picking a fight with Iran. Housing got a little easier for Americans this summer and almost nobody noticed, because the President made sure the news cycle was about voter IDs instead. Mamdani doesn’t even have a housing win to bury. He has no legislative accomplishment of that scale yet at all, and he is spending his political capital on a foreign policy question his own office admits he has no power over. Trump and Mamdani, once again, turn out to be more alike than either would like to admit: showmanship over substance, a foreign fixation standing in for an actual result. And the same Democratic Socialists and other progressive groups who are shouting at the top of their lungs that Trump’s Middle East obsessions distract from dealing with the affordability crisis at home have been remarkably quiet about their own Mayor doing exactly that. I actually agree more with the socialists than the far right in this country, but I applaud the far right for calling Trump out on his weird foreign fixation. Shame on the left for not doing the same. If foreign policy theater is bad when Trump does it, it’s bad when Mamdani does it too.

So what’s really going on here? Why is Trump engaged in a war in the Middle East that no one wants, and why is Mamdani talking about arresting a foreign leader when he clearly does not have the power to do it? This is about what happens when ideologies rule. They thrive on divisive issues that affect very few actual people but seem to outrage many many more. The plight of the Palestinians is heartbreaking but has zero impact on the life of 99% of New Yorkers. Trans people using bathrooms affects almost no one, but it’s one of the first things someone on the right talks about to discredit the left. Ideologies use this to distract from their really bad solutions to actual problems. Remember free buses? I forgot and so did Mayor Mamdani. Why? Because it was a really bad solution to making our mass transit system more efficient and accessible. So let’s talk about Israel instead.

Keep thinking, keep building (yes, I know this is part of Anthropic’s new marketing campaign: for the record, I used it first),

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

I hope everyone had a happy 4th and is getting into the heart of the summer. The official “Federal” 4th of July and Semiquincentennial celebrations were, frankly, pretty lame. Communities across the country came together with their own celebrations. My hometown of New York City had such a great time that we apparently set the Brooklyn Bridge on fire.

It’s important to remember that the Semiquincentennial is not one day- it’s a full year. I am confident that this year is going to unfold in a way that is going to reaffirm the American spirit of reinvention and replenishment, even if our central government is, at the moment, inept at the actual work of governing, prosecuting a war and, thankfully, prosecuting their political opponents. It’s not that hard. You just need credibility. This junta has none.

There is one place where Trump and his sycophants thrive: corruption. You can read all about it here in President Trump’s 927 page “certified annual financial disclosure report.” which pretty much details all the ways that Trump has monetized being President. He is not hiding it. In fact, he is relishing in it, almost glib at his ability to steal at will. This is not being done in the shadows. It’s all right there. It’s almost a taunt: catch me if you can.

Trump has gone so far as to nominate his personal attorney, Todd Blanche, to be the attorney general. As I’ve written about many times, these are not smart people, and not good lawyers. That is the point. The only thing they are there for is to make it impossible for the Department of Justice to go after wrongdoing among Trump and his sycophants. And so we get a 927 report that all but outlines all the wrongdoing. Trump could have violated the disclosure laws with a lame excuse about executive privilege (remember that from the first Trump administration) but, alas, he just put it out there.

To understand that Trump’s financial disclosures are gloating and not an attempt to bury the truth, you first have to understand how this Administration thinks about transparency. Remember, this is an administration that had to be sued to keep following a plain disclosure law it had already been obeying. When OMB quietly pulled the Public Apportionments Database offline in March 2025, a federal judge ordered it restored and told the government, almost in these words, to stop violating the law (CREW v. OMB (D.D.C. July 21, 2025)). Add the DOGE records they insist aren’t subject to FOIA, the auto-deleting Signal chats, and the federal datasets scrubbed overnight, and the pattern is unmistakable. The 927 page disclosure report is an anomaly.

Do Americans tolerate this level of corruption? It depends. Certainly, if life was getting better for the average American, they would likely overlook this - after all, if we have some aversion to paying government officials well, we might as well let them enrich themselves “off the books.” That is how poor countries that can’t actually afford to pay public servants operate: their governments just steal (legally because the thieves make the laws) and the corruption becomes endemic. These countries tend not to have democratic systems. When the country does well, everyone looks the other way. But once things go badly, governments get overthrown. America is not a poor country and we’re a democracy. But the dynamic is the same: we don’t pay our public officials very well and most people will overlook public corruption if things are going well for them. But a system that only exists to enrich a few people at the top won’t last long.

The same logic runs through executive compensation in the private sector, which has grown from generous to almost unaccountable. The mechanics are simple. When a company is performing, shareholders rarely scrutinize what the CEO takes home (in oligarchs we trust). When it stumbles, they start asking questions. But their only real leverage, their decision to sell the stock if executive compensation gets out of line with share value, depends on connecting two facts: what the executives were paid, and what shareholders received for it. Sever that link and the questions stop. You do not have to defend the pay. You just have to make sure no one can measure it against the results.

So it’s no surprise that this is what Trump’s SEC is now proposing. Release No. 33-11419 (May 19, 2026), billed as the largest overhaul of public-company reporting in twenty years, would raise the “large accelerated filer” threshold from $700 million to $2 billion in public float, moving roughly 80% of public companies into a reduced-disclosure tier. Those companies could drop the Compensation Discussion and Analysis, the CEO pay-ratio figure, and the pay-versus-performance table (the one disclosure built to tie pay to results), and could stop holding say-on-pay votes entirely.

None of this happens in a vacuum, and the backlash is already here. Socialists winning real elections is not an accident. It is a reaction to precisely this, the same concentration of wealth that fueled the last socialist bloom a century ago. Around 1910, at the peak of Gilded Age inequality, roughly 1,200 socialists held elected office in this country. Today the number is closer to 100, but it is climbing again for the same reason it climbed then: when a handful of people capture an obscene share of the gains and stop bothering to hide it, everyone else starts shopping for an alternative. I do not think their alternative works. Demand-side economics rarely delivers what it promises, and the places where some version of it has functioned (a few wealthy, homogeneous Scandinavian countries) do not scale (a subject for another day). But the genuinely interesting thing about the American version is not the economics at all. It is that this movement is post-racial. It reads the country through class rather than race, which is a real break from the past and, honestly, a more consequential development than any of its spending plans, most of which will never work as intended.

Whether or not the socialists have the answer, they have correctly read the problem, because we are drifting toward a world where the people who are supposed to be in charge (voters and shareholders) can no longer see enough to hold anyone accountable. Transparency was never a courtesy the powerful hand out when things are going well. It is how the rest of us find out when they are not. Strip it away and the vote does not matter, the sale does not matter, and the disclosure law is a formality. What is left is a single operating principle, quietly running under all of it, from the apportionments database to the proxy statement: in oligarchs we trust.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

June is generally the busiest month of the year. Transactions and litigations slow for the 8 or so weeks between July 4 and Labor Day, which means everything gets packed into June. Not to mention end of school, start of camp for those of us in the parenting track, and your odd June wedding or two. And someone decided to put New York tech week in June which, although probably not a good use of time for anyone actually building a product, is a great opportunity to market yfgc.ai as the future of faster, cheaper legal services. Also, Happy Pride!

As if that is not enough, the Knicks won the NBA championship, which required us New Yorkers to celebrate for a few days. And then we also had Democratic Party primaries in New York, which required us to collectively say “WTF” (more on that below). In theory, we should now be turning to celebrating our nation’s 250th anniversary (which I prefer to call the “Semiquincentennial“). I’m happy to celebrate because I love America, but, alas, as I wrote about last week, our current national government is too incompetent to plan anything beyond a drag race in August, a political rally, and a lame Great American State Fair, where not even every state is showing up. As I said last week (and the New York City democratic primaries prove), our institutions are hollow. Something is coming to replace them, but we’re unsure exactly what. That ferment and evolution is very American. If we have anything to celebrate this Semiquincentennial, it’s that we can be critical, resilient and adaptable.

As we conclude June, there is good news (mostly), bad news (actually dumb), and some real ugliness we need to acknowledge and address.

The Mostly Good

The 21st Century ROAD to Housing Act passed the House 358-32 and the Senate 85-5. This is good. But of course, at the moment, our Toddler-in-Chief won’t sign the housing bill into law until he gets his voter suppression bill. I suspect it will become law, either because Trump will back down on his threat, or if he does not sign the bill or veto the bill within 10 days (excluding Sundays) while Congress is actively in session, the bill automatically becomes law without his signature.

I’ve been writing about the housing supply crisis for a long time. It’s personal for me: like many working Americans, housing costs are by far my largest expense. It is also very important to my real estate clients for obvious reasons. I follow housing policy carefully on the federal, state, and local level. My take is that there are two solutions to the housing crisis: build more housing or depopulation. One is much less painful than the other.

The bill is generally good. It’s a supply-side bill: manufactured housing reforms and environmental review streamlining will move more projects along, and there are other provisions that reward localities for building. It also doesn’t have price caps or other demand-side gimmicks that drive up costs for everyone not in the price control system and suppress supply, which seems to be the housing policy of choice for those who don’t know what they are doing (see “the ugly” below).

There are a few things that should have been in the bill but were not, which is a miss. For a long time I’ve called for repealing the Faircloth Amendment, a law that freezes the number of public housing units the federal government can fund. Basically, it says that the Feds can’t fund any more public housing units. If we’re really going to solve the housing crisis, we need all the units we can get. As far as I am aware, the United States is the only country in the world where the national government does not add to the housing supply (except for military housing). Even if there was no actual funding, just repealing the Faircloth Amendment would have sent a message: We’re committed to housing affordability, no matter what.

The second miss is something in the bill that is just a little silly. It’s one of those boogeyman provisions that creates bad policy. I’ll disclose upfront that I represent institutional buyers of residential real estate, so I’m not exactly objective on this, but it happens to be the objective truth ;). The bill includes a ban on corporate entities owning more than 350 single-family homes. Barring institutional investors doesn’t add a single unit of supply. It drains investment capital from residential real estate based on a sentimental attachment to owner-occupied single-family housing that the economics simply don’t support. The build-to-rent carve-out for new construction is a partial save, but allowing institutional investors to acquire pre-existing homes for rent is actually a good thing. It means that a family that could not afford to buy a $1M home in a nice neighborhood with good schools could have rented it. Otherwise, they would have been locked out, gated away from the generational mobility that America is all about. That creates opportunities for millions of families and also allows for greater workforce mobility. The institutional investor restriction will require close attention depending on how Treasury and HUD interpret the 350-unit threshold, the definition of “directly or indirectly own,” and how the build-to-rent exception gets applied in practice. I’ll be watching it closely.

Side note: In a functioning democracy, I’d be writing about new legislation to address important issues a few times a year. Alas, while I write a lot about what needs to be done, I rarely get a chance to write about what has been done. That is a miss, but happy to have this housing bill as a (mostly) good. Now let’s just hope it becomes law sometime soon.

The Bad (and Dumb)

The Iran situation is an unqualified “bad.” The less that is said the better. America essentially lost a war through the sheer stupidity of Trump and his sycophants not realizing that the closing of the Strait of Hormuz would increase energy prices in America. Someone must have told them that the U.S. is “energy independent,” which is true, without explaining, in terms these morons can understand, that energy prices are set on a world market, so when the price goes up in Asia, it also goes up in the U.S. Americans are addicted to cheap energy, so once those prices went up, Trump had to give up and surrender.

I actually supported the war, so this is a really disappointing finish. The lesson I take is twofold, and directly relevant to my practice: (1) if conflict is inevitable (as it sometimes is), then you need to defuse the other side’s argument in the negotiation stage, not when the lawsuit has been filed; and (2) if you can’t do (1), then hold off the fight until you can. That’s the advice I give my clients all the time. In fact, just this week I was dealing with a messy dispute for a client. The opposing counsel was very aggressive, but we have the better hand except for one weakness where they have the upper hand. My goal this week was to address that. Now, if we can’t resolve it and it goes to litigation, they won’t have that leverage. You can’t prevent your adversary from being a jerk, but you can prevent him from being an effective jerk.

The Very Ugly: Democratic Primaries in New York City

I’m a lifelong Democrat, actually pretty far left. My progressivism is pragmatic. I want a government that works well, and that requires money, and rich people have money, and they should pay their fair share. Also, democracy is not self-sustaining and needs reinforcement by a government that protects the rights of the disadvantaged and protects minorities from majoritarian rule. It’s a very simple framework. I’m not as interested in the substance of the policies — I have my opinions but I’ll leave it to a representative democracy to figure that out. Like any lawyer, I’m very concerned about the process.

And it’s pretty disturbing that the process is breaking down. A vocal minority seems to have taken over the Democratic Party in New York City (and it’s growing around the country), not because they are substantively right (I actually don’t care as much about that) but because they are the only people voting. Only about 10% of eligible voters (which is like 5% of the population, since many in New York City can’t vote either because they are non-citizens or children) showed up. And in a few elections, someone who most New Yorkers would consider to be very fringe won. That is not a good process.

Two of the candidates who won are vehemently anti-Israel (some would say antisemitic, but I won’t go there except to say that I support Israel and resent being thought of as a “bad Jew” by these people because of my Zionism) and another latched onto anti-Zionism to pander to the people he knew would show up to vote. This is a process breakdown: Israel’s conflict with the Palestinians and the Shiite Muslim sects funded by Iran is not an issue in New York City. If you asked a New York voter to list issues that affect their quality of life and future prospects, Israel would almost never come up. It’s a typical wedge issue, the type of thing that Trump and MAGA perfected to drag the Republican Party to the right, and now the far left is using to drag the Democratic Party far to the left.

What do I mean? Trump and MAGA vilified trans people to push their hard-right agenda. The far left is vilifying Israel (and the jews, like me, who support it) to do the same thing. It works because Jews are 2.5% of the U.S. population and trans people are even less. Easy targets.

Stated another way, it’s not about the substance of the issue, it’s about hijacking the process to accomplish their other goals. The Democratic Socialists of America or the New York City government is not going to have a material, or any, effect on establishing a Palestinian nation “from the river to the sea,” and MAGA and Trump are not going to make trans people any less trans. It’s about using wedge issues to acquire power to implement your actual policy agenda. A functioning democracy is actually abhorrent to extremists because a lot of their policies, both on the far left and the far right, are pretty abhorrent to most Americans. So extremists try to hijack the process by designating boogeymen.

The primary election in New York goes from bad to absurd. I happen to live in the wealthiest and oldest congressional district in New York State, and anti-Israel sentiment is not going to get you anywhere. We have issues with quality of life and affordability for those of us who are not rich. So what was the primary about? Affordability? Crime? Homelessness? Nope! Artificial Intelligence!

It’s a pretty odd issue — old, rich people don’t have jobs, so the idea that AI is going to lead to mass job loss should not matter much. (Anecdotally, I work from home and can confirm that the vast majority of my neighbors either work from home or just do not work.) Also, no one is putting a data center anywhere nearby. Most of my older neighbors are living on pensions or investments, the former of which is more secure due to the AI boom, and the latter more valuable. They also benefit from the cost reductions (like cheaper legal and investment services) that AI is unlocking. Stated another way, AI policy has almost no impact on the voters in my congressional district (it may in other districts, but not mine). So why was AI such a big issue? No one is really sure. But it points to the fact that our elections don’t really seem to be functioning well anymore because we’re focused on fringe wedge issues, and not what matters to the vast majority of voters.

Perhaps that is why our government can’t really make the policy decisions that matter. The “mostly good” housing bill I highlighted above is a rare example of where something got done. And even then, it’s not quite done, delayed by a fight over an elections bill that threatens to further undermine and hijack the democratic process. Go figure. It’s ugly out there in these waning days of June 2026.

Happy Semiquincentennial America!

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

This should be a moment of ebullience. America turns 250. New York is hosting the World Cup. The Knicks, statistically, are on their way to their first championship in half a century. By any measure, we should be celebrating.

But that is only half true. Something like the 250th anniversary is a unique opportunity to tie the great leader to our great American past, wrap himself in the flag, and make history. If I know anything about fascists, they can put on a good show. But what are we getting? A demonstration of hypermasculinity on the White House lawn and a few really stale Trump rallies. Triumph of the Will? More like “Triumph of the Shills.” Contrast that with the spontaneous street celebrations erupting around the Knicks and you can see immediately where the actual energy is. This is an outsider era. The institutions are hollow; but the city is alive.

I turn 49 this weekend. Born in 1977, a year after the bicentennial, into a post-Vietnam and Watergate malaise that saw America searching for an identity. We landed on Jimmy Carter: the mild-mannered peanut farmer who pledged a return to civility and humility. My parents voted for him twice, and absolutely hated Ronald Reagan, who turned out to be a far more transformative figure and one who gave us the deregulated and greed-dominated culture we have today. That was that.

But I’m turning 49 in an America that is again searching. At the moment we landed on a would-be billionaire (now a real one, based on his incessant grift) who speaks bombastically of American greatness but does pretty much nothing but enrich himself and his friends. This is not the last turn, and perhaps we will have a reaction that returns us to civility or something more akin to the collective responsibility that Reagan repudiated. Anything could happen. And that is what I am proud of about America: resilience, tenacity, and reinvention. It’s how I try to live my life, and why I will always be proud to be an American even when things look a little down.

I think the action around AI, the technology du jour, is a very American story. It demonstrates, better than almost anything else right now, how irrelevant our institutions are at this particular moment, and how much opportunity that irrelevance creates for everyone else. The same churn that produced Carter and then Reagan, that swung from the New Deal to deregulation and (possibly) back again, is playing out in real time across every industry AI touches. Nothing is settled. Everything is up for grabs. That is not a reason for anxiety. For people who are paying attention and doing the work, it is a reason for optimism.

The Trump administration’s June 2, 2026 AI executive order almost certainly had AI assistance in its drafting, and it shows. It establishes voluntary frameworks, 30-day agency deadlines, and a “covered frontier models” pre-deployment review process that the industry can essentially opt out of. Big words. Little action and it’s mostly irrelevant. There is some activity at the state level, as I’ve written about before, and some halfhearted efforts at federal legislation that have almost no chance of passing anytime soon.

The executive and legislative branches are on the sideline, and real AI law is being made in courtrooms, in real time, through commercial disputes. A very American way to make policy.

Since training data is the lifeblood of a large language model, the fights over what you can train your AI on are shaping the industry. In February 2025, a federal judge in Delaware issued the first ruling on whether using copyrighted material to train an AI constitutes fair use. The answer was no. In Thomson Reuters Enterprise Centre GmbH v. Ross Intelligence, the court found that Ross infringed Westlaw’s headnotes and that no fair use defense applied: the use was commercial, non-transformative, and harmed the market for the original. Ross has appealed; this is round one, not the final word. There are tons of other people who own content also fighting with AI companies over “fair use.” Their theory is that AI companies need to license their archives to train on. They probably do. But AI can now generate plausible analysis, serviceable journalism, and competent prose from scratch, without training on any particular proprietary source. So one has to ask: are the legacy content owners winning the battle (getting the right to block the LLMs from ingesting their content) while losing the war? Can they really do anything except slow the process down, license at the margins, and eventually become something closer to nonprofit public-good entities? But the audience relationship becomes the asset rather than the content (which is commodified anyhow), and there are real opportunities in that model. I see it in the legal profession, explained below.

The technology has moved on beyond the copyright issues. The new frontier is not what AI is trained on. It is what AI can do on your behalf. I’ve written before about agentic AI: software that doesn’t just answer questions but takes actions, in the real world, on your instructions. Booking a reservation. Filing a form. Shopping for you. The Ninth Circuit heard oral arguments in Amazon v. Perplexity, and the case is the best possible illustration of where this is heading. It’s really fascinating and an example of that dynamism and churn that is so American.

The facts: Perplexity’s Comet browser agent logs into a user’s Amazon account, shops on their behalf, and completes purchases. Amazon sued under the Computer Fraud and Abuse Act (CFAA), a 1986 anti-hacking statute, arguing the access is unauthorized even when the user explicitly directed it. A district judge agreed and entered a preliminary injunction in March 2026; the Ninth Circuit stayed it pending appeal.

Perplexity’s counsel put it plainly: Amazon is stretching criminal hacking statutes simply because it wants its customers to access the site Amazon’s preferred way. The litigation frames this as an unauthorized access question. It is actually an advertising question. When Comet shops for a user, it bypasses sponsored products and goes straight to what the user asked for. Amazon generated over $68 billion in advertising revenue in 2025. Perplexity is not hacking Amazon. It is eating Amazon’s ad revenue.

Here is the more interesting frame: the future is AI talking to AI. Amazon’s advertisers should, in principle, be able to speak directly to Perplexity’s AI to make a match, and it would probably be a better and more targeted match than the current spray-and-pray model. An AI agent that knows exactly what you want is more valuable to an advertiser than a distracted human scrolling past a sponsored listing. This is a business model transition, not a computer crime. There is a commercial arrangement to be made here, and, as happens very often, the litigation is the negotiation.

There is so much AI-generated legal work crossing my desk now that I routinely use my own AI to read it. Recently, I received a nine-page document retention letter from opposing counsel on a minor slip-and-fall matter. Nine pages. AI-generated. It is just one example of how AI is commodifying the arithmetic of legal practice. Anyone with a decent prompt can produce a nine page letter, mainly filled with nonsense. And my AI can answer it with 10 pages of nonsense. AI talking to AI, as with Amazon and Preplexity, is probably the solution here. And it will come.

So we’re increasingly coming to a place where the value is not in the AI. It is in building a book of business. That has always been true. If anything, AI sharpens it, because the commodity work is now essentially free (or annoying) and what remains is the judgment, the relationship, and the trust.

Bringing it all back home, this is what American dynamism actually looks like up close. Not a parade. Not a rally (although it would be nice if someone could competently organize one). A country and an industry reinventing themselves in real time, creating problems and opportunities in equal measure, with no one in charge and no script - a lot like those Knick watches parties and street celebrations. I turn 49 this weekend. The best is yet to come for me, and America.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at YFGC.AI and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here, and follow me on LinkedIn here.

“Directionally correct” is what I tell a client when they have the right idea and no map to get there. Or, more often, when they are holding the map upside down. I have been seeing a lot of that lately, in our politics and in the technology du jour, which is AI. The instinct points the right way. The execution wanders into a ditch.

First, the Trump administration. Even where Trump has been directionally correct, the incompetence, the corruption, and the politicization get in the way. The map is upside down and also, somehow, still in the glove compartment (or your phone with Google Maps is powered off). I happen to think Tariffs are a good idea – directionally correct – but they were a disaster because of their randomness, the endless exemptions, and because Trump never bothered to build a case or get them through Congress. The immigration crackdown, which most Americans think is directionally correct, has been cruel and violent, with no real plan to bring anyone in except, for reasons I still cannot explain, a handful of white South Africans. Very few Americans think the war in Iran was directionally correct, but assuming it was, it has been a disaster in roughly every direction a war can be a disaster.

Which brings me to the new “Anti-Weaponization Fund.” Right idea. Upside-down map.

The impulse behind the fund is correct. People who are subjected to politically motivated government prosecutions should be compensated. I have written before about the hole in our law where that remedy ought to be. We have a statute, Section 1983, that lets you sue state officials who violate your constitutional rights. We have nothing equivalent for federal officials, because the Supreme Court keeps narrowing Bivens to the vanishing point (most recently in Goldey v. Fields last June). I laid all of this out in Fractionally Legal 53, in the context of the killing of Renee Goode by a federal agent who the administration insists has “absolute immunity.” So if you had told me the federal government wanted to build a real mechanism to make citizens whole when its own officers trample their rights, I would have been the first to cheer.

That is not what this is.

The $1.78 billion Anti-Weaponization Fund is blocked for the moment. Trump effectively settled a lawsuit with his own administration and then proposed to fund the payouts out of the federal Judgment Fund, which is unlawful precisely because the president sat on both sides of the table, as plaintiff and as head of the executive branch he was suing. You can’t make this stuff up.

And who is the fund for? Trump’s allies who claim they were targeted in the prior administration. Pressed on whether people convicted of assaulting police officers on January 6 could collect, Acting Attorney General Todd Blanche would not rule it out: anyone can apply if “they believe they were a victim of weaponization.” Sure.

If you actually wanted to compensate the victims of politicized prosecution, the first names on the list would be the people this Justice Department went after: Jim Comey and Letitia James, whose indictments were dismissed, and now E. Jean Carroll, and of course the immigrants detained in circumstances where a warrant was required and none was obtained. Instead the fund points the other way, at Biden-era grievances, which tells you it was never about the principle. It was about the payees.

Two structural problems doom it on top of the politics. First, it never went through Congress. Compare that to the one large government compensation fund I know intimately. It was actually a precedent that Trump’s people pointed to when setting up the new Anti-Weaponization Fund: the Black Farmers discrimination litigation. I know it well because I was counsel to an intervener in that long-running litigation. That settlement was funded because Congress appropriated the money through the Claims Resolution Act of 2010. It was court-supervised, it had a trustee, and it had real restrictions on who got paid and why.

Second, there is no attempt to help anyone outside Trump’s favored circle. A fund that only compensates one side’s political friends is not a remedy. It is a slush fund.

So here is my directionally-correct counter. Litigate better. If the goal is justice, give us a real cause of action against federal officers who violate constitutional rights, the federal analogue to Section 1983 that Congress has refused to pass and the Court refuses to invent. That would not be a politically motivated production. It would be a real solution. Right idea. This time, hold the map right side up.

Now to something else where we are directionally correct and still cannot read the map. We know AI can do legal work. I have written about this many times: I am all in on using AI to serve my clients faster and cheaper, and I do it every day. What almost nobody has figured out is the rest of it. What should we use it for, what should we keep it away from, and how does it fit with the way lawyers actually work?

I think there are three models at the moment. Two are directionally correct but hopelessly lost. One offers a real map.

Model 1: The consultants. This is Harvey, Legora, and the hundreds of thousands of “legal agents” the marketing decks promise. They are not practicing law. They are selling expensive software to the lawyers who do. Two problems. The first is cost: these are pricey, subscription-heavy products, and most of them are a solution hunting for a problem, Frankenstein’s monster looking for a soul. The second is the tell I keep coming back to: the lawyers with the most money to spend on these tools are the ones who need them least, because their clients will happily pay for human bodies. If your matter is a multi-billion-dollar deal or the trial of the century, money is no object and AI is barely relevant. You are better off, frankly, with high-priced humans, and that work is not going anywhere. Also, these tools run on LLMs that are wildly expensive to operate at scale, and the whole experiment is currently underwritten by investor money. When that subsidy ends, so does the math.

Model 2: The black box, also sold as the “neo” law firm. These are the platforms that try to route around the lawyer entirely. In my experience they are one of two things. Sometimes it is slick marketing by lawyers who are doing perfectly ordinary legal work and dressing it up as a robot for reasons I don’t really understand (it probably has something to do with raising money from outside investors, which is of questionable legality). Other times it is a genuine, longer effort to deprecate the lawyer out of the picture as the technology improves. Either way, the limitations are structural, not cosmetic. Only a licensed human can practice law. The AI cannot appear in court, cannot exercise judgment, and cannot be disciplined when it screws up. Which means until the lawyer really can be deprecated away, the black-box model is charging you for the AI and the lawyer. You are paying twice for a service sold as cheaper. This model may yet win, but it’s a long way off.

Model 3: The AI-augmented lawyer. This is where I live, and I think it is the right answer, at least until the economics and the responsibility question get sorted out. A licensed lawyer uses AI as a force multiplier. Faster drafting, better document review, quicker research. But the lawyer does the actual lawyering, which is judgment, and stays on the hook for it. I draft with AI constantly but no one is really paying me for the draft anyhow. I’m paid for solid legal work and advice that allows them to run their businesses better and mitigate risk.

I think fractional general counsel is the ideal expression of the augmented model, because the whole pitch of fractional GC work is faster and cheaper. The value of a GC was never the contract she drafts or the brief he files. It is the judgment about whether to draft the contract at all, and what it needs to say. That is the difference between a tactical lawyer and a strategic one. AI makes the tactics almost trivial which frees up the strategy, which is the part you are actually paying a GC for. AI handles the mechanics. The lawyer handles the judgment. The client gets a strategic advisor at a fraction of an in-house GC’s cost or a law firm, faster than traditional outside counsel. And I’ll still answers the phone when it matters.

That is the whole thesis behind YFGC.AI. I am not trying to be an AI law firm. I am trying to be a better lawyer. AI is how I get there. Right idea. And I’m holding the map right side up.

Keep thinking, keep building.

Jesse

Hi, and welcome to my newsletter. I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit.

Learn more at YFGC.AI and book a complimentary 30-minute consultation. You can also subscribe to my Substack and follow me on LinkedIn.

The legal world runs on two tracks. Litigators resolve disputes, in court or in arbitration or just by grinding the other side down until they quit. Transactional attorneys make deals, paper them, and move on. I started on the first track, and I was good at it. My approach was simple: keep the other side off balance, contest everything, and request sanctions against the other side early and often, mostly just to make opposing counsel’s life miserable. I once had a judge chide me for running up 250 docket entries in a case I was going to win anyway. I wore it as a badge of honor.

I still litigate. I am litigating right now. But somewhere along the way I realized that the knife fight, as a way of life, was not for me.

Two things pushed me out. The first was cost. Scorched-earth litigation works fine when your client is a Fortune 500 company treating legal fees as a line item, or when you’re on contingency and nobody sees a bill until you win. It does not work for the other ninety percent of clients, the ones watching every invoice and wondering if the fight is worth it.

The second was simpler: it wore me down. Hard-nosed litigation is a full-contact sport. Your clients are stressed, the courts are overloaded, and opposing counsel’s entire job is to make your life as difficult as you are making theirs. Some lawyers thrive in that environment indefinitely, and I have enormous respect for them, especially the ones doing impact litigation, who take the knife fight because the cause demands it and because they are built for it. That combination of skill and conviction is genuinely rare.

I am just not one of them. Living at that level of acrimony, day in and day out, was not sustainable for me. I was lucky enough to have the standing and the freedom to make a different call, and I am also lucky enough to not particularly care what anyone thinks about it. I walked away from the fight, built something that suits me better, and have not looked back. Knowing your own highest and best use is its own kind of skill, and not as common as you might think.

So I transitioned into transactional work, went in-house with a client, and eventually built Your Fractional General Counsel into what it is today: an AI-augmented practice that I think is the best model for where the legal market is going. The collaborative, diverse and business-minded nature of the work suits me. This week alone we closed a seed round for a terrific client in the food space and filed a brief in an appeal where we had already won most of the underlying motions to dismiss. Old soldiers never die. I know how to win a knife fight. I just prefer not to live in one.

Which brings me to the news this week, and two examples of that same failure, writ large.

I’ve written about the mid-decade redistricting war before. https://fractionallyyours.substack.com/p/drawing-lines The short version: Republicans came into this cycle with a clear, coordinated plan to redraw congressional maps in every state they control, with the express goal of locking in a House majority before the 2026 midterms. Democrats hemmed and hawed, then reluctantly joined the fight in the states where they hold legislative power. The Republican effort has been a well-oiled machine, save for a few stumbles in places like Indiana and South Carolina where Republican legislators, to their credit, declined to play. The Democratic effort has been, to put it charitably, a disaster.

Last week’s casualty: Virginia. Democrats spent nearly $100 million and shepherded a redistricting amendment through the legislature, put it to a public referendum, and won — narrowly, at 52-48, but a win is a win. Voters approved a new congressional map that would have shifted Virginia from a 6-5 Democratic lean to a 10-1 Democratic advantage. Then the Virginia Supreme Court threw the whole thing out, 4-3, on a procedural technicality that, in retrospect, was entirely avoidable. The legislature gave the amendment its first approval in October 2025 — after early voting for the 2025 state elections had already begun. Under Virginia’s constitution, a redistricting amendment requires an “intervening general election” between the legislature’s first and second approvals. No intervening election, no valid amendment. The court reinstated the 2021 maps. Four potential seats, gone. Whoops.

Scoreboard, as of this writing: Republicans 12, Democrats 5.

And how did Virginia Democrats respond? They announced plans to appeal to the United States Supreme Court. Good luck with that. This is the same court that, also this week, cleared the way for Alabama to dismantle one of its two majority-Black congressional districts, following its late-April ruling in Louisiana v. Callais — a 6-3 decision that rendered the Voting Rights Act’s protections against racial gerrymanders functionally dead. The court that just gutted the primary legal tool protecting Black voters in the Deep South is going to rescue a Democratic partisan gerrymander in Virginia? On what theory, exactly?

Here is what a knife fight actually looks like. Louisiana received the Callais ruling on April 29. Governor Jeff Landry halted the state’s May 16 congressional primaries the next day, called the legislature back into session, and ordered new maps drawn before the election proceeds. Stop the clock, redraw, restart. Legal? Contested, certainly. But there was no federal court telling him he couldn’t, and the question of who would enforce an injunction against a sitting governor moving fast was genuinely murky.

Virginia could do the same thing. The Virginia Supreme Court’s ruling is a state-law decision. Federal jurisdiction is not obvious. If Virginia Democrats pushed a new map through the legislature tomorrow, the question of whether SCOTUS even has jurisdiction over a state constitutional procedural dispute is a real one. And even if a federal court ultimately weighed in, the ensuing chaos over which representatives are seated in January would create exactly the kind of leverage Democrats need to negotiate. That is what the fight looks like. You move the ball down the field. You force the other side to burn resources stopping you. You create facts on the ground. You keep pushing until you get what you want.

Democrats do not want to fight that way. That is a problem.

Underlying all of this is a structural reality that no amount of legal maneuvering can fully address. The states baking in conservative control — including, increasingly, with a thin veneer of legalized racial disenfranchisement — are, by and large, the fastest-growing states in the country. Texas. Florida. Georgia. The Sun Belt. People are moving there in enormous numbers, in part because those states build housing. They have built enough supply to keep costs relatively manageable, which attracts workers and families and, yes, people who lean progressive but will vote for whoever is on the ballot in the place they can actually afford to live.

I have been writing about supply-side housing policy for a long time. The argument has not changed. The places losing population — New York, California, Massachusetts, Illinois — are losing it because they do not build. Not because their governance is unpopular, but because NIMBYism and restrictive zoning have made it economically impossible for the people who would support progressive governance to afford to stay. This is not an abstract policy preference. It is an existential political problem.

I take it for granted that in 10 years, the country is going to be gerrymandered beyond recognition and most states will have either fully Democratic or fully Republican U.S. House delegations. If Democrats are serious about majority rule, they need a genuine, aggressive housing supply campaign between now and 2030. Build enough units in blue-state metros to attract and retain the tens of millions of people who want to live in well-governed, tolerant, high-opportunity cities. That means killing price controls that reduce supply, and bulldozing the local veto power of the homeowners who benefit most from keeping supply artificially scarce. It is a game of numbers. The maps are being redrawn everywhere, and the only long-term answer to a bad map is more people.

Pick up a weapon. Fight.

Another example of the left just not fighting happened this week, closer to home.

The New York state budget finally passed — six weeks late, because Albany — and yes, it included some provisions around ICE cooperation, and yes, there were press conferences. What it did not include was the New York Civil Rights Act, which is now quietly dying in committee while the problems it was designed to solve get worse by the week.

The New York Civil Rights Act is smart legislation that fills a real legal need. Right now, if a state trooper violates your constitutional rights, you can sue him under 42 U.S.C. § 1983. That statute has been on the books since 1871. It works. But § 1983 does not reach federal officials like ICE officers because it only waives the sovereign immunity of state officials (not federal officials). There was a work around, the so-called Bivens action that waives sovereign immunity for federal officials when they violate the constitution, but the Supreme Court has spent the last several years systematically dismantling it to the point where it’s almost impossible to win a Bivens action and hold Federal officials responsible for constitutional violations . The practical result is that an ICE agent can kick in your door, violate your Fourth Amendment rights, and walk away without any civil exposure whatsoever. The federal courthouse door is closed. SCOTUS closed it, deliberately and repeatedly.

The New York Civil Rights act is a straightforward solution: amend New York’s civil rights law to create a state-court cause of action against any official — federal, state, or local — who violates your constitutional rights under color of law. Damages, injunctive relief, attorney’s fees. The Westfall Act, a federal statute, explicitly carves constitutional violation claims out of the Federal Tort Claims Act’s exclusive remedy provision. In other words, Congress already left the door open for exactly this kind of state law. The theory is not exotic. The need is not debatable. The bill is sitting in committee.

I want to be precise about something, because the distinction matters to me as a lawyer. Resolutions condemning ICE are not law. Press conferences at 26 Federal Plaza are not law. A statute that gives a New Yorker the right to take a federal agent to state court and recover damages for violating the Constitution is law. One of those things actually costs the other side something. Why we don’t have the guts to pass it, I don’t understand.

No shortage of good ideas. No shortage of good lawyers or good-faith people. The Virginia map argument was legally defensible. The New York Civil Rights Act is genuinely excellent legislation. The supply-side housing case is correct and politically viable. Analysis is not the problem.

The willingness to use the tools is.

Politics is litigation. Adversarial by design. There is a place for consensus, but you negotiate from a position of strength, and strength requires that your opponent believes you will cost them something. Republicans have built that credibility. They stop elections, redraw maps mid-decade, pack courts, and hold the debt ceiling hostage. They are not confused about what game they are playing.

Most Democrats seem genuinely reluctant to play it. I understand the reluctance. I walked away from the knife fight myself. But I had the luxury of doing that. Liberal democracy does not.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

I hope everyone is not too riveted by the Elon Musk v. OpenAI trial, which by all accounts has become a referendum on Musk’s altruism. Strikes me as an imperfect strategy, but no one asked my opinion. I’m sure there were other ways to frame the case. Musk wanted it done this way, which probably hobbled his lawyers considerably. It happens. Clients sometimes make decisions based on business logic rather than legal soundness, and lawyers have to work with what the client decides.

It’s a pity, because I find myself rooting for Elon on the underlying point: someone should be developing AI for the benefit of humanity and not purely for profit. The folks at OpenAI would say they’re thinking the same thing, but also: why us, specifically? Fair question, awkward lawsuit.

Either way, as I see it, it’s part of the circus. Or, as I’ll explain below, the circuits.

I spent a week in April in Sicily, tagging along on my girlfriend’s work trip. She was producing a brand campaign, the kind of work that involves getting beautiful people to do interesting things in extremely scenic places. In contrast, practicing law typically involves getting opinionated people to agree on extremely dull legalese in a generically-appointed conference room, so suffice to say, I was out of my element.

The talent on set were “Key Opinion Leaders” (KOLs, in industry parlance) and “Content Creators,” both of which are the more flattering, recently-rebranded names for what most of us still call influencers. My clients actually hire influencers from time to time, so I know a little about the law. The primary legal issue is disclosure: the FTC requires that any material connection between a creator and the brand being promoted (payment, free product, a sweetheart deal) be disclosed clearly and conspicuously, on every platform, in every post. Liability runs to the brand, not just the creator, which is actually clarifying, because most of the influencers are non-U.S. persons and therefore there are tricky jurisdictional issues.

For obvious reasons, I was not allowed anywhere near the influencers. So I busied myself learning a little Sicilian history, which is fascinating in its own right and, as it turns out, has some useful lessons for the present. Sicily existed in a quasi-feudal state until well into the twentieth century. The landowners, descendants of Norman nobles who arrived with the French from Normandy and later the Spanish, controlled most of the territory. The locals were tenant farmers. The Mafia, in its original form, were essentially the enforcement arm of that system: the gangs that kept the tenants in line. It is not difficult to understand, against that backdrop, why millions of Sicilians immigrated to America. They were trading a system defined by concentrated power, enforced by violence, and operated entirely without the consent of the governed, for one that, at least in theory, worked the other way around. Those immigrants brought with them a deep distrust of concentrated power and a corresponding attachment to the rule of law.

The historical irony is that Italian nationalism, though thoroughly fascist in character (fascism is, after all, an Italian word,) wanted to dismantle that old feudal model and build a modern state. Mussolini, in pursuit of that project, took on the Mafia. So when the Allies landed in Sicily in 1943, the Mafia was not only a willing collaborator, it was a battle-tested opponent of the regime the Allies were there to dismantle. Years of corruption and entanglement followed. The lesson Sicily drew from that experience is one it has not forgotten: be very skeptical of any outsider arriving with promises of liberation.

That history is relevant because when I was there, everyone in Sicily was gearing up for il venticinque aprile, Italy’s Liberation Day, the Festa della Liberazione. It commemorates the 1945 partisan insurrection that liberated Milan, Turin, and Genoa before Allied troops arrived. Over time, the holiday has evolved into an annual occasion to take stock of the politics of the present. This year, very cool-looking students were going around hanging posters bearing two phrases: No alla guerra. Contro il carovita. No war. Affordability. Blunt and accurate.

The Roman poet Juvenal called it panem et circenses: bread and circuses. The formula was simple: keep the population fed and entertained and they won’t notice what’s being done to them. The bread and the circus worked together, both provided by the same ruler, serving the same purpose.

Those students thought the war was the circus. How Roman of them. It isn’t. The circus today is AI: real, consequential, and extraordinarily good at consuming capital and attention. But here is where the ancient formula breaks down. Juvenal’s circus was provided alongside bread. This circus competes directly with the bread. Every hundred billion dollars flowing into AI infrastructure is a hundred billion dollars not building housing, not expanding healthcare capacity, not investing in the physical conditions of American life. The ruler is not providing both anymore. The circus is crowding out the bread.

And it goes further than that. This is not just a competition for capital. AI is the technology that promises to replace labor while absorbing the capital that could make labor more valuable. It doesn’t just entertain us. It devalues the work most people do while making the people who own it extraordinarily wealthy. The circus, in other words, is also eating the wages. That is a very old story with a new costume, and it is making the bread a lot harder to find.

No alla guerra and contro il carovita are not two separate demands: they are the same demand. But the enemy is not the military-industrial complex. It is a capital allocation problem dressed up as progress.

AI masks the underlying weakness in the economy. It is the illusion of growth, prosperity, and progress while everything else is getting harder. Affordability, which is really code for “everything costs more except what people pay me for my labor,” is directly linked to our collective fascination with AI. The same capital that could be building housing, infrastructure, and healthcare capacity is instead building agents that watch other agents. That is not a coincidence. It is a choice, made over and over again, by investors, politicians, and policymakers who have decided that digital infrastructure is worth subsidizing and physical infrastructure is not.

The contrast is stark. As I wrote after attending the Human[X] conference in April, the AI industry is awash in capital: investors are subsidizing your access to powerful tools, there is far more supply than demand, and if you are shopping for AI solutions, you have the leverage. We have collectively decided that building digital infrastructure is worth subsidizing heavily, even if most of it never produces a return. Housing operates on the exact opposite logic: severe shortage, straightforward supply-side fixes, demonstrated political inability to implement any of them. AI is abundant, subsidized, and celebrated. Housing is scarce, undersupplied, and politically neglected.

And the response to that neglect is, to put it plainly, astounding. There is an executive order to make the United States a global leader in AI. There is no executive order to make the United States a global leader in housing production, healthcare capacity, or any other physical thing that people actually need to live. Instead, the closest thing we have to a housing policy is a recent executive order barring institutional investors from buying single-family homes. It sounds populist. It is bad policy. Rents are high because supply is constrained: we are not building enough housing. Barring institutional buyers does nothing to add supply. In fact, it makes the problem worse by draining investment from residential real estate without replacing it with anything. And Trump can’t even get his story straight on the goal: he is on record saying he wants home prices to go up, not down. That is not a misstatement. That is the policy. A Congress that could be addressing zoning reform and construction financing is instead absorbed in voter suppression legislation. An administration that has shown no hesitation using invented powers to advance its agenda, go to war, impose tariffs, deploy the National Guard to American cities, dismantling federal agencies, somehow cannot find the political will to do the one thing that would actually help: build more housing.

The Sicilian students had it right, even if they had the wrong circus. Juvenal understood it two thousand years ago. The formula hasn’t changed. What has changed is the sophistication of the circus: AI is not just entertainment, it is a multi-hundred-billion-dollar bet that digital infrastructure matters more than physical infrastructure, being ratified by public policy every single day that Congress fails to act on housing and by every executive order that prioritizes AI dominance over human affordability.

The bread is not coming. Not from this administration, not from this Congress. And the circus, for all its spectacle, is not a substitute.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

I spent the better part of last week in San Francisco visiting clients and attending Human[X], a huge AI conference where about 6,500 people spent 3 days fetishizing AI. I assume most participants have real jobs that either require them to be there to sell stuff or, like me, have real jobs that don’t (yet) involve thinking about AI all day and so were ducking in and out of the conference between actual work. However, as the conference demonstrated, the line between actual real work and AI is blurring. There is a good chance that in a few years you’re either going to have figured out a way to make AI work for you, or you’re going to be replaced by AI that does your work.

As I’ve written about many times before, I have a fundamental belief that AI is going to allow me to serve my clients faster and cheaper, so I am “all in” on deploying AI responsibly across my practice. Granted, I’m in a unique space as a fractional general counsel where I’m juggling lots of cash flow sensitive clients and they all want quality legal work, fast. In a nutshell, that is what I do. As I’ve written about before, if you have a multi-billion dollar deal where money is no object or you’re handling the trial of the century, AI is much less impactful. Clients are going to spend the money to throw human bodies at the problem. Same issue with the government: it has all the money and lots of humans to throw at any legal problem (I just paid my taxes, so I know about the money part!). If anything, for those clients, legal AI is actually going to make the work product worse, not better.

With that framing in mind, I went to Human[X] to hear from some of the brightest (or most enthusiastic) minds in AI. I have a few takeaways, especially for any lawyer who wonders what AI is going to do to your practice.

First, it’s important to note that there were a lot more sellers than buyers of AI products at the moment. That is the result of the frothy investment atmosphere. So if you’re looking for AI solutions for your law firm, you have the leverage. Side note: I bemoan the fact that we can’t seem to find the resources to build out physical environments (hence the high cost of healthcare and housing). But we certainly have ample resources to build new digital tools, most of which won’t go anywhere. That is why we can’t have nice things. We don’t invest in them.

Second is the current direction of the AI industry. The buzz in the real world is all about AGI: Artificial General Intelligence. But that is not what was being discussed at Human[X]. At Human[X] it was all about the “agents.” So let’s talk about the agents.

Agents are those little bits of code that can actually do things. AI powered agents are “agentic AI.” There are companies building “secure agents,” “fast agents,” “enterprise grade agents,” “efficient agents,” agents that monitor other agents. The product is essentially using AI to write code that actually accomplishes a task, and is smart enough to work autonomously — set the goal and it will figure out how to do it. AI can write code so fast that the agents can adapt and evolve, and then you need the agents to watch them. Apparently, building agents to watch agents is as important as building the agents themselves, which begs the question of how many agents are enough agents. Seems like the ultimate tautology and we really don’t know.

In the legal space, which I’m most interested in, there are companies that build agents to accomplish legal tasks — hundreds of thousands of them if the marketing is to be believed. Alas, the two big companies building agents, Harvey and Legora, were not actually at the AI conference. That’s probably because the market for specialized legal agents is smaller than one might think. The lawyers with the most money to buy agents probably need them the least because their clients will pay for human labor. Smaller practices like mine can really benefit, but the use cases are more limited than most people realize. I’m finding bottlenecks in my practice and building agents to solve them. Building the agents is not hard (if I can do it, anyone can). Identifying the use case is.

For example, with a few exceptions, I’d never build an agent that automatically responds to emails for me with AI-generated responses. Draft, yes (already have that) but I review everything before it goes out. Any time saved with an agent that sends emails autonomously would get eaten up trying to walk back a poorly worded email. Ditto with an agent that redlines and sends back a contract to a counterparty without my review. Most of the time, I’ll just send what the AI creates. But catching that one-in-a-hundred error will save me dozens of hours I’d otherwise spend trying to unwind the mistake. And remember, legal AI still has the fundamental problem of hallucinations. AI likes to make things up. I do my own research, make sure I have all the salient facts (AI helps me review documents to get the facts right), and turn the results over to AI to draft with specific instructions to only use the materials provided.

The most interesting AI I ran into at Human[X] was by https://samu.live which validates all the inputs to, basically, allows you to always go back to the source of any “fact” cited by the AI. Adopting some type of protocol like that would be a huge unlock for the use of AI in court proceedings. Wonky, but it’s that type of tech we need if we’re going to deploy legal AI at scale. Otherwise, we’re just building agents to prevent hallucinations, which seems like a big waste because we can’t really control the agents without building other agents. And so on. Think of autonomous agents as the rabid white whale of the legal AI industry.

And that leads to the third point: there is a lot of blind optimism and we’re still in the “gee whiz” phase of AI, especially AI for legal services. First, everyone assumes that there will be cheap LLMs and the energy infrastructure to support all these agents in the future. There was not a lot of recognition that there is a bubble, and all the experimentation is currently underwritten by generous investor dollars. Without that, most of this experimentation economy would just become too expensive to operate because developing and operating an LLM at scale is really, really expensive. Case in point: OpenClaw, an open source protocol that can use any LLM you want, even one stored locally on your laptop that you downloaded from China for free, was all the rage. It seemed like a tacit admission that once the price of running the LLMs goes up, the world changes.

The blind optimism is pervasive, and infectious. Very little was about the downside risk of turning too much over to agents. There was almost no talk of government regulation, as if the industry would regulate itself. The closest thing to a government official was Al Gore (yes, he is still alive and really vibrant) and even he was talking about whether we need to recognize AI consciousness as tantamount to human consciousness. It was interesting but, oh brother.

But the threat is real. Case in point: Anthropic just released a new model called Mythos that can identify and exploit zero-day vulnerabilities in every major operating system and web browser — fully autonomously, with no human involvement after the initial request. Anthropic’s response was to restrict access to roughly 50 vetted cybersecurity partners through a program called Project Glasswing, giving defenders a head start before broader release. No law required this. No regulator compelled it. Simply releasing Mythos into the world would not have been a crime — but it would have been negligent. Anthropic just decided it was the right thing to do. That’s admirable — but it’s not a governance model. Would Musk have made the same call? North Korea?

At Human[X], everyone assumed there’s some architecture that can keep agents in check. That’s a big assumption. This is not a safety-focused industry. And if this technology is as powerful as its promoters claim, we need serious regulation — now, not after the first catastrophic breach.

In the meantime, I’m going to keep doing what I do: use AI to serve my clients better, faster, and cheaper, without pretending the risks don’t exist.

If you want to see what that looks like in practice, check out www.lawyerloop.ai, where you can find independent lawyers use AI to deliver legal services at a price that actually makes sense. And in the coming weeks, I’ll be overhauling www.yourfractionalgc.com so you can better understand what a Fractional General Counsel can do for your business. I’m not trying to be an AI law firm. I’m trying to be a better lawyer. AI is how I get there.

Ticketmaster

Iran is bad, but the Ticketmaster verdict is a reminder that Trump and his sycophants are really bad at what they do. I’ve written about Ticketmaster a few times before — as an avid live music fan and repeated victim of their high fees and crappy technology I have a special ax to grind.

Even though the states won the trial and showed that Ticketmaster was an illegal monopoly and used that market power to harm consumers, we actually don’t know what the remedy will be. As is common in antitrust, there is a liability trial and a remedy trial. For reasons that probably have to do with a Palm Beach cocktail party and incompetence, the Trump DOJ essentially gave up and settled with Ticketmaster before the jury verdict, which means that they got a much worse deal than they would have gotten had they taken the case to verdict and gone through the remedy phase. The DOJ dropped its case in exchange for $280 million — paltry — and an agreement that the amphitheaters it owns can use other ticketing software and a sale of 13 of its venues. The states are pushing for a full breakup of the company.

The states are right. The real issue is the deals that lock in venues to use Ticketmaster, whether owned by Live Nation or not. Why would a venue not owned by Ticketmaster agree to use its crappy ticketing system and charge the high fees? Because if they don’t, acts managed by Live Nation, the country’s largest promoter, are going to venues that have deals with Ticketmaster or are owned by Live Nation. It’s all pretty simple. And because there is such a limited market for alternative software, no one builds one. Imagine spending the time and energy to build a better ticketing system when you have no customers. So Ticketmaster is the only game in town and charges exorbitant fees for a crappy ticketing product. It’s called market manipulation and it costs me and every consumer of live music lots of money in fees and lots of brain damage. I’m happy a jury understood that, even if Trump’s DOJ can’t, or won’t.

Keep thinking, keep building,

Jesse

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

I’ve been playing around with Claude Code, building cool things to help me serve my clients faster and cheaper. For example, vibe coding the long delayed Lawyer Loop AI to solve my own pain point of finding inexpensive lawyers in jurisdictions I don’t practice to help my fractional general counsel clients with jurisdiction-specific legal needs. Traditional search, especially the specialized pay-to-play legal vertical search, always sucked at that. Excuse LawyerLoop.ai, it’s a work in progress but we will get there.

Claude Code is an amazing unlock. The bottleneck is no longer technical — even I can build a rudimentary app that actually does something. You need to have a little technical knowledge, but Claude makes the decisions about tooling for you and then writes the code that ties those tools together to make the app actually useful. These are tasks that we used to hire developers to do. I feel for those developers because the same AI that is “disrupting” (in tech speak) the market for coders and developers is also working hard to give people quality legal work without the need for lawyers (to mixed results https://www.reuters.com/legal/legalindustry/openai-hit-with-lawsuit-claiming-chatgpt-acted-an-unlicensed-lawyer-2026-03-05/). As we say in the law: the jury is still out on whether AI can eliminate most human lawyers. But it’s certainly done it for the type of developers — mainly non-U.S. based — that used to do this type of work.

But let’s not over-hype the tech: Claude Code is really empowering, technically. But all this tech is pointless if you don’t actually know what you want to build and why it should exist. What problem are you trying to solve, and why? And how does it do something real human beings actually need to make their lives better? And while the tech is undoubtedly powerful, there are limitations to the techno-determinist viewpoint of how AI is going to change everything. The recent news from the tech world and beyond illustrates how important it is to stay human in the AI era.

It’s not a problem central to tech. It’s the same issue we see in something as seemingly different as the war in Iran. Yes, the U.S. has the technology to dominate the battlefield and destroy all of Iran’s civilian infrastructure, causing a huge amount of pain for our enemies as our toddler-in-chief is always threatening. And that could be a goal in and of itself. But it’s pretty vapid and it’s certainly not the stated goal of this war. We have the how (the tech) but no clear way forward, and we never braced for the non-technical impacts, or “user experience” as my friends in tech might say. Like high gas prices. That’s a huge, non-technical problem.

Apply the same framework to the recent jury verdicts against social media companies in the addiction cases. Google and Meta got the almost laughable damage award of $3,000,000 for ruining the life of a teen by poisoning her on social media. It’s not a $3,000,000 award but, rather, a $3,000,000,000 award because it means that the 1,000 other cases against these companies also have merit. These are not class actions, so each needs to be tried separately — a huge cost to the plaintiffs and the companies. But even if this ordeal costs $3 billion over the next 10 years, it’s still a pittance for these companies. However, if you’re thinking about starting a new social media company — as some of my clients are (and one of these breaks through every 10 years, the last one being TikTok) — you need to think about what it means to addict someone, and how to design around that, because you won’t be able to deal with the attorney fees for even one of these addiction cases, let alone the cost to settle a case that has actual value now. Yes, you can build an addictive social media app using AI faster and cheaper than you could a year ago. But you need to remember the humans involved, because human juries will hold you responsible for harming actual humans.

As I’ve written about in the past, AI companies are helping themselves to content created by actual humans to train their models to produce content that actually seems like it’s created by humans. It’s a pretty funny, and legally fraught, way to build your product, but presumably no one figured out a better way to do it. And the result is that basically every human (or company) who owns the means to produce actual, human-generated content is suing. Or reaching settlements. And I don’t doubt that we will see billions of dollars flow from the big AI companies to the content owners over the next 10 years. But the problem is actually more profound than that: as I’ve written about in the past, the AI companies are not merely the publishers of the content, they are the creators — albeit by pilfering human content. https://fractionallyyours.substack.com/i/142547938/how-not-to-train-your-ai-on-other-peoples-copyrighted-content So even if they have the use of the content, they need to make sure that what they create is not harming anyone. Again, anyone can create anything, but AI companies need to be aware that when their creations hurt actual humans, they are responsible. And I predict that, unlike with social media, it won’t take 20 years to reach that inevitable conclusion. There are already multiple cases of actual humans who have been harmed by AI. The way things are going, these are eventually going to lead to jury verdicts against the AI companies. But for my aversion to personal injury matters, I’d certainly take those cases.

As I experience almost every day with my AI-centric clients and my own work with lawyerloop.ai, in the AI era, building tech, writing code, making movies, and so much more is getting commodified — anyone can do it. In that environment, creativity, human empathy, and managing risk are now the coin of the realm. I feel strongly that the winners in the next decade are going to be companies who think creatively about what humans actually need and design products that enhance human lives and their industries, rather than denigrate humans and try to impose new, somewhat pointless tech solutions on people who don’t actually need them — unfortunately, the latter seems to be the direction of so many AI products today. Stated another way, the more powerful the technology, the more creativity, empathy, and smart risk management take center stage.

Next week I’m headed to Human[X] h in San Francisco to help think through some of these ideas. I’m not there to figure out how to build cool AI tools that can “practice law” and put lawyers out of business. I’m there to think about creative ways to use AI to serve my clients faster and cheaper, because that is what the world needs.

Keep thinking, keep building, Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Recently, I switched from OpenAI’s ChatGPT to Anthropic’s Claude as my chatbot-of-choice. I made the switch when OpenAI seemed to capitulate to the “Department of War’s” demands that they be able to use OpenAI’s artificial intelligence products for, potentially, autonomous targeting and to spy on Americans. Anthropic, on the other hand, took the principled approach of refusing, and is risking the wrath of Trump and his sycophants.

We all know how dangerous and creepy “domestic surveillance” (a.k.a. “Spying on Americans”) is, but the idea of an AI that can select human targets and activate human-killing machines without human intervention is downright terrifying. My understanding is that we’re not anywhere near that yet, but Anthropic is correct not to sell this technology to the U.S. government (or hopefully any government) or any corporation with the capacity to build those autonomous human-killing machines’ hardware.

I’m proud of my choice and support Anthropic. It has been said so many times but it’s always worth saying again: the apparatus of authoritarianism is not one big well-oiled machine — it’s millions of small acts of compliance and complicity, sometimes for profit, other times just to be “left alone.” Also, the stakes are pretty high here. If the Federal Government, or any government or company, actually wants to create an autonomous human-killing machine, none of us should be on the sidelines even if we’re absolutely sure those machines are only going to autonomously kill humans we don’t like. It never works out that way.

I probably never would have tried Claude but for OpenAI’s obsequiousness . For my needs, which are mainly reading long documents, statutes, cases, and drafting clauses based on existing templates, with a smattering of demand letters and some light “lawyer math” on cap tables and the like, ChatGPT and Claude are about the same, although based on one or two bot-to-bot competitions, Claude actually did a little better.

I’ve said this a few times before, but AI and the law are like peanut butter and jelly: they just go well together. That’s because the legal product is words that form clauses that form contracts, and words that form arguments. The weird problem, ironically, is that Claude is much wordier than ChatGPT. That is probably by design: Claude is mimicking what it thinks I want, which is long wordy narratives based on the templates (”training data”) I’ve provided. It was also trained on tons of legal documents which, in my experience, are often much wordier than they need to be. That’s a little annoying because I’m trying to use these chatbots to provide faster, cheaper legal services — getting lengthy responses, which I then need to digest using the AI products, sort of defeats the purpose. I actually hear this critique from a few actual legal practitioners: AI saves time, but also increases the amount of nonsense that lawyers need to wade through, or use AI to wade through, which reduces the efficiency. But it’s still a lot quicker to draft an agreement or a brief with AI than without.

OpenAI’s capitulation, and Anthropic’s refusal to do so, raise some other serious issues. First, Anthropic’s principled stance actually hastens what many observers already think is coming. Either the government owns or has access to the best AI products or it (1) builds its own, (2) buys an AI company, or simply takes the technology when it can’t buy it way in. Is that coming? Possibly.

Granted, the current U.S. government seems incapable of developing its own AI: Even if they could match the compensation provided to the top AI researchers, who would ever want to work for an administration this mendacious and capricious? Perhaps in the future we will get leadership actually capable of developing a huge, new AI program similar to the Manhattan Project. But I’m not holding my breath.

The second approach is more legally interesting: nationalization of the private companies building AI. There are two approaches here. First, the U.S. could make a deal with the owners of OpenAI or Anthropic (or both) to buy all the shares for hundreds of billions of dollars. One or the other of those companies would more than likely sell under investor pressure (it would likely be a breach of fiduciary duty for them to refuse so much money on political grounds). But that, again, runs into the same problem as the government developing its own AI. Most of the talent might just leave if the company is wholly owned by a government to a company which is not wholly owned by the government. There are other variations on this, like the government buying a small part of the company with outsized control rights. That is the model that was used in the government’s deal with Intel, where it now owns 10% of the company. It’s unclear if the government got control there. In contrast, there is the deal with U.S. Steel (now owned by Nippon Steel) where the government did not get any equity, but got a Chinese-style “golden share” which gives it control over some company decisions (like closing steel plants, I assume).

U.S. Steel and Intel were in trouble, and their boards were pretty eager to take the deal. That’s not true of any AI company worth buying: these AI companies are thriving, and the ones that are not thriving are really not worth controlling (xAI’s Grok, anyone?).

Which is to say that the U.S. government is probably not buying an AI company, or investing in one, any time soon. The solution then is more radical: nationalization. In other words, the government just takes the company without compensating the shareholders. We see that all the time all over the world, but rarely in the U.S.

In the U.S., nationalization has some legal issues. The last president to try it, Truman, got stopped by the Supreme Court. See Youngstown Sheet & Tube Co. v. Sawyer. Youngstown actually limits presidential power when there is no explicit authorization from Congress, which was necessary to seize the steel mills because nothing in the Constitution gives the President the power to seize private property even in the time of war. Congress, on the other hand, likely has that power under the Fifth Amendment’s Takings Clause, provided Congress gives “just compensation.” So in a situation where the Federal government wants to take an AI company (and Congress goes along with it), it can. It just needs to come up with the hundreds of billions of dollars needed to compensate the shareholders of the A.I. company. Despite all the handwringing, nationalization of AI is possible, but unlikely. Also, one might doubt its effectiveness. While steel production has a physical site, and you can’t easily move steel across the world, that is not true for the bits that make up AI. So even if the government owned the means of production in the U.S., there could be lots of A.I. in the wild, beyond the reach of the U.S. government but impacting America none-the-less.

What’s pretty amazing about the current debate is that no one in Trump’s government is even thinking about any of these options (at least not in a coherent and public-facing manner). There are actually good reasons for the Federal Government to be talking about how powerful A.I. is and that if the companies won’t agree to common-sense regulation or work with the government (on something other than autonomous human killing machines, one hopes), then more radical solutions are needed. But that is not the debate at the moment. Instead, in a fit of political retribution for showing spine, Trump’s people labeled Anthropic a “supply chain risk” and were busy ripping Anthropic’s products out of the Federal government. That of course matches the Trump modus operandi. Instead of interesting solutions, it’s just demanding loyalty and being vindictive, even where it just hurts himself (and the American people, by extension). And now, cue the lawyers, we’re in a lawsuit with the really fun name of “Anthropic v. U.S. Department of War.” That is what passes for A.I. regulations these days.

And we are in desperate need of regulation. Putting aside the human-killing machine problem from above, we’re getting a flurry of cases where A.I. has caused real-world harm. There are cases where the AI is alleged to have encouraged people to kill themselves, for example. Those lawsuits are tragic, but they are personal injury cases and, while certainly the negligence of the product design (whether the chatbot was negligently designed) is an issue, the more difficult questions are those of causation: did the AI cause the harm, or was this person already going to hurt themselves? Same idea with the social media addiction cases, currently on trial in Los Angeles where a verdict is due imminently. The question in those cases is one of design, but the companies are more likely to limit their liability on the issue of causation. Having done some personal injury work in the past (I rarely do it anymore), issues of personal responsibility are catnip for an American jury. We love to blame the victim, and lawyers love to play to those arguments.

No, these are more interesting because they involve the AI chatbots being used as advertised and causing injury to a third party. That’s not a tort theory as much as a product design issue — the person using the chatbot got exactly what they wanted, and the AI company advertised what it could do, but it harmed someone. The most interesting from a legal perspective is Nippon Life Insurance Company of America v. OpenAI. It’s the first case I’ve seen with a viable product design defect theory. OpenAI is very proud that ChatGPT can pass the bar and made sure everyone knew it. They basically said that their chatbot knows as much about the law as your lawyer (that might true sometimes, but not most of the time). So a plaintiff decided to fire her lawyers and challenge a settlement she had already signed, generating legally dubious arguments and dozens of filings the complaint says served “no legitimate legal or procedural purpose.” The user wasn’t harmed — the insurer who had to deal with all that paper was — and that distinction matters. A product used as intended that injures a third party is a design defect claim. Certainly it was not the insurer/plaintiff’s fault — they thought they had settled the case, only to be confronted with AI that told the plaintiff they had the chance to undo the settlement. Oops.

The lesson has implications well beyond the law. The through-line of this newsletter — from the autonomous weapons debate, to nationalization, to Nippon Life — is the same: AI companies are building extraordinarily powerful systems with remarkably little thought about what happens when those systems interact with governments, courts, or third parties who never consented to be part of the experiment. Anthropic deserves credit for thinking seriously about at least one of those problems. The rest of the industry, and frankly the government, has not caught up.

Regulation may come — I hope we don’t repeat the mistake of social media which we let grow unchecked. A.I. is different. The downside, even about 3 years into the A.I. era, are too large to ignore. The question is whether it arrives through thoughtful legislation, through the slow accumulation of civil verdicts that make certain design choices too expensive to defend, or through something more blunt, like the nationalization scenarios I’ve described above. Right now, we’re getting mostly the middle option: courts filling the vacuum that legislatures have left. That is not a terrible outcome for lawyers. It is a terrible outcome for everyone else.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

No, I didn’t quit.

Actually, we just closed the books for 2025, and revenue from the fractional general counsel practice increased about 20% YoY, even in the age of AI. Granted, it’s still early innings—our second full year—but I’m bullish. Why? Small firms and solos are using AI to produce solid legal work at a price their clients can afford. Whether AI-native law firms can provide quality work at even lower prices with fewer lawyers and more tech - and who can own those firms - is an open question.

Changing the topic . . .

As our epic winter of 2025–2026 winds down, hopefully, change is in the air. Regime change in Iran, maybe. I’m actually astounded at the amount of ink that has been spilled debating whether Trump’s Iran war is “legal” or not. The legality or illegality of Trump’s actions misses the point. The Constitution is pretty explicit that only Congress can declare war (Article I, Section 8, Clause 11), but the Constitution also says that the President is the Commander in Chief. Back in the day, there was a hoopla around “declaring war.” But the U.S. has not “declared war” since World War II. Since 1973, the making of war has been governed by the War Powers Resolution (not a law), which provides that the “President, as Commander in Chief, may introduce United States Armed Forces into hostilities, or into situations where imminent involvement in hostilities is clearly indicated by the circumstances, only pursuant to (1) a declaration of war, (2) specific statutory authorization, or (3) a national emergency created by attack upon the United States, its territories or possessions, or its armed forces.”

The War Powers Resolution was vetoed by President Nixon, and that veto was overridden by Congress. It was really dumb of Nixon to veto it. He should have loved it because it basically gave the President two additional ways to use the Armed Forces short of a congressional declaration of war. After the War Powers Resolution, other presidents—most notably the Bushes—made an art of getting Congress to provide specific statutory authorizations for their military actions. I remember the hoopla around Operation Desert Storm and the second Gulf War—the Bushes were able to create a patriotic narrative that led the country into a military conflict.. This was all legal, since all the Bushes needed to engage in two wars in Iraq and a 20-year (!) war in Afghanistan was one congressional authorization, each. It was all sort of fun, in a craven way. And opposition to the hoopla built a lot of political careers on the left. Bucking the patriotic narrative about showing off America’s military might was a very principled thing to do

Trump’s war in Iran is just craven, and not fun. He never attempted to build a consensus, be a leader, or sell his war. There are actually good reasons for attacking Iran: securing Israel, constraining the supply of oil to China, making Europe more dependent on U.S. oil, and stopping Iran from arming Russia. The War Powers Resolution gave Trump a way to build the case for a congressional authorization to attack Iran, and his Republican Congress is pliable enough to provide it. But, like most things when it comes to governing, Trump blew it.

In fact, the congressional debate is not about whether to authorize the Iran war. It’s about whether to require Trump to come to Congress for authorization. Congress voted not to require a resolution authorizing the war—yes, we’re sort of in the Upside Down now.

Ironically, now that there has been an attack upon the U.S. armed forces by Iran, the War Powers Resolution arguably does not matter, because Trump can use the armed forces once the armed forces have been attacked. Academics, God bless them, can probably debate this legal tautology for hours. But the fact remains that Trump is going to prosecute his semi-legal war whether we like it or not. My profound hope is that this war leads to not one, but two, regimes falling. It might: both the mullahs who rule Iran and the MAGAs who rule America are as politically weak as we’ve ever seen them, and this unpopular war, which was never sold to the American people, could topple one, or both. I’m giddy for either.

Trump may be able to prosecute his war in Iran, but that’s about all he can prosecute. In fact, it’s very possible that he never bothered to build a consensus to get Congress to authorize the war because, despite playing with marked cards, he can’t even get a high card (sorry, I was in Las Vegas last week).

Other than having the Department of Justice do nothing—the equivalent of quiet quitting—most things he has tried to have the Justice Department do, like prosecute his political enemies, have been abject failures. Both the case against former FBI Director Comey and the case against New York State Attorney General Letitia James have been dismissed. But the dysfunction goes beyond that.

The way Trump’s DOJ is handling the Epstein files is downright malpractice. They not only botched the disclosure—redacting the names of perpetrators but not victims, for example, and simply withholding incriminating documents about Trump, only to release them after appearing as suspicious as possible—but they are not actually investigating any of the allegations.

This is incredibly stupid. Under 18 U.S.C. § 3283, “No statute of limitations that would otherwise preclude prosecution for an offense involving the sexual or physical abuse, or kidnaping, of a child under the age of 18 years shall preclude such prosecution during the life of the child, or for ten years after the offense, whichever is longer.” That means, essentially, that there is no statute of limitations on the Epstein crimes.

It would have made a lot more sense, both politically and legally, for Trump’s DOJ to undertake investigations and prosecutions of everyone in the Epstein files who apparently committed a crime. They could then give them sweetheart plea deals. That would have solved two problems at once: defusing the political controversy and protecting the perps from actual punishment for their propensity to abuse young women.

Why is that a good idea? When this government changes, even if it remains conservative, you can bet the next DOJ is going to make a show of prosecuting these crimes. But instead of defusing this political and legal issue by actually dealing with it, Trump decided to try to distract us from it by . . . bombing Iran.

Regime change . . . the topic, indeed.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Like many New Yorkers, I’ve escaped the chill of New York to find some warm weather in Miami. And sitting on the beach, I had a revelation: Artificial Intelligence can do most of what I do as a fractional general counsel. So I quit. What I’ll do next is anyone’s guess, but in the meantime I’m pretty happy in my tent on the beach. A tent is the only option: I can’t afford a hotel because I won’t be able to work for a while, if ever, and there is no severance when you quit your own company.

I actually thought this through. Like many lawyers, I made my money drafting commercial contracts, leases, purchase and sale agreements, financing documents, private placement memoranda, compensation agreements, stock option plans, board resolutions, etc., etc., and that work is pretty much gone. It was nice while it lasted. And my litigation practice is on the way out too: AI can research, draft, and respond to motions and document demands in a fraction of the time it used to take. The only thing it can’t do is stand up in court and make an argument, or examine or cross-examine a witness. But I only do that a few times a year, and when I look at it, courtroom work and depositions account for less than 10% of my billables. And that’s coming soon, so I’m told. The robots, being owned or leased from some big tech company, will probably have better suits than I do. Yep, time to quit.

I used to think—like, last week—that I was OK because I’m not hired for drafting. That work is commodified anyhow and offloaded to lower-cost associates or offshore/low-cost legal service providers (big-ish firms call this “leverage,” and they charge a fortune for the work their associates and LSPs churn out—it’s the number one reason why my clients used to use me instead of a big-ish firm for much of this work). No, not me. I was hired for structuring and strategy. And AI can’t possibly do that, right? Wrong.

Turns out the reason AI can’t really structure or strategize well at the moment is actually by design: the confidence level to suggest litigation strategy and transaction structure is just not high enough for the AI system to confidently predict what to do. So it makes some suggestions, many of which are wildly wrong and often based on “hallucinated” information. But having worked with the tech for a while, I know that with some prompting you can (1) check any “fact” it comes up with and (2) get it to tell you what evaluation criteria you should use to make a decision, and then you can replug that evaluation criteria into the chatbot, which will allow it to make a confident suggestion. Eventually, AI will figure this out. That is the nature of the beast.

But I should have been fine, right, because 95% of what I do does not end with a written document—or a strategy or structure. That is just the beginning, actually. Almost always, there are other lawyers involved in the transaction or dispute, and/or human stakeholders at my clients who need to read and understand the document, structure, or strategy.

Because there are humans (still) involved, I tend to draft—often with the help of AI—long-ish (privileged, when it’s to a client) emails explaining the document, structure, or strategy, and then have follow-up calls. I suspect that, much of the time, the other human plugs my email into their own AI with a very simple prompt like “tell me what Jesse is saying” or “tell me what Jesse is saying and draft some questions and counterpoints.” Or, in the case of some of my more aggressive opposing counsel: “Jesse is an a-hole and a really crappy lawyer—rip his arguments to shreds and tell him how dumb he is.”

And here is the real reason I quit: it’s only a matter of time before the AI systems start to talk to each other. Why have I written an email or prepared a document only to have the human on the other side enter the email or document into their own AI system and then send something back to me responding? What’s the point of that? Why can’t two AI systems talk to each other, perhaps solve the dispute, or agree on all the transaction structure and draft all the documents—then send them to a human for an electronic signature? And then have the AI move money or file the necessary documents to resolve the dispute or settle the transaction?

There is a separate question of whether these types of systems can be owned by non-lawyers—which, if you think about it, is the only real question left once the tech gets to that level. As I’ve written before, ownership of those systems by lawyers or “Alternative Business Structures” is probably the most impactful discussion for the future of the profession, and it’s the one we’re going to be having for the next few years.

Putting aside the ownership issues, I have no doubt that the technology will get to the point where lots of legal work can be automated: two AI systems talking to each other, with minimal human intervention. I’m actually undecided on whether the lawyers managing these systems need to be high-cost senior specialists or low-cost junior lawyers. Either way, there will be fewer lawyers doing the work because so much will be automated.

After doing this for 20 years, I can confidently say there is nothing precious about legal work, or the vaunted “judgment” of human lawyers—which, in my experience, is often as wrong as it is right. The future is fewer, and more productive, lawyers. So I quit.

But wait. Maybe I should reconsider.

The question we, as humans, need to ask is: would that really be better than the current system? Do you really want two AI systems (either owned by a lawyer or some tech company) negotiating deals for you with minimal human supervision? Resolving disputes? Determining whether you’re in compliance with regulations—presumably determined by other AI systems? Or deciding whether you’re guilty or innocent (or whether you should be charged in the first place)? Maybe you do. If so, consider yourself a proud techno-utopian who is building a better future with the information you have today. Not a bad thing—but sometimes it misfires. The rest of us can happily live in the real world.

And the real world offers some real-world challenges. First, there are only so many large language models, and only so many companies that are going to make them legal-specific. Let’s say that, when the industry matures, there will be maybe 100 AI systems capable of handling high-quality legal work, and 10,000 “AI-native” law firms are really just wrappers on those systems. I don’t know if that’s the right number, but it’s unrealistic to think there will be anywhere near the number of legal systems as there are U.S. law firms (firms, not lawyers) today (463K): https://www.statista.com/statistics/822025/us-legal-services-market-law-firms/?srsltid=AfmBOoqaQ4xe_ecwuVjIa6Fuph8l-UhgQ-ng-DH4ussUp5RqG4FrYH5z. In any event, there will be far fewer lawyers. Like I said before, the future is fewer, more productive law firms.

When you have such a consolidated industry, there are serious issues with conflicts, costs, and quality. Explaining them here will sound persnickety, and, as someone who works with tech companies every day of the week, I can tell you that it’s all solvable. But the solutions are not obvious, and it’s very expensive to solve.

That’s where the AI vision of the future of law tends to fall apart. Once the VC/investor money runs out, AI lawyers are going to cost as much as the human lawyers they are trying to replace. It’s just that the money won’t flow to lawyers—it will flow to the people who own the AI (again, the debate here is about whether only lawyers can own law firms). People and companies with gobs of money to spend on lawyers—or the government, which has more money than anyone—already have top-shelf legal services. The current system works fine for them. Maybe there will be some productivity gains, but nothing that moves the needle. And for those high-end legal services customers (“clients”), I’m pretty sure the AI replacement is going to be inferior to what they have today.

But for the 99.9% of people and businesses that need to decide between spending money on legal services or something else, AI offers solutions—but an AI lawyer is not the answer. What they need is a great human lawyer deploying AI to deliver faster and cheaper legal services.

Your Fractional General Counsel is a law firm that uses AI to compete on price and speed without sacrificing quality. If that’s also your vision of the future, and you want to help build a law firm that uses AI to allow human lawyers to offer cheaper legal services, please get in touch with me. That’s what I’m interested in because the cost of legal services is too damn high. And, of course, the goal is to make up the lost billables by doing volume. So to help, you can also send me some business :). That last bit was legal advertising.

You may have noticed that this newsletter had a conjoined title. Yes, AI can do my job. But no, I won’t quit. Besides, I hate camping.

If your looking the future of legal services in the AI era, its already here: using AI to service my clients faster and cheaper. LFG.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Distraction is a classic litigation and negotiation tactic. Almost weekly, I’m forced to spend time dealing with extraneous issues and not the merits of a claim, or the actual goal of the transaction. It’s things like discovery disputes over documents that probably don’t really exist, or the work that goes into redrafting purchase and sale agreements because of “material adverse events” contingencies that probably won’t happen. Some lawyers do it to run up the bill. But most of the time, it’s actually a way to distract from what really matters in the transaction, likely because someone is trying to prevent you from realizing an unearned advantage or distract you from the weakness of their position. Just my experience; yours may differ.

Our federal government these days is all about distraction. Daily, we have a barrage of semi-sensical and nonsensical actions by a government that just seems to operate at the maniacal whims of Trump. Remember tariffs? Remember the Gulf of America? Remember shutting down the Department of Education? Remember the National Guard in Chicago? Remember when we were going to invade Greenland? Remember when we had a masked federal agent terrorizing Americans in Minneapolis (that last one is still ongoing, but it will be old news in a few weeks). And now, increasingly, there is nonsense about interfering in state election processes. Yes, these are dangerous escalations and, as I’ve written extensively in the past, they pose major challenges to our constitutional system and the U.S. place in the world. But the Trump people are morons who can’t really follow through on anything—they certainly want to remake the constitutional order (and the world) in Trump’s image, but they don’t have the brains or discipline to do it. As I’ve pointed out many times, they make a lot of mistakes. But cleaning up their messes (to the extent that is even possible) is a full-time, exhausting job.

But more and more, I think we should see all this nonsense for what it really is: a distraction. And what are they trying to distract us from? I think it’s three things.

First, the graft, theft, and fleecing of America that is the real modus operandi of the Trump administration. Trump and his sycophants are savants at stealing stuff and getting rich ($TRUMP, anyone?). The most recent example? Trump’s $10 billion lawsuit against the IRS and the U.S. Department of the Treasury over the leaked tax records. Trump’s DOJ won’t fight it—they will settle it. It’s a self-dealing payout: if it gets resolved for $5–$10 billion, that’s functionally $5–$10 billion pulled from the Treasury into Trump’s pocket. Hopefully a judge will have the guts not to approve the settlement, but who knows how that will play out.

Second is Epstein, although that’s been less successful because the Epstein revelations are so salacious. My assumption is that they pretty much gave up on that and are (sloppily) releasing the files and letting the chips fall where they may. While a sloppy production of documents might seem like the way to go since it confuses everyone and creates collateral damage, the sloppiness will always create questions around the completeness of the disclosures, which will, in turn, keep the story alive. So Epstein, to the extent he died the first time (that is questionable), will never die again. Oops.

The third thing they are covering up is the most important: the fact that costs are increasing much faster than wages, which is causing an affordability crisis that is becoming harder and harder to ignore. Yes, everything seems to be getting more expensive except the value of your labor (unless you’re in the top 5%, which you probably are if you’re reading this).

As I advise my clients, deal with the extraneous issues, but focus on the main one. And because the main issue is affordability, this newsletter is about the law of affordability—what it really means and how the government can, and cannot, make the situation better. Trump and most of his sycophants seem particularly unsuited to both understand and address affordability, so the field is wide open for the opposition to dominate. That’s natural: when you’re stealing everything you can get your hands on, you don’t really think about how much things actually cost.

The first thing to understand about the law of affordability is that the government’s power to regulate the economy to make things more “affordable” is, these days, rather uncontroversial. The original Constitution gave Congress the specific authority to regulate interstate commerce (Article I, Section 8 (the “Commerce Clause”)), which, for about 150 years, was generally used to strike down state laws that interfered with interstate commerce, rather than to support what the federal government could do to regulate the economy to, well, make life more affordable. Back in those days, the federal government did not do much, so it was natural that the Commerce Clause was not thought of as allowing the federal government to do much, but rather as a check on the states’ right to insulate themselves from the national market.

Once the federal government started regulating commerce by, for example, setting minimum amounts paid to producers of milk (thereby making life more “affordable” for milk producers even if no one was buying milk or there was too much milk) or limiting production of wheat to keep prices higher (thereby making life more “affordable” for small farmers), the Supreme Court said that was constitutional. There are some things very attenuated from interstate commerce that the federal government can’t do, but those are rare.

Other parts of the Constitution—namely the Fifth Amendment’s Due Process Clause and the Fourteenth Amendment’s application of due process to the states—are also no longer used to strike down government interference in economic affairs. The law used to be that due process prohibited the government from interfering in the freedom to contract and so, for example, any law that regulated wages was likely unconstitutional. The New Deal changed that—but only because Roosevelt threatened to pack the Supreme Court to pass his New Deal legislation, and had the votes in Congress to do it.

These days, due process protects against certain government overreach, but it does not protect “freedom of contract,” so laws that regulate the economy to make life more affordable—whether minimum wage laws or price controls—are perfectly constitutional. In some instances, the laws are vague or ambiguous, or the executive branch exceeds its congressional authority. However, if the federal government (or state government) wants to regulate the economy, and does it right, it can. Additionally, state constitutions often give states even more power to regulate economic affairs. For example, New York State’s Constitution guarantees education and housing (unlike the federal Constitution).

The Constitution is not a barrier to the government making life more affordable. Rather, another law stands in the way: the law of economics. For example, the government could, if it wanted to, give everyone a bunch of money. That would be perfectly legal. The problem would be that it would drive prices up by (1) creating more demand for goods and (2) making those goods more scarce as some people choose to work less. We saw that happen with the COVID bailouts, and we’re dealing with the fallout even six years later.

It’s also why proposals for “free buses” make such little sense. You would increase demand for the service while decreasing the funds available to provide the service. These are policy decisions, not legal ones. The law is settled. The policy is dumb.

The other thing the government could do (and does) is regulate prices by putting caps on the price that can be charged for goods and services. Again, this is totally legal. But price caps also don’t work as intended because they decrease supply. No one wants to make an investment where their return is capped. We see that in New York City: it’s why tens of thousands of price-controlled units are currently off the market—many of the units are old and need to be renovated, but current state law says that the price will be capped when those units return to the market. Landlords won’t spend the money to renovate when their return is capped. And where there is a mixed market, with some units being price-controlled and others being free market, capping the costs of some units will raise the cost of others.

It’s why the current proposal for a “rent freeze” is counterproductive. It’s probably going to lead to higher rents, not lower rents—at least for the millions of people not in price-controlled housing. The solution is to add supply. Whether the government uses its power to add supply is, again, a policy question, not a legal question.

Here, there is some law around affordability—but it’s still being made. Because price controls on housing basically require private landlords to take less money and house tenants they otherwise would not, there is an argument that price controls in housing are a “taking” in violation of the Fifth Amendment (“nor shall private property be taken for public use, without just compensation”). I’ve written extensively about that. (It’s behind a paywall, but I can give it to you if you’re interested).

So far, two members of the Supreme Court (Thomas and Gorsuch) have indicated that they would consider whether price controls on private housing are a taking—and there is another case for the Court to consider the question. It’s possible this would be the first attempt for the Supreme Court to weigh in on the government’s efforts to deal with the affordability crisis. IMHO, once we get rid of price caps, the only solution to housing affordability is the obvious one: build more housing. And that would be a good thing.

In the end, despite being very willing to use imagined powers to advance their agenda (tariffs? shutting down federal agencies? deploying the National Guard to U.S. cities), they completely ignore the powers they actually have to make life better for working Americans. The opposition has to stay focused on preserving democracy and resisting the slide toward autocracy—because if elections become less meaningful, Trump’s inability to address affordability won’t matter; voters won’t have a real way to make their voices heard. That’s exactly the outcome Trump would prefer. But as long as we can connect the dots—showing that life is getting less affordable as democratic norms erode—more Americans will recognize what’s happening. And hopefully that shifts enough minds to course-correct before it’s too late.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

It's the middle of January, so it’s a good time to talk about ice. Namely the cost of ice, in all its forms.

The Price of ICE in the Streets: $16 Billion + Our Founding Principles

Unlike most news in the Trump era, the stories of abusive and violent ICE agents in the Twin Cities—and now other cities—have not died down. In fact, as Trump has doubled down, the story is growing and metastasizing: it has moved beyond a story of immigration enforcement (which most Americans favor) to a story about government overreach, with Americans being subjected to random “show me your papers” stops. With the exception of Trump’s Greenland weirdness (addressed below), ICE agents terrorizing American citizens and non-citizens are dominating the American consciousness this cold winter. MAGA would not have it any other way.

The price of ICE violating Americans’ rights is fairly straightforward. The recent reconciliation act (“One Big Beautiful Bill”) gave $16 billion for ICE personnel and another $45 billion to build detention facilities. https://www.congress.gov/bill/119th-congress/house-bill/1/text (Sections 90002 and 90003). The money is being spent, and we see the results on the streets. While I am sure there is a certain segment of the American public that relishes watching bulky, badge-carrying men in brown uniforms (yes, brown) and baseball caps pulling people out of their homes and cars seemingly at random, most Americans believe that is un-American.

Interestingly, while it might be un-American, it is technically not unconstitutional in immigration enforcement: in September 2025, the Supreme Court actually said that random immigration stops based on nothing more than skin color or language are perfectly fine. Really. The case is Noem v. Vazquez Perdomo, which was filed in response to ICE’s enforcement activities in Los Angeles over the summer. A lower court ruled that those stops were unconstitutional. https://www.supremecourt.gov/opinions/24pdf/25a169_5h25.pdf That was the decision that stayed (stopped pending appeal) a lower court’s decision that such stops were a violation of the 4th Amendment. It means that while the Court sorts out the constitutionality of those stops, they can go on. It’s going to be quite a while until that happens, if at all.

That, of course, does not mean that those random stops don’t violate state law, and the violence we’re seeing violates other constitutional provisions, like the 8th Amendment prohibition on cruel and unusual punishment, or the other part of the 4th Amendment that prohibits excessive force. We’re also learning that ICE seems to think that administrative warrants, as opposed to judicial warrants issued by a judge, allow them to enter someone’s home. https://abcnews.go.com/US/ice-memo-allows-agents-enter-homes-judicial-warrant/story?id=129 That is in direct contrast to the way the Fourth Amendment has traditionally been understood: you can arrest an undocumented person in a public place without a warrant (just an administrative order), but not in their home, because that requires a finding of probable cause by a judge under the 4th Amendment. The policy of kicking down doors without a warrant will be tested, hopefully by homeowners who don’t want ICE to kick down their doors holding only administrative warrants, and hopefully stayed pending a determination on its constitutionality. But it’s hard to know how or when these issues will be litigated because the remedies against federal agents are so limited. https://fractionallyyours.substack.com/p/your-guide-to-the-law-in-lawless There are legal fixes to that, but it requires some creativity and boldness, which are in short supply on the American left—although we’re getting there. I digress.

As we watch the terrifying and heartbreaking scenes in the Twin Cities and other places, we need to remember that there is a reason we consider government officials acting in an arbitrary and capricious manner—whether it’s using excessive force, kicking down doors without a warrant, or forcing Americans to identify themselves—to be un-American.

Every schoolchild learns about an obscure event in Boston on March 5, 1770, when three Americans were killed by British soldiers (two more died of their wounds later) during a protest—an event we now know as the Boston Massacre. The Boston Massacre did not arise from an organized protest: the Bostonians killed in the crowd were angry that a British private, Hugh White, had hit a 13-year-old boy, Edward Garrick, on the side of his head with a musket after Garrick insulted White’s superior officer. It’s the type of routine, tense interaction between civilians and government agents that spirals out of control when you have heavily armed soldiers mixing with a restive civilian population. History does not repeat, but it rhymes. We regard those martyred in Boston in 1770 as the ultimate patriots.

Some say instigation is the point. The more of a mess, the more Trump and his sycophants can justify increasing the countermeasures to the point of either canceling elections or martial law. As I’ve written about before, a declaration of martial law (which has been declared 68 times in U.S. history) https://www.brennancenter.org/our-work/research-reports/martial-law-united-states-its-meaning-its-history-and-why-president-cant allows the military to take over what would otherwise go into the criminal justice system. The military does not have a jury of your peers (just a military jury) and other constitutional protections. It’s the best way to disappear your perceived enemies.

Here is where evil meets incompetence: martial law requires the civilian courts to be closed. And only the state can close its courts. Blue states, like Minnesota, won’t do that. Red states might. Ditto with elections: they are run by the state, and blue states are not going to cancel their elections because of disorder. Perhaps this crackdown should be happening in Houston, Nashville, or St. Louis. But, alas, these people are as stupid as they are mendacious. Don’t forget that.

Yes, this talk of martial law and canceled elections sounds very un-American. If the price of ICE is our founding principles of being free from an abusive government (and $16 billion), I have to think that most Americans won’t take that deal. As we enter the 250th year of our independence, I think we need to ask: Who are our patriots now?

The Price of Ice in Greenland: Our Global Goodwill

The whole “Taking Greenland” idea is one of the most extra-legal, extra-sensical foreign policy moves I’ve seen in a long time. I negotiate for a living. And the combination of arrogance and incompetence in the way this was floated—sale, invasion talk, tariffs-as-leverage, the whole grab-bag—was staggering.

If what the U.S. actually wants is reliable access—continued defense positioning, secure basing rights, and the ability to participate in or benefit from resource development—we already have a framework for a lot of that. There are established agreements and longstanding strategic relationships that address those interests.

My clients ask for advice on purchase deals all the time, whether they are being bought or doing the buying. I break it down simply: there are asset deals and stock deals. If you want specific rights—defense access, infrastructure cooperation, resource extraction partnerships—that’s closer to an “asset purchase” concept: you negotiate for particular assets and rights, and you leave the broader “liabilities” behind. Those are typically the right deals for my clients, although there are some instances where we do stock deals.

Here, Trump was demanding a really bad “stock deal”: total control over the entire territory, along with everything that comes with it. And those liabilities are not theoretical. Greenland is vast, remote, expensive to operate, and infrastructure is limited. The asset deal—which he already had—was the way to go. Everything else was just stupidity.

And the collateral damage of that stupidity matters. Even setting aside the substance, the posture was needlessly antagonistic to our European allies. Europe is an enormous market of hundreds of millions of consumers, and it’s also a critical capital partner. When you pick fights for no reason, you invite retaliation—trade shifts, purchasing shifts, and investment shifts. That means real costs: less demand for U.S. assets and potentially higher borrowing costs over time.

Predictably, once the scale of the backlash became obvious, Trump backed off. But the damage lingers. The bigger problem isn’t Greenland—it’s credibility. When the U.S. looks erratic and unreliable, investors price that in. And that’s an expensive price to pay for ice.

Keep thinking, keep building.

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Happy 2026. We’re a week in, and already our norms—or what’s left of them—are being challenged. When I help my clients navigate unpredictability, whether it’s a new type of transaction or potential litigation, there are always legal guideposts that can show the way. A good lawyer knows how to find those guideposts, read those guideposts, and advise accordingly.

The point of this newsletter (now two years old) is to try to find and read the guideposts of legal current events, no matter how lawless the world seems to be. Let’s do that with two recent stories that seem to show lawlessness by our government: the abduction of a foreign leader and the murder of an American citizen by federal agents.

The Law of Government Accountability

Like most Americans, I’m horrified by what appears to be the murder of an American citizen, Renee Good, by ICE agent Jonathan Ross in Minnesota. The video is pretty incriminating—if I were a finder of fact, I would certainly say that Ms. Good was trying to drive away when she was shot and killed by Agent Ross. Perhaps Agent Ross thought he was in danger and was shooting in self-defense. Actually, as a matter of law, explained below, the law gives Agent Ross the benefit of the doubt. Unless he was actually trying to kill Ms. Good, he is immune from prosecution. That being said, we know Agent Ross was allegedly dragged by a car in a separate incident. Perhaps he had a premeditated plan to kill the next driver he came in contact with on the job and intentionally killed Ms. Good, living out a weird revenge fantasy?

So how do we sort out who is right? In other words, how do you hold a federal agent who may, or may not, be doing their job liable for wrongful death (or any tort for that matter)?

Let’s start with the legal position taken by the Trump administration, which is, simply, that there is no reason to make any determinations because federal law enforcement officers have absolute immunity. As with most legal positions taken by the Trump administration, that is just wrong. Government officials don’t get absolute immunity (judges and prosecutors and, apparently, presidents sometimes do for specific “official” functions, but that’s a topic for another time). Most government officials get what is called “qualified immunity.” Qualified immunity is one of the most important concepts that any lawyer needs to know. No matter what type of law you deal with, if you come anywhere near any level of government, you and your lawyer need to know about the doctrine of qualified immunity.

There are a few principles to understand qualified immunity. First is sovereign immunity: you generally can’t sue the United States or a state for money damages unless the sovereign has expressly waived immunity. Why would a sovereign waive immunity? Well, it might be hard to do business if you can breach contracts with impunity. Actually, most states waive immunity because the federal Constitution requires them to—the Fourteenth Amendment specifically makes the Bill of Rights applicable to state action, and the Bill of Rights prohibits things like unreasonable search and seizure, cruel and unusual punishment, and all the other crazy things a state could do to deprive citizens of their rights. In 1871, during “Radical Reconstruction,” Congress passed the Civil Rights Laws. One of those laws, Section 1983, created a private right of action for citizens to sue state officers who deprive them of their constitutional rights under color of state law. And that was the end of absolute immunity for any state official because certain state officials—the racist ones—really wanted to deprive some of their citizens of their constitutional rights, especially the rights guaranteed by the Fourteenth Amendment.

Federal courts then developed a whole body of law about what types of actions by state officials violate the Constitution and other federal laws—in other words, the state official’s immunity is only qualified. They can do a lot of things, but they can’t violate clearly established law. Killing someone without cause is one of those clearly established rules that defeats qualified immunity

But an interesting thing about Section 1983 is that it only applies to the states, not the federal government. So even if Agent Ross violated Ms. Good’s federal constitutional rights by killing her, there needs to be a separate basis for Ms. Good or her family (or state authorities in Minnesota) to get recourse from Agent Ross because he is a federal agent.

The federal government won’t prosecute Agent Ross—they’re defending him without even conducting any investigation, which is the type of weird maximalist nonsense we’ve come to expect from Trump’s people. Ms. Good’s family can sue the federal government in federal court under the Federal Tort Claims Act (FTCA) (usually only after first filing an administrative claim with the relevant agency). But an FTCA claim would be against the federal government, not Agent Ross. Separately, they may try to sue Agent Ross for money damages under what is called a “Bivens claim”—an implied, judge-made constitutional remedy that functions as the federal analogue to Section 1983 (which applies only to state and local officials) for the constitutional wrong. But, not surprisingly, the Supreme Court has severely limited Bivens claims, most recently in June 2025 with Goldey v. Fields. The logic is that the Court is generally not in the business of creating new damages remedies against federal officials; outside a few narrow contexts, it has said that job belongs to Congress—and Congress has not created a Section 1983-style statute for federal agents.

But there’s another civil path people overlook, and it’s right at the forefront of the law: state-law damages remedies in state court. The basic idea is that states can enact—or use broadly written existing—civil-rights statutes (a “converse § 1983”) that allow damages suits against any person, including a federal officer, for violating federal constitutional rights. That doesn’t “expand Bivens.” It’s a state-created cause of action to enforce the same federal Constitution where Congress refuses to act. In New York, a version of this has been introduced as S8500/A9076 (the “New York Civil Rights Act”), but it has not been enacted into law.

Would it get tested? Absolutely. Federal officers would predictably argue immunity and preemption, and they would very likely try to remove the case to federal court. But that’s not a reason to shrug; it’s the point of the project. This is exactly the kind of creative lawyering states need to lean into as the federal government and its agents become increasingly lawless: if Washington won’t police itself, the states have to build the tools to do it.

And if Congress tried to wipe out those state remedies across the board, that wouldn’t be a neutral “technical fix.” It would be an aggressive political choice—one that openly asks the country to accept a world where federal officers can violate constitutional rights and the states are forbidden from providing a damages remedy to their own citizens. That’s not just a legal argument. It’s a sovereignty argument. And it’s exactly why states should be building these tools now.

The Law of Abducting Foreign Leaders

As a lawyer who generally handles business issues, I don’t typically weigh in on foreign affairs. But when my government starts to abduct foreign leaders (like Nicolás Maduro) and threatens to “take” large islands from NATO allies, it’s important to understand the legal framework for all of this.

As a working lawyer, when dealing with non-U.S. clients and adversaries, most of the time is spent trying to figure out which law applies and where disputes can be resolved. We never look to some body of international law (it actually exists, but both parties need to agree to be bound by it in advance and, in my practice at least, they rarely do). More likely, you’re agreeing to arbitrate in a certain place under the laws of a certain country, which will be enforced via the New York Convention.

Outside of the commercial context, the international organizations we have don’t work very well except as forums for great powers to jockey for influence. They rarely, if ever, resolve a dispute. We’re a world of sovereign nation-states, and it’s very apparent—with the U.S.’s renewed militaristic posture toward the whole world—that there is no real forum to resolve these global disputes except the battlefield: the military equivalent of trying to act with legal impunity.

The battlefield is risky. In law and life, I’ve seen the powerful humbled because of their hubris. Vietnam? Iraq? Afghanistan? Perhaps there will be an “end of history” where there is a benevolent superpower that cedes its interests for the benefit of the whole to avoid conflict. I’m not holding my breath.

So the most interesting thing about “international law” is not what is legal and illegal, but the legitimacy of international law itself. Although there is no place to enforce international law, countries themselves can agree to make their international commitments that they freely entered into the law of their countries. That is essentially how the European Union works – members of the Union agree to make their domestic laws in sync with the EU laws. Here in the United States, treaties are the supreme law of the land (Article VI of the Constitution) which means, in theory, if the U.S. is a party to a treaty that prohibits it from pulling a foreign leader (and his wife) out of bed and transporting them to the United States, then someone broke U.S. law when they did exactly that to Mr. and Mrs Maduro. International law professors will probably point out that the U.N. Charter prohibits such aggression for non-defensive purposes. Ditto with Trump’s current threats against our NATO allies, which the NATO treaty presumably prohibits. So fidelity to international law comes not from some outside body forcing us to accept the law, but from our voluntary commitments.

Putting the illegality aside, I actually like the idea of the U.S. swooping in and arresting autocratic leaders. The issue here is that there is no consistency, no doctrine, no policy, and no law. In one breath, someone in the Trump Administration will claim that this is a law enforcement action, and in the next they will claim it’s a military operation to neutralize a threat to America. Combine this with the recent pardoning of the former president of Honduras, who was actually convicted of drug trafficking, and they are not only legally inept, but inconsistent and foolish.

Why do we exert time and break our laws to extract one allegedly drug-dealing head of state, while pardoning another head of state who is convicted of drug dealing? There is no rhyme or reason. The point is that while Trump and his sycophants may think that this type of robust interventionist activity makes Americans look stronger, it actually makes them look legally inept and invites other countries to act the same way.

Predictability and consistency are a universal good because they allow for planning and execution. Even a really bad lawyer knows that if you act inconsistently and irrationally, you’re going to lose whatever argument you’re trying to make. Trump is heading in that direction.

Keep thinking, keep building.

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Happy holidays! This is a contemplative time of year, and it’s a year that made many people rethink a lot of things. Yes, it seems like things suck. But that’s just because our expectations are so high. If you’re reading this, chances are you’re in the 5% for wealth and quality of life, globally. You have an ingrained expectation that the system will work for you and, barring some personal or communal tragedy, things always work out. With so many norms being challenged—and expectations about how things are supposed to be (from tech to Hollywood to government to global alliances) getting tested—it’s no surprise the mood is malaise and uncertainty. And when the federal government looks inept while pursuing cruel policies in the name of renewed “greatness” (and yelling at us when we question whether this really is so great), it’s easy to think we’ve lost our way. But I disagree.

What’s happening is a reset. Yes, it’s painful. But once you understand there is a basic yearning for something new and different, it’s liberating. Try to reimagine all the things that suck and reject old frameworks and tired theories. And then layer in AI, which for all its flaws is a pretty cool technology that can turbocharge your ideas if you know how to use it. My prediction: 2026 is going to be rocky, but pretty awesome!

Personally, I spend a lot of time both practicing law and thinking about the business of the law. I also have many clients in different professions: medicine, architecture, communications, software development, etc. So I think a lot about how we regulate these industries today, and what the future holds.

These days, those avocations (and many more) are more businesses than professions. Interestingly, many have retained some of the aspects of a profession—namely, the ones that benefit the professionals. Medicine, law, architecture, and, to a lesser extent, software development are “credentialed.” The basic premise is that only human beings with certain licenses can collect fees from the performance of a professional service. From one perspective, it’s a consumer protection mechanism to assure quality (I like the fact that my doctor has a license). But seen another way, it’s a protectionist racket that leads to less supply of the services, and therefore higher prices and less choice.

Certainly, there is a world where we don’t license and we assure quality on the back end via lawsuits. Some dude claiming to be a doctor treats you and causes harm; you can sue. That would place the risk in the appropriate places. But the societal costs of that are huge, so licensing probably does serve some important purpose in that regard. And since only experienced and personally invested humans could do most of these professions, allowing those well-credentialed professionals to have a monopoly on the practice of those services also seems fair, even if it resulted in higher costs and less choice.

In the past, there were few other options for providing professional services —often the most creative we got was allowing for multi-state licensing, so you could choose a professional licensed in another state. But these laws are so restrictive that even that option was limited. The biggest innovation in the stodgy world of professional services happened about 30 years ago, when we decided to “platform” professional services. Now, consumers can find a professional services provider and judge quality based on reviews from other users, or just compare providers to others. Every profession has them—ZocDoc for doctors, UpCounsel (and 10 others) for lawyers, Houzz for interior designers, Headway for therapy, etc., etc. I’m not counting the platforms for non-professional services like taxis (Uber/Lyft) or handypersons (TaskRabbit/Angi’s List). I’ll return to the latter later.

I have a few platform clients, so I understand their business model—and the regulations surrounding them—pretty well. The premise of platforming is that the professional pays for access to customers. The platforms do the user acquisition, and the professional pays for the leads.

The biggest limitation on the platform business is that, for the most part, the platform can’t take a percentage of the fees that the professional earns. That is because most states have prohibitions on professionals “fee sharing” with non-professionals. It means that profits from providing the professional services can only be paid to other professionals with that license. For credentialed/professional services, the platform is an interactive billboard. Professional services have it easy. Compare that to, say, Uber and TaskRabbit, where there are no prohibitions on fee sharing. For the non-credentialed, the platform gleefully takes a (large) percentage of the fees from the worker. For non-credentialed/professional services, the platform is a plantation. A topic for another newsletter.

Remember how I said before that all this credentialing was sort of a victimless crime because only humans could provide the professional services, and we really had no choice but to pay more for a limited choice of highly qualified professionals? With artificial intelligence (and the promise of artificial general intelligence), that is not true anymore. Yes, it’s very possible that at some point in 2026 or 2027, an AI lawyer, doctor, architect, or therapist would be as capable as their credentialed human counterpart (but not as competent as this semi-well-credentialed lawyer, of course).

Enter those same fee-sharing rules, which also prevent non-professionals from having equity in professional services organizations. It means that only lawyers can own law practices, doctors can own medical practices, architects can own architecture firms, etc. Who can’t own those professional service organizations? Corporations. Corporations are owned by shareholders, and send profits to shareholders. Those shareholders are not licensed professionals. Hence, you don’t see a lot of capital being poured into building synthetic/artificial intelligence professionals like lawyers, doctors, and architects. The model does not work from a regulatory perspective. You can build tools for those professions—and boy, do they build and try to sell AI tools to lawyers—but you can’t build a customer-facing product that performs the professional service.

I suppose that a group of lawyers, doctors, architects, etc. come together to build an AI version of their service and sell it directly to clients (lawyers call this the “new model”), but the problem is that it’s super expensive to build and market, and there are still geographic limitations. It’s a typical innovator’s dilemma: You’re better off just providing the service you have a monopoly on (or you’re just really good at) than spending your money building a new service that will probably earn you the same (or not work at all).

But some of those new model professional service organizations might break through. Or we may change the fee-sharing rules—Arizona, for example, recently allowed fee splitting. But the catch is that you can only provide professional services in Arizona. Maybe more states will follow. It would be nice to see the costs of professional services come down, even if it means that professionals like me will have more competition. Don’t worry, I’ll be fine. I already have a new model firm set up, even if the functionality and the legality are dubious.

Short of the fee-sharing prohibitions going away—which would make most professionals employees of corporations owned by outside investors (for better or worse)—the most promising method of fee splitting is the “managed service organization.” I’ve created a few of these for my clients. The idea is that the professional service is provided by the licensed professional, but all the profits are funneled to a servicing entity with outside investors. Technically, the MSO is being paid to provide back-office services (which include things like marketing and technology). They charge a lot. And they are owned by the professional and the outside investor. In the legal space, a few large firms are working on this model.

At the extreme, the new-model law firms, at least the smart ones, are positioning themselves as lawyers but with an MSO with outside investors providing technology. And because the customers are coming for the technology, it’s totally acceptable if the lawyers pay most of those profits from legal service over to the MSO for its “managed services.” These models are a promising workaround to the fee-splitting prohibitions. crosby.ai and paralex.ai use this model. As with many new technologies, we don’t know the legality of this. As we often do in tech, we hope that by the time the law catches up, the new-model firms will be so well established that they can bend the regulations. We shall see.

Where things get really interesting is the licensing requirements for the lawyers, doctors, and architects who do the AI-enabled review. Do they need to be licensed in the place where the client asking for the service is located? We really don’t know, although I am pretty sure that the professionals doing the human review are probably out of compliance if they are reviewing documents and providing legal advice to clients with no nexus to the location of the professionals’ licensure. But if they are in India or the Philippines, will they ever be sanctioned? Probably not. And while we’re at it, why don’t we completely offshore our professional services providers? With AI, it’s possible. Perhaps we’re watching the wrong border. Again, this is a reset. It’s all up for grabs. I’m here for it.

This is the final post of Fractionally Legal in 2025. The future is, as always, constant—but not consistent. Still, we’re all on this ride together. On to 2026.

I’m looking forward to the interesting times (and the interesting topics) ahead. And if there’s anything I can do to make your legal life a little easier, I’m always happy to help.

That last bit was attorney advertising. Yes, compliance is still a thing.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

Hope you’re having a happy holiday season!

Santa is a Unitary Executive

The “Unitary Executive” is the theory that the President alone is supposed to be able to remove appointed executive branch officials “just because.” Anyone on a commission who has a policy disagreement with the President (or whom the President just does not like) is going to be dismissed. Get in line, or get a new job.

From a legal standpoint, the basis of the Unitary Executive comes from the President’s Article II duty to “take Care that the Laws be faithfully executed.” But as we all learned in 5th grade, the President does not make the laws she is charged with faithfully executing—that’s Congress’s Article I power “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”

One could easily see how the unitary executive theory would be attractive to our current President, who surrounds himself with sycophants and thinks he has a “very good brain.” But the theory was actually not developed to appease Trump’s ego. Rather, it’s part of a much more complex constitutional scheme that reflects progressive—and not conservative—governance. The bedwetting by the left about how the Supreme Court is handing Trump another victory in the case of Trump v. Slaughter needs to stop. In fact, the Supreme Court is paving the way for a government that is politically responsive rather than captured by regulated industries.

Governing in the modern age is complex. Our government is expected to make, among other things, rules about finance, nuclear energy, business competition, communication technology, and consumer product safety, etc. etc.. Those things require expertise—expertise that politicians don’t have and, in many cases, don’t want to have. So starting in the early part of the last century, Congress, in its wisdom and at the request of Executives who needed to figure out how to govern through a war and a depression, created a host of “independent administrative agencies” to deal with these issues. For finance it’s the Securities and Exchange Commission (“SEC”), for business competition it’s the Federal Trade Commission (“FTC”), for nuclear energy its the Nuclear Regulatory Commission (“NRC”), for communication technology it’s the Federal Communications Commission (“FCC”), and for consumer product safety it’s the Consumer Product Safety Commission (“CPSC”). There are more, but you get the idea.

These agencies pass laws (“regulations”), enforce those regulations, and penalize people who break the rules. The agencies basically take all three branches of the federal government and mush them together. Sometimes something good comes from the mush. But most of the time, nothing good comes of it. Why? The only people who master the rules of these agencies are the people and companies with business in front of them, and the lawyers they hire. There is a reason why every law firm in the nation has a Washington, D.C. office. The legal term is “regulatory capture.”

Regulated industries like this setup. So do politicians who can plead ignorance. After all, the rules are being made by “independent agencies.” If you don’t like it, don’t write to your Congressperson. Rather, hire a lawyer and submit a timely comment to the Federal Register during the “comment period.” I’ve done that for clients. It’s not something your average concerned citizen can do on their lunch break. And it’s not designed to be.

At this point, unwinding the administrative state is not really possible, or at least can’t be done quickly. So its opponents found two other ways to do it. I’ve written before about the first: undoing “administrative deference,” the idea that while Congress passes laws, the independent administrative agencies fill in the blanks and—when someone challenges an agency rule—the agency actually gets deference.

Fractionally Legal: Jesse's Legal Newsletter

Fractionally Legal v14: The Supreme Court is not Crazy, It Just Had a Bad Episode

To say it's been an active Supreme Court session, with an “activist” Supreme Court, is probably an understatement. We’ve all become amateur constitutional lawyers in the last 30 days or so, with half the country thinking we’ve outsourced our governance to some unelected high priests who see it as their role to create some type of patriarchal Christian t…

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2 years ago · Jesse Strauss

In two decisions last term, the Supreme Court did away with that deference, which means that judges, not administrative agencies, are making the ultimate interpretation of Congress’s ambiguous or poorly sketched-out law.

While this expands judicial power at the expense of the executive branch, it’s actually Congress that is ultimately responsible here. What the Supreme Court is really saying is that Congress needs to stop passing ambiguous laws and leaving it to someone else to sort out. Yes, you can (and should) write to your Congressperson if you feel strongly that something needs to be regulated differently or better. Congress—not the administrative agencies carrying out the laws—needs to be the one with the expertise. I actually think that makes sense. Its more transparent, responsive, and accountable.

But there is another way that opponents of the administrative state have been quietly chipping away at it. If you can control who sits on these commissions—who actually makes the day-to-day decisions inside the so-called “independent” agencies—you can do quite a lot. Combine that with the end of administrative deference and suddenly the structure that once insulated technocratic rulemaking from politics… isn’t so insulated anymore. Together, these two developments shift power back where the Constitution originally put it: with politically accountable actors.

And that is what the Supreme Court is actually doing. And this is good even though it feels like Trump is winning. He is not. Congress, if it ever gets its act together, should be restored to its place as the maker of “all laws.” Congress is the real winner.

And a President who is required to “take Care that the Laws be faithfully executed” cannot do that if vast swaths of the government answer to no one—except the entities they regulate. A progressive movement that wants the government to work should want a government that is accountable and efficent and united. Democrats need to stop defending the status-quo and start thinking about a new modle that can actually make government work better for those of us who depend on it. Which is to say everyone except the very rich and well connected.

In this holiday season, it’s important to remember that Santa is the ultimate unitary executive. Santa does not delegate his tasks to some independent commission. Kids write directly to him, and he alone answers for the result. Santa—with his purported ability to deliver hundreds of millions of gifts in a single night using nothing more than an old-fashioned sleigh and a few reindeer—is the ultimate unitary executive. He uses those powers for good and is radically accountable for them. That is a model we should all emulate.

The Grinch Stole Your Entertainment Job

Any objection to the sale of Warner Bros. Discovery to Netflix or Paramount on competition/antitrust grounds is bogus. The reality is that there is no competition issue. If Americans need to pay more for streaming highly produced content, so what? The free options – YouTube, social media, and whatever is next – are dynamic, socially relevant, and accessible for both creators and the audience. Also, there are healthier things to do than sit around and binge-watch “Is It Cake?”

If there is a reason to block the sale, it’s because of its effect on the creative class: when there is less produced content, it’s harder for creators to make money. In a different country, the effect of a merger on workers might be enough to block it. But not this one. Under the Biden administration, there was an effort to address the impact of mergers on the labor market. In theory, the same forces that lead to increased prices in a consolidated market could also decrease wages since there are fewer buyers for the services. There is no doubt that Netflix and Paramount are going to do everything they can to use fewer well-paid (and unionized) actors, stagehands, writers, and other creators, and those in the entertainment business have one less door to knock on. And, of course, the specter of AI haunts us all.

You can also be sure that Trump’s antitrust people don’t give a crap about wages for workers in the entertainment business. It does suck for those feeling the earth shift beneath their feet – as a self-employed lawyer, I feel for you on the job front – but it all works out (sometimes not how you expect). I can attest to that. I represent some influencers and creators, and, more often, the companies that hire them. The opportunities are there. You just need to be creative and have good counsel :). No pun intended.

A lot of the concern is actually not an antitrust issue. It’s about CNN, that decaying media property that very few people outside of Washington are watching. The concern is that Netflix does not care about news (it plans to spin off CNN), and that Paramount Global, which owns CBS, is going to own CNN (my understanding is that it plans to keep CNN) and therefore this combination is going to limit Americans’ access to quality news. Bogus, again.

Americans don’t get their news from cable or networks anymore. CNN has some good journalists doing important work, but so does Substack. And most Americans get their news from their Facebook and TikTok feeds. The real issue is keeping the financial spigot open for high-quality fact-based journalism. For the most part, corporate America abandoned that responsibility, and we need to accept that. We have a different, still evolving model. Whether that new model sustains the news we need to keep our democracy functioning is a separate question. But don’t think that corporate America, or the Trump administration, is going to help here. Quite the opposite. Only real demand can save the news business.

The most interesting legal questions surround the duty that WarnerBrother Discovery’s board has to their shareholders to take the highest deal – Paramount is offering $30 per share more than Netflix. You can bet there are some big firm lawyers working (and billing) through the night in anticipation of litigation. Happy holidays to them! So aside from all the fun that the Warner Bros. lawyers are having trying to figure out how to either win, or avoid, a major lawsuit, this transaction is not really worth watching (pun intended).

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.

First, Happy Holiday season. I think the key to happiness is gratitude for what you have, and the holiday season is a time to be thankful, no matter how stressful the world is. It’s no coincidence that we Americans start the holiday season with “a day of Thanksgiving,” and that day was declared by Abraham Lincoln in 1863, the same year that 51,000 Americans had died at Gettysburg. The idea seems very timely: in spite of the world’s insanity, we can still be grateful.

The Artificial Intelligence of the Law

The political prosecutions that the Trump administration are undertaking are like the artificial intelligence of the law: they seem like the real thing, but there is no actual intelligence involved. The indictment of James Comey and Letitia James (New York’s Attorney General) were dismissed. I’ve commented before on the overall sloppiness and shoddy legal work by Trump’s Department of Justice – for example the mess they made of what should have been a simple process to drop the production of New York City Mayor Eric Adams.

This is par the course. When it comes to central Department of Justice in Washington – where political prosecutions emanate from – the good lawyers are leaving in droves or being pushed out. They are being replaced by true believers or those willing to fake it, most of whom are middling or incompetent. I pity the very good early and mid-career lawyers who can’t leave for whatever good reason. Once this madness ends they will need to justify to future government employers and, more importantly themselves, following dubious orders by Trump sycophants. Lets hope everyone is being ethical and resisting where they can.

As for Comey, the DOJ probably needs to appeal because the statute of limitations has run. As for James, they can probably refile the charges – if they can find a U.S. Attorney (the local federal prosecutor) who can both get confirmed by the Senate or be otherwise properly appointed and wants to bring the clearly loser political charges against a Trump enemy. My bet, however, is they drop the matter and you never hear about it again.The whole thing was probably caused by Trump’s Adderall and solved by his Prozac.

As I wrote before, the goal of these prosecutions was not justice, but retribution and harassment.

I deal with lots of frivolous civil lawsuits filed against my clients, which are often filed to achieve a business, not a legal, goal. Want out of a deal? Threaten litigation. That does not work? File a frivolous suit (I’m dealing with one now). Criminal defense lawyers rarely dealt with that – when someone is prosecuted by the government and an indictment is secured, its because a grand jury found there was “probable cause” of criminality. As I’ve noted before, no cause is needed for a civil suit and the allegations in the complaint are actually taken to be true.

There are always political motives behind prosecutions. But because of the probable cause standard, prosecutors typically work hard to build a case that they can win. When, as here, the political motive is the start and end of the process, we’re seeing the birth of harassment by indictment. It’s a waste of everyone’s time. It also undermines the rule of law. When the government does not distinguish actual wrongdoing from political retribution, real crime becomes much harder to prosecute.

The Law of Artificial Intelligence

To understand what’s happening when artificial intelligence reshapes my clients’ industries (and my own legal industry), I’m studying the last big technological shift – the development of the consumer internet and how industries adapted – or failed to adapt — to the new technology. The internet changed quite a few industries, but really only broke three: retail, media, and the music industry. It was not immediate, but it was profound.

With respect to the media, assuming we put the rise of the internet at like 1995, the 30-year growth of the internet basically drained all the revenue from media and put it in tech, and we actually passed laws – the Digital Millennium Copyright Act – that allowed this to happen by creating a new set of rules that shielded tech companies from any liability from the content they published. That’s very different from the standards that govern traditional media, who can’t violate copyright or spread misinformation (defamation) without legal liability. And now most Americans get their news from social media. Oops.

The internet’s effect on retail is a lesson that tech moves fast, the law moves slow. It took us until 2008 to finally figure out that states could collect sales tax on internet sales, which had the effect of subsidizing e-commerce at the expense of brick and mortar stores (yes, there was a Supreme Court case on this). If you head to your local mall today versus what you remember from the 1990s, you will see the difference. The retail industry is buttressing AI by investing heavily in experiences and e-commerce. I don’t think there is much more that AI can do to retail now that e-commerce is so well established – AI will probably disrupt e-commerce more than it will brick and mortar.

And the music industry was broken by “peer-to-peer” file sharing where you could, basically, get your music for free from a “friend.”. We finally decided that this was copyright infringement in 2005 (yes, this also went to the Supreme Court). The music industry rebuilt itself around the streaming model, so that story actually has a happy ending, unless you happen to have worked in the music industry 20 years ago. As a side note, the music business is still on a tear on this issue. The Supreme Court will hear a case this term on whether internet service providers are liable for copyright infringement if they don’t take action against users posting infringing content.

The music industry and media, having been caught off guard by the last shift, are actively protecting their intellectual property now. The New York Times (and seemingly every other publisher and media company) are suing the big AI companies for copyright infringement. The big music labels – Sony Music, Universal, and Warner – are suing or have reached settlements with the AI companies that create synthetic (machine-produced) music. We don’t know how these cases will turn out, but the media companies are defending their turf against AI companies. We’re also seeing lawsuits trying to get AI companies to pay for the damage they do. We will see how that goes. I think in the next three years, we will have some pretty good ground rules on what the AI companies can do with other people’s property for free and where they need to pay the piper. That’s less than half the time it took during the internet revolution. Tech still moves faster than the law, but we’re closing the gap.

In terms of our ability to actually regulate AI, we’re basically in 1998. The federal government is actually toying with both a moratorium on new regulation and punishing states that push their own. But they really have nothing to worry about. The regulations on the state level are small-bore — New York just passed a “disclosure” statute that requires companies to tell users that AI is being used and that chatbots have a “protocol to take reasonable efforts for detecting and addressing suicidal ideation or expressions of self-harm expressed by a user.” I suppose something is better than nothing, but from the point of view of a lawyer who needs to advise clients on the impact of these laws on their businesses… it’s nothing. We see this type of lazy lawmaking when the tech is moving so much faster than the law and the regulators don’t yet have the technical ability to make good regulations.

There is lots of speculation about which industries are going to be caught pants-down this time. Management consulting? Legal? The tech industry itself? We’ve seen some evidence of layoffs in these industries as AI adoption spreads, although it’s too early to tell. From the perspective of the legal industry, as I’ve written before, the biggest barrier to AI is not technology but regulation, because only human lawyers can provide legal services to human clients.

Fractionally Legal: Jesse's Legal Newsletter

A Lawyer in Your Pocket

I bet when you read that headline, you assumed I was referring to the once-proud BigLaw partners who have climbed into the pocket of our would-be American autocrat. That is sad, as I wrote about in the last newsletter…

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a year ago · Jesse Strauss

I have no doubt that there will be productivity tools that use AI to make jobs easier – there already are – and they will cost money. I’ll spend money on that rather than human associates if it’s cheaper. That is interesting, but it’s not a profound change in how legal services are delivered. The more interesting issue is whether outside companies can own law firms in the U.S., which would mean there is much more money available to shift from humans providing legal services to humans, to computers providing legal services to humans — with the revenue going to tech companies, not lawyers. Sound familiar? That’s exactly what happened to the media over the last 30 years.

Perhaps the biggest similarity between this wave of tech-induced changes and the last is the speculation. When you hear the dire predictions of how we’re all going to lose our jobs or worse, you’re hearing people taking the bullish side of AI — investing long-term and hoping for a huge return. When you hear that this AI stuff does not really work and, even if it does, it’s only a small productivity gain, you’re hearing the bearish side of the argument — folks betting this is all a bubble. And that’s something that never changes, despite how profound the change in technology. The lesson? Technology moves faster than the law, but money moves faster than technology.

Keep thinking, keep building,

Jesse

Hi, and welcome to my newsletter! I’m Jesse Strauss, Your Fractional General Counsel. I’m a lawyer with a private practice based in New York City, helping clients in the United States and globally with their U.S. legal needs. My expertise spans various areas, including raising funding rounds, employment issues, negotiating master service agreements, intellectual property, compliance, legal process management, and dispute resolution. My focus is on founding and nurturing great companies from seed to exit. Discover more at Your Fractional GC and book a complimentary 30-minute consultation. You can also follow me on Threads @lawyerjesse1977, on BlueSky @lawyerjesse.bsky.social, subscribe to my Substack here (follow me on notes), and follow me on LinkedIn here.