The truth is that lawyers are being paid, whether it comes out of your pocket or mine. It's very generous but as a person who has never received a term sheet at all, one way or another I see it as turning another part of the process more opaque.
Actually, that's not entirely true. If lawyers bill inappropriate charges, you don't have to pay those charges. Inappropriate charges include excessive hours, administrative tasks, overhead, or other charges you disallow based on your agreement (commonly called Billing Guidelines). Based on data I've worked with (insurance companies, financial services company, real estate firms) those inappropriate charges are anywhere from 5-15% of the total. Usually 5-10%.
The advantage of having the VC pay the legal bills is that they are a bigger fish and can more easily put in place and enforce the legal billing guidelines. Also, as a much more likely repeat customer, the VC will likely get better bills to begin with.
What if I never have to pay another lawyer?