PARADIGM SHIFT
THINK E-INK
Pen and paper signatures?
Such madness must cease!
By D. Casey Flaherty
Pen and paper is an inferior option for
executing legally binding agreements. Yet
a recent study commissioned by Adobe
Systems Inc. found that 98 percent of surveyed managers “still rely on hard copy in
the ‘last mile’ to deliver contracts to get clients and customers to sign on the dotted line.” Such madness needs to cease.
Electronic signatures is an idea whose
time has long since come.
Consider two recent legal events:
» Missing and unauthenticatable documents were at the heart of mortgage
lenders’ $25 billion settlement with the
Department of Justice.
» The Los Angeles Dodgers baseball
team was found to be community property because a lawyer accidentally had
a couple execute different versions of a
marital property agreement.
Paper and e-documents are sources
of unrelenting frustration. Yet both pale in
comparison to the sieve of human memory. As criminal justice researchers long
ago concluded, the perceived credibility of circumstantial evidence and eyewitness testimony is inversely related
to its respective reliability. People recall
with unshakeable confidence that which
never happened. Memory is in a constant state of revision by its self-interested
author, the human subconscious. People lie about everything, for reasons vile,
venal, noble, petty, and inexplicable. The
real fun comes when the three converge:
lawyers get rich attempting to fill gaps in
the paper record.
Contracts exist primarily for when
things go wrong. It therefore helps to have
the contract and to be able to avoid disputes about the content or execution
thereof. Executing in hard copy substantially increases the likelihood that a contract will be lost or that the parties will disagree about who executed which version.
E-signatures mitigate many of these
issues. Before I converted my internal clients to e-signatures, executing contracts
was a daily struggle, trying to coordinate numerous signatories in varied geographic areas, under tight deadlines.
With so many steps, the execution process too frequently goes wrong. Problems include finding a printer, scanner, or
fax; hHuman error intrudes with outdated
addresses, inaccurate fax numbers,
missing pages, forgotten exhibits, printing of the wrong version, etc. Even when
the process goes right, much is sacrificed
at the altar of expedience.
E-signatures fix much of that mess.
One person can now upload one copy
of the contract and route it for signature.
The signatories can still print the contract
out, if that is that their preferred method
of review, or forward it for input (e.g., from
their lawyer). But the actual signing takes
place online. Upon completion, an iden-
tical, verified, secured copy of the exe-
cuted document is automatically placed
in a central repository, as well as and
emailed to each signatory and cc (e.g.,
staff and lawyers). The executed docu-
ment includes an audit trail with the rout-
ing information, email addresses, and IP
addresses of the signatories.
