Electronic Signatures – they do exist don’t they?

‘At last count, forty-nine states, the U.S. Federal Government, and the governments of over fifteen countries have enacted or are currently considering some form of electronic signature legislation,’ write Thomas Smedinghoff and Ruth Hill Bro, two knowlegeable lawyers at Baker & McKenzie. My question is: what’s the count on lawyers actually using electronic signatures in their practice?

The other day I heard a transactional lawyer explaining the nuances and complexities of various deals that she’s been involved in. She explained that she rarely needs to come to the office because the nature of her practice is so dependent on email and phone conversations. She said that it is rare for the parties to actually meet in one room to hash through changes and then formalize the agreement with signatures that they affix in each other’s presence. So how do they handle the signatures?

She said that the parties execute signatures on paper and then scan them to PDF and send them to the other side’s lawyers to hold in escrow until the deal is formalized. What about using electronic signatures, I asked?

Reading a digitally signed document is easy. Still when you read a digitally signed document you will encounter a new concept: signature validation. Well, maybe it’s not really new; but it seems new, or at least strange. Again, let’s talk about how it works in the world of paper.

‘We don’t do that,’ she said. Followed by ‘what are they exactly?’ Well, the long answer is contained in the aforementioned article on Electronic Signature Legislation. In that article the authors point out that:

‘electronic signature legislation can, and perhaps should, be designed and enacted to accomplish two goals: (1) to remove barriers (actual and perceived) to e-commerce, and (2) to enable and promote the desirable public policy goal of e-commerce by helping to establish the ‘trust’ and the ‘predictability’ needed by parties doing business online.’

Yes, those should be the goals. But I think it’s fair to say that legislation cannot remove the biggest barrier in the realm of electronic signatures: changing habits. Really smart lawyers do deals everyday, and they use cellphones, blackberrys, computers, and online collaborative workspaces. But somehow they can’t get their brains around electronic signatures. Why is that?

I suggest it’s because the act of signing a document is so simple, and so ingrained in our consciousness, that switching to a new mode that requires not only ‘technology’ but also ‘legislation’ is just too much for us. Imagine if technology and legislation were requird to do finger paintings. Not even the five year olds could handle that. And their minds are completely open to new ideas.

One day people will actually use electronic signatures (maybe around the same time we finally colonize Mars). But for now it’s fascinating to see how far they will go to preserve the ritual of affixing their scrawl to a piece of paper. I’m sure the cave painters in Lascaux weren’t eager to work in a new medium either.

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About the Author: David Fishel

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