On Lawyers Getting with the Technology Program

September 26th, 2007

Dave McClure posted a rant the other day about how VCs and technology lawyers spend a lot of time around startups, but rely on antiquated communication systems (fax!) to do deals.

He’s right, but what’s interesting to me is *why* “[we] guys are still in the 80’s”. Digital signatures are perfectly legal, but no one uses them.

I think the reason is that everyone spends so much time thinking about the deal itself, that no one puts much effort into the mechanics of completing it. Fax mostly works because most people have fax machines.

On the flip side of the coin, in just about every deal I’ve ever done I have ended up chasing someone for a signature. Someone is inevitably travelling or not near a fax machine. Internet access is so ubiquitous- I would love to have a “virtual closing room” on my website where people could log in and digitally sign documents. This would save a huge amount of time and energy on my part and presumably everyone else’s.

It takes two sides to close a deal, though, which is probably the other big reason things like this haven’t taken off. To do it right, I would have to (a) provide each party to the deal with login information and a way to authenticate individual identities, or (b) somehow coordinate my digital signatures with the other side’s, or some combination thereof.

It’s worth a try, though.  Can anyone tell me how to build such a facility?

  • Hi Jay,

    I saw your post on techcrunch about this and I thought I would let you know that you can do what you want right now at Middlepost.

    “(a) provide each party to the deal with login information and a way to authenticate individual identities.”

    You can invite everyone that needs to be involved in the document (Observers, Approvers, and Signers) into the document space on Middlepost. From there, people can read, review, upload revisions, comment, and when everyone is happy, sign it.

    “(b) somehow coordinate my digital signatures with the other side’s, or some combination thereof.”

    Both sides (or even if there are several sides involved) access and sign the same document so it’s inherently coordinated. Also, after a document is signed and completed, we lock it and store it for a minimum 7 years so nobody can change the document and any side can come back and find the document at a later date.

    Please feel free to contact me if you would like to discuss.