Contractual Basis

Since I left my job at The New York Times in July, I’ve been working with a few companies in various capacities, and each of these relationships has in their own way required me to sign paperwork of some kind. Non-disclosure forms, independent contractor agreements, tax forms and the like.

The thorniest ones have been the contracts, which require not just my signature but a counter-signature too. This stuff typically comes to me via email attachments. I’ll print them out, initial each page and sign on the dotted line. Then I’ll run the whole document through my indispensable Fujitsu ScanSnap S1500M document scanner, which creates a PDF version in practically a blink of the eye, and send it back to the other party as an email attachment. If that party has scanning capabilities, then they’ll send me back a new PDF with their signature; just as often as not, they’ll have to put final copies in the mail or defer the handoff until we next meet face-to-face.

The Way They Did It in the 1900s

The whole process seems so archaic, I can hardly believe we’re still doing things this way in an age where even the I.R.S. prefers you to file your paperwork electronically. We have the means to transmit these kinds of authentications digitally and yet we seem resigned to doing things in an analog fashion.

Part of the problem may be that the most prominent of the solutions to this problem has been inelegant at best. Adobe’s Acrobat platform ostensibly allows digital signatures, but unfortunately, like many things Adobe produces, using Acrobat to sign documents is unwieldy. Except for a small number of very technically savvy folks, it’s not usually a viable option merely because not everyone has access to it. Even if they do, they rarely possess sufficient experience — or the wherewithal — to use it. I’ve owned Acrobat Pro for a decade and I don’t know how to digitally sign a document, and I can’t recall the last contract I received that was signed that way.

The New and the Unwanted

It would seem there’s a business here somewhere: imagine an independent Web site that performs a kind of escrow service for contractual agreements. The site serves as a repository for the contract documents, and allows two signing parties to verify their identities and then to assign their authorization to the contract in the form of a digital key or signature. There’s no exchange of Microsoft Word files, no scanning in of documents or sending faxes, everything’s done online.

A quick search on Google points to at least a few such services: Tractis, EchoSign and RightSignature, none of which I’d heard of before. I’m intrigued by them, but I also feel reluctant to use them with any of the parties I might sign contracts with in the near future. (If you use any of these or any other electronic signing services regularly, I’m very interested to hear about your experiences.) The process of closing a contract can be so tricky in and of itself that introducing an unfamiliar tool at just the point when both parties want to get on with the business at hand seems like a tough sell.

Like many digital innovations, this one is empirically superior to the old fashioned way yet still faces an uphill climb for adoption. If you think about it, there’s nothing inherently secure or authentic about a signed contract sent via fax, and yet we place a tremendous amount of faith in such authentications. Electronic signatures aren’t without their security issues, but it’s hard to argue that they can’t be more secure than hand-signed contracts. They’re just at a disadvantage because they’re unfamiliar.

  1. Khoi, I’ve been using PDFPen lately, which, while it only has a MacPaint style pen tool, does eliminate a bunch of steps from this process, and generally allows you to fill out PDF forms on your computer. Has been extremely useful in a number of instances.

  2. Hey Khoi, thanks for the tip about the S1500 yesterday :)

    When I joined Giga Om as a contributing writer, we used Echosign to complete and archive my contract agreement and complete US tax forms. Last year, NDA’s a contractor here in the UK using the same service without any issues.

    Just recently, Solvate also used Echosign to bring me onboard as a consultant.

    It seems its becoming an acceptable solution for UK and US dotcoms at least. Most lawyers have told me an Echosigned document is as good as an old fashioned paper signature.

  3. I’ve always thought PDFPen looks great and have wanted to get a copy for myself. But it only solves one half of the equation, I think. Right now it’s a hassle but not really a problem for me to electronically sign documents; what’s a hassle is to get the other party to sign electronically as well.

    One of these services I mentioned might help solve that. If a company decides to adopt EchoSign, say, then they can ask their contractors to use the service — problem solved. But if I, as an individual, want to sign a contract with BigCo via EchoSign, that’s a much tougher sell.

  4. Sure, of course. It’s actually less of a technology problem and more of a cultural shift for organisations.

    In the absence of a standard, you’d hope that organisations could accept any number of methods – just as you can shop with Visa, Paypal or Mastercard at any store, I’d expect to be able to use Echosign, PDFpen or whatever in creating that legal binding.

  5. I’ve had good experiences with EchoSign, but only between small size parties.

    Talking a large corporation into it can be difficult, depending on who has the leverage.

  6. At my company we’ve been using EchoSign for a little over a year now, and we’ve been quite pleased.

    One thing that really helps with EchoSign adoption is that you can configure your documents to support faxing. The document gets a special cover page and a fax number included on it. The recipient signs the document and faxes it back using the supplied cover page.

    Although there’s nothing particularly magic about the technology, the process feels magical the first time you use it. Your workflow is paper-free, even if the counter-party’s isn’t.

    If you’re emailing scanned contracts around already (as opposed to mailing documents), it’s a pretty short step to EchoSign.

  7. It’s one heck of an understatement, but I’ll say it anyway: I totally feel your pain. Some of the procedures I’ve seen for handling contract signatures have stopped just shy of constructing a pneumatic tube system just for delivery.

  8. It’s a good example of technological inertia where a less than optimal solution remains the standard because it works well enough. Couple this with the fact that a contract is often the first communication between 2 parties and it’s often easier just to go with established practices rather than suggesting a new and possibly better method.

    An all-in-one scanner/fax/printer costs around $100 these days. It’s not such a huge pain to sign, scan and email a document, particularly since you need to do it so rarely.

  9. I’ve used EchoSign several times, quick and seamless process. For companies that refuse to modernize, I have a handy Photoshop file with transparent layers of my signature and printed name. I import the PDF contracts into Photoshop, paste in the sigs, and batch export to PDF. A pain, but beats scanning anything.

  10. I’ve used to make an offer on a house in the past. That particular offer was declined but the process of signing the documents through the site was easy and fast.