Sometimes innovation and legal automation can be about reusing what you already have and making it better.
So team echo.legal thought we would put pen to paper with a blog series on how to get the most out of automation by reusing your templates.
We’re kicking off by looking at the nettlesome challenges of signature blocks.
Content alert: contains some advanced document automation insights, so most relevant for those of you who, like us, geek out over these things!
The Challenge
Often in the context of legal transactions, the draftsperson needs to give careful thought to the manner of execution. Whether a single party or multiple parties, signature blocks will need to be tailored in several ways to meet legal requirements:
1. Document Type
Consideration will need to be given to the type of document that is being entered into, as the manner of execution will depend on whether the parties are completing the document under hand (a simple contract) or by deed. Whilst simple signature blocks will usually suffice for contracts under hand, the possibilities seem almost endless for documents executed by deed. In this case, the signature blocks will need to comply with the legally prescribed formalities for that particular party type - from the individual, the unincorporated body to incorporated legal entities with limited liability.
2. Party Type
Depending on the party type, there might be a variety of ways in which that party might execute a deed. Ensuring that the correct execution formalities are followed for that party type is critical to ensuring the validity of the legal instrument. For example, a company incorporated in England and Wales must execute a deed in one of 4 ways: by affixing its common seal to the document; by the signatures of two directors or a director and a secretary; by a director's signature that is witnessed or by an attorney in the presence of a witness. So signature blocks need to be carefully tailored both to i) the party type and ii) to the manner in which that party proposes to execute the document.
3. Jurisdiction
In the case of transactions where the governing law is other than the laws of England and Wales and/or foreign parties are involved, particular thought will need to be given to the impact of the governing law and the execution formalities on the parties' manner of execution.
4. Formatting and layout
Signature blocks can be fiddly and time-consuming to construct in Word. Ensuring alignment with other signatures and that a single block is prevented from splitting onto a new page are just some of the issues the author of the contract can face. Stylistically, often the wheel is reinvented with each separate template, with party names simultaneously emboldened and/or capitalised or not in each case.
A Solution
A lot of our customers automate their signature blocks which minimises frustrations, maximises recovery on billable time and increases brand consistency. Here's how
Setting up automation
By asking details about each party to the transaction in the questionnaire – party type, document type and jurisdiction for instance - a lot of the time-consuming, non-legal work can be removed. These questions are key to refining the range of signature blocks that could be required for a particular party.
We recommend that only the most commonly encountered entity types for the client/transaction type are catered for to avoid unnecessary over-automation. The user should also be asked whether the document is being executed under hand or by deed (if both options are possibilities). Depending on the selection made, the signature block(s) specific to a party's type for validly executing either a contract or a deed should be outputted in the generated document with each signature block incorporating, as a minimum, that party's name. Additional details such as signatory names and titles could also be added, if desired.
In automation terms, the selection of signature blocks for a particular party can be further refined by asking the user how that party proposes to execute the document, with the selection options tailored to that party's type. This will result in only the preferred signature block appearing for each party to the transaction, which will help streamline the preparation of the engrossed documents.
Dealing with unknown or overseas parties
If the preferred manner of execution is not known for a particular party or the party is foreign and the form of signature block requires further investigation, allowing the user to select "Other/Not known" and including an associated placeholder in the template, will remind the user to re-visit a particular signature block upon engrossing the draft document. Alternatively, all possible signature blocks could be outputted for a particular party where its preferred method of execution is not known but its type is known, enabling the client/counterparties to choose when the draft is produced.
Reusing the automation
Once a set of signature blocks has been created and perfected in a template, these should form the blueprint for all other templates that cater for the same party types. Copying and pasting the polished signatures into other templates will save significant development time and ensure stylistic uniformity between templates. It also offers users peace of mind that the correct signature is in place for the specific party type and its preferred execution method.
Perhaps think twice about using signature blocks that contain ")" on each line as these have become a relic of dated contract styles, aside from being rather tricky to align. If their use really cannot be relinquished, then signature blocks should be set up using tables to help fix the position of the brackets within the signature block.
Level up your templates
If there are multiple templates in a practice area that cater for the same set of party types, then it is worth developing a standalone "sub-template" that simply comprises the refined signature blocks and associated logic. Each template that relies on this standalone sub-template could then incorporate the relevant signatures through the use of "include" logic, replicating relevant signature blocks into the main document from the sub-template. This will make it easier to update the signature blocks in future, without the need to make many changes to the individual templates." or similar wording.
More widely, as the same entity types are likely to be encountered across different practice areas, signature sub-templates could be developed for use across multiple practice areas if the approach to variable naming conventions across practice areas can be standardised. In this case, automators could adopt generic variable naming conventions such as PartyName and PartyType as opposed to LandlordName and LandlordType, which will help facilitate the use of signature sub-templates at an inter-departmental level. In the long-term, this will result in time and cost savings and enhance stylistic uniformity and consistency of approach across the business.
Ninja-level automation!
Why stop at well-honed signatures for generic parties such as landlords, tenants, lenders and borrowers? Clients are likely to have an established way of executing documents and the preferred signature for each of those clients can similarly be captured in a standalone sub-template. So when the user selects the client landlord or lender in the questionnaire, for example, the preferred signature for that client is automatically outputted in the generated document. This will ensure that the correct signature for a particular client is used every time in a transaction, without the need for client consultation or the need to create it from scratch.
There are many ways to take your document automation to the next level and achieve even more consistency throughout your templates with a common "house-style" look and feel to standard clauses like signature blocks.
Get in touch with us discuss this or other ways your templates could be doing more.
Keep your eyes peeled for our next article in this series – reusing exhibits and appendices.