This post is part of our First Year Associate series, where we’ll provide explanations to simple issues faced by first year corporate associates. We’ll focus on the basic problems that you might be embarrassed to ask a senior attorney. And if you already asked, the answer was so brief it provided just enough context to bring you here.
The Escrows — Part I of III
Let’s set the stage. You are working on one of your first deals as a corporate, commercial finance or real estate associate at a law firm. You’ve created signature packets (mostly for a number of documents that you don’t have much meaning to you yet) and had them signed by your client. The partner or senior associate asks you to email your client’s executed signature pages to opposing counsel, but adds, “make sure to send them in escrow.”
What it means to send signatures "in escrow"
If you haven’t done this before, the request may sound complicated—but don’t worry, it doesn’t get much more straightforward. What the senior attorney is asking you to do is to make sure that opposing counsel is made aware that they are not authorized to attach these signed signature pages to the underlying documents. Instead, you are providing opposing counsel with reasonable assurances that your client has provided signatures to all the necessary documents to close the deal. As you’re probably suspecting, you’ll also want reasonable assurances that opposing counsel has the signatures required to close, so you should also expect to receive their client’s signature pages (also held in escrow).
When it comes time to close the transaction, parties will authorize the “release” of their signature pages—this means that they can now be attached to the final versions of the deal documents. This typically occurs verbally on a closing call or sometimes via an email circulated to all parties involved in the transaction.
How do I actually send signatures "in escrow?"
Now you’re probably wondering how you actually go about sending signature pages to someone “in escrow.” There’s not an app for that, but fortunately there is no magic to it—just attach the signature pages and include language suggesting as much in your email. For example:
Attached are the executed signature pages for Jane Doe, XYZ Company and ABC Corporation, each to be held in escrow pending release by their respective parties.
And with that, you’ve successfully sent signature pages to be held in escrow.