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Live Chat 3 - April 3

The following is a summary of the VBA's third COVID-19 Law Practice Live Chat conference call, held April 3, 2020.

The call discussed PPP loans, electronic signatures and e-notaries, employment updates related to the CARES Act, ethical responsibilities of attorneys leaving law firms or law firms disbanding, and wellness resources. Highlights from the call follow.

The VBA will hold calls at 10 a.m. Fridays in the near future to continue to address member concerns. RSVP on the event pages found in the VBA calendar.

Please note: The information provided below does not, and is not intended to, constitute legal advice; instead, all information, content, and materials shown below are for general informational purposes only. This information may not constitute the most up-to-date legal or other information.  Any links to third-party websites are provided for the convenience of the reader, user or browser; the VBA and its members do not recommend or endorse the contents of the third-party sites.

The views expressed here are those of the individuals taking part in the call and authors writing in their individual capacities only – not those of their respective employers, the VBA, or committee/task force as a whole. All liability with respect to actions taken or not taken based on these contents are hereby expressly disclaimed. The content on this posting is provided "as is"; no representations are made that the content is error-free.

Paycheck Protection Program

The latest interim final rule about this forgivable loan program through the Small Business Administration was issued April 2 and the program was to begin accepting loan applications April 3. Applications can be made through June 30, 2020, or until funding runs out. The program will provide bank loans of up to $10 million each for entities with fewer than 500 employees based on 2½ times the average monthly payroll costs for the past 12 months, minus the amount over $100,000 in salary to employees. The interest rate for these loans will be 1%. The principal and interest can be forgiven. Find the interim final rules here.

Law firms under 500 employees are fully eligible, provided they fall under the rules that set eligibility for the program.

No personal guarantee or collateral need be put up. Applicants must go online and get a guarantee number. Some people reported that the SBA website keeps crashing because of extraordinarily high traffic.

The application is just two pages. It is SBA Form 2483. The instructions to fill out the application are another two pages. Find both under the Financing area on the VBA’s COVID-Resources page. For the loan to be forgivable, the money can be used only to cover payroll and benefits, rent/mortgage payments, utilities, debt interest or refinancing an SBA EIDL loan made between Jan. 31, 2020, and April 3, 2020.

Some lenders reportedly decided they would not start accepting loan applications until their liability concerns from other parties involved with the loans could be addressed. Any federally insured lender can make loans – even if the lender does not write loans in the normal course of business.

Some VBA members on the call said the lenders they contacted reported that they would process these loans for existing customers only.

Electronic signatures

Two types of signatures are permitted: electronic signatures and digital signatures.

Virginia law recognizes e-signatures, but to be valid the parties must agree to conduct the transaction digitally. A separate agreement to treat the underlying agreement digitally should be in place in the agreement and it must be explicit and agreed to before e-signing. Put the consent upfront, including whether any post-execution arguments or changes also can be handled electronically.

Under Virginia Code, there’s no specific form for verifying a copy of a wet-ink document. Electronic signatures can be typed or added with a stylus or finger to show the signer’s intent to sign the document and commit to it.

Digital signatures are a subset of e-signatures. Various companies provide algorithms that provide security for unique signatures. Some on the call asked whether these companies gain access to the document or just to a confirmed signature, for ethical considerations. This is something that should be addressed with any company securing a signature.

For wills, trusts, advanced medical directives and some real estate documents, in-person witnessing and signing is generally required. With the pandemic, there may be changes coming in what is an acceptable witnessed signature. The Virginia State Bar provides the following guidance

Must a will be witnessed? Must it be notarized?
In Virginia, the signing of a will must generally be witnessed by two competent persons, who also must sign the will in front of the testator. (An exception to the witness requirement is made if the testator writes out the entire will in his or her own handwriting and signs and dates it.)
Although the law does not require a will to be notarized, it is a highly recommended practice followed by most lawyers. If the will includes a notarized “Self-Proving Affidavit,” the will is presumed to be properly executed and is accepted by the court without testimony from the witnesses.

Electronic notaries

Remote online notaries can perform notarization without being in the same room as the signer. A smaller number of notaries with this certification exists. Some callers noted that there is a shortage of these notaries in Virginia and that the process of getting certified is slow.

Both participants must have a personal computer with a camera, audio and speakers and the notary must record a video of the proceeding.

Various states are attempting to address the remote notarization through various means in light of the inability to visit nursing homes for wills and related documents, without making changes that could open a Pandora’s Box after the pandemic passes. We don’t have all the solutions yet.

COVID-19 employment information

Steve Brown, chair of the VBA Labor and Employment Law Section, reported on critical areas on the employment front.

He referred to temporary rules regarding paid leave under the Families First Coronavirus Response Act, which on April 6 was added to the Federal Register.

For the information employers seeking tax credits must obtain, he pointed to the answer to question 44 in the IRS FAQs from March 31: How Should an Employer Substantiate Eligibility for Tax Credits for Qualified Leave Wages?  

Ethical questions

Jim McCauley, ethics counsel at the Virginia State Bar, said the VSB is starting to get inquiries related to staff reductions, furloughs and layoffs and what the ethical requirements are regarding communications with clients. He referred attorney and law firms to Rule 5.8 in the VSB Professional Guidelines.

Wellness Initiative

Margaret Ogden with the Virginia Lawyers’ Wellness Initiative reminded listeners that the Virginia Judges & Lawyers Assistance Program, with new funding this year, has a full-time staff of five and has created virtual support groups to help legal practitioners in crisis.

Self-help resources also are available online.

A page of options is available in the Outlets for Attorneys and Wellness area of the VBA's COVID-resources page.

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