Growth of Electronic Signatures
It’s estimated that electronic signatures are used to settle 700 million transactions annually. DocuSign alone boasts 200 million users, adding 300,000 users every day, including most of the top financial, insurance, medical supply, and pharmaceutical companies.
But how many attorney-managed transactions are closed using electronic signatures? Our company, SimplyAgree, has spent the last year meeting with attorneys to try and answer that question–and the answer surprised us.
What About Attorney-Managed Transactions?
Electronic signatures have many advantages over handwritten signatures:
- Secure audit trails: documents and signatures are tracked and encrypted to ensure all transaction assets can be independently verified.
- Improved authentication: signatories can be identified using IP address, geolocation, multi-factor authentication or knowledge-based authentication.
- Efficiency: documents can be executed in a fraction of the time of handwritten signatures.
- Convenience: parties can execute agreements from wherever they are, on a laptop, phone or tablet, without the need for a printer or scanner.
- Enforceability: electronic signatures are treated the same as handwritten signatures to satisfy signature and writing requirement.
Given all the benefits of electronic signatures, you may be surprised to learn how rare it is for attorneys to use electronic signatures in their practices. In our survey of more than 200 transactional attorneys in Am Law 100, Am Law 200, mid-sized firms, and boutiques, we found less than 10% of attorneys regularly use electronic signatures on their transactions.
This seems paradoxical. How is it possible that the average individual can use electronic signatures to buy their first home while crucial signatures for a merger valued in the hundreds of millions of dollars is most likely still being signed using handwritten signatures and collected via email–foregoing all the additional security and authentication of electronic signatures?
Why Traditional Electronic Signature Services Fall Short for Transactional Attorneys
While traditional electronic signature services have focused on general business use cases, few have considered the unique challenges faced by transactional attorneys. For example, transactional attorneys often have to distribute signature pages to be signed days ahead of a closing to ensure all necessary signatures have been executed and collected before important transaction deadlines.
Traditional electronic signature services prohibit attorneys from making changes to documents, regardless of whether those changes affect the substance of an agreement (e.g. revising an individual or entity name, updating an address on a schedule or adding an effective date for a transaction). They also make all signatory actions permanent, meaning if a signatory makes a mistake, the agreement must be redistributed to be re-signed by all other parties. This would create unacceptable delays for complex closings.
How SimplyAgree Is Bridging the Gap
As deal lawyers, we created SimplyAgree to bridge the gap between traditional electronic signature services and the ways attorneys actually approach their deals.
Knowing that most attorneys still close transactions using handwritten signatures and many transactions still have original signature requirements, we built our platform with robust support for handwritten signatures while also making it easy for transactional attorneys to start adopting electronic signatures for particular documents, signatories, or transactions.
Whether using handwritten or electronic signatures, SimplyAgree uses workflow automation to significantly streamline the closing process–from the creation of signature packets to the compilation of fully-indexed closing binders. Attorneys can be up to five times more responsive in producing closing assets while increasing bandwidth for associates and reducing write-downs on work that clients don’t want to pay for.
With SimplyAgree our goal is to resolve the electronic signature paradox for attorneys once and for all.