Most companies today use the internet to conduct at least some part of their business. We’ve become accustomed to the speed of online communication and the resulting instant gratification. Even our phone messages and faxes can come through email now.
But when it comes to signing contracts and closing deals, many of us stick to the old way of doing things on paper. FedEx or meeting in person to sign the documents is the final step, or at least faxing and then mailing the originals. Part of this is habit, but after all, a real ink-on-paper signature is more legally binding – isn’t it?
Not necessarily. Digital signatures have been around for a while now – Adobe Acrobat, among others, offers the capability to digitally “sign” documents using encryption technology and public key infrastructure to ensure that a document has not been altered since it was sent and to verify the signer’s digital identity.
EchoSign is another company offering this technology, but taking it several steps further to by offering a centralized workflow system to manage your contracts or other documents requiring digital signatures. Through their website you can track what’s out for signature, what’s been signed, when and by whom.
Companies using electronic signatures efficiently can cut down on processing time for contracts and other important documents, speeding up their sales cycle significantly. One EchoSign customer, Real Content Group LLC, cut processing time for new agreements from 3 weeks to 2 days and is now signing 4 times as many agreements as before.
We asked EchoSign CEO Jason Lemkin to answer a few questions about electronic signatures, which he believes are “at a tipping point of mass adoption, much like digital photography was in 2001”.
If email is considered “legal” in court would the need for an electronic signature decrease?
Email may be deemed a “legal” agreement in some cases, but does not meet the standard of the U.S. E-SIGN Act. That means it is NOT deemed the same as a written signature. If you rely on email, it may be legal – but you won’t know the status until you take it to court. The E-SIGN Act gives you 100% confidence that something you sign that complies with the Act is deemed the same, under law, as a written signature.
What about the businesses whose partners might not accept electronic signatures or even know they are valid?
Firstly, we’ve found that across our 600,000 users, the signers are so happy to be able to sign in seconds, and not need a fax or FedEx, that the issue is small. Having said that, EchoSign uniquely provides an answer – if a signer is for any reason not comfortable with an e-signature, they can click a link and fax the document back instead “the old way”.
Should every business consider electronic signatures or is it more valuable to those who are actually processing a lot of manual signatures?
Every business that needs a contract to close business should consider electronic signatures. You will close more business if you make it easier for your customers to do business with you. However, if you do not need a signature to close business, then the benefits for other uses (HR, compliance, etc.) are generally of less value unless the volume of signatures are high.
How secure are electronic signatures compared to traditional signatures?
Universally agreed to be more secure. E-signed documents cannot be altered (unlike written documents).
Are there any benefits to a manual signature or situations where a digital signature just wouldn’t work?
Yes. The #1 benefit is for “unstructured documents” where you need to do something more than just sign, or fill out fields and sign. For example, transactions where you need a copy of a driver’s license or passport to process cannot be done with just an e-signature. EchoSign allows you to combine e-signatures and faxes to take care of these cases. #2: The other obvious case is in person transactions – signing in the same room. While there are some benefits to e-signing in person, they are lessened. E-signatures are most valuable when the parties are remote.
Laura Leites, Assistant Editor, Smallbiztechnology.com