What’s Behind the Rapid Adoption of E-Signatures

In this issue, Law Practice Today introduces “The Practice,” a column exploring developments affecting the practice of law and those work in and with law firms. Topics explored will provide insight and answer questions our readers need to know to keep informed and their practices competitive.

Our goal in spotlighting trends and innovations is to help our readers prepare for the future and remain competitive. We hope you enjoy The Practice and the practical information it provides.

Electronic signatures are becoming increasingly more popular. Law firms that incorporate the technology into their business models achieve positive results by saving time, money and resources.

In this month’s discussion, electronic signature experts look at how e-signature solutions fit into a law firm’s workflow, the measurable results of adoption, its effect on billable hours, and the barriers to more widespread usage.

Our Moderator

Nicholas Gaffney (NG) is a veteran public relations practitioner in San Francisco and a member of the Law Practice Today Editorial Board.

Our Panel

Why do law firms need to start using electronic signatures if they have not already?

DP: Quite simply: it’s going to make everyone’s job easier. Most lawyers have better things to do than try to chase someone down for a signature. Combine that with clear legal support for their use across a wide range of transactions under ESIGN and UETA, and using them becomes a slam-dunk proposition. Finally, every lawyer knows the pain of trying to reference an agreement that has been faxed so many times it resembles a Rorschach inkblot test or has been left in a desk drawer somewhere. Electronically executed agreements are traceable, full text searchable and highly legible. This makes your contract archive both a really reliable reference as well as an excellent source of language one can pull from in creating new agreements.

MA: In the legal industry, client relations are of utmost importance. The ease, convenience, and normativity of e-signatures will inevitably make them a necessity to maintain client relations. By using electronic signatures, firms are able to grow their client base while efficiently maintaining the work required by preexisting client matters. While traditionally the industry is monetized by the billable hour, using electronic signatures saves administrative time allowing firms to allocate resources towards the intake of new clients and keeping current clients happy.

DB: E-signatures help law firms get important and time-sensitive documents like contracts and retainer agreements signed online very efficiently. By streamlining routine paperwork, firms can reduce administrative hours and eliminate the expenses of printing and shipping signed documents. Even more critical: e-signatures create a secure electronic record containing signer identities and document version, greatly reducing liability for law firms.

ML: Law firms are a business like any other, and businesses benefit tremendously from adding e-signatures—the speed to close contracts increases while risk associated with missing signatures, information or paperwork decreases. At the same time, clients get the convenience of anytime, anywhere, any device signing. E-signatures are so much more than simply replacing a “wet ink” signature—they also identify and authenticate the signer, tamper-seal each signature as well as the entire document, and securely deliver the document so the entire process is more reliable and secure than paper.

One of the biggest endorsements we’ve heard legal counsel share has been that judges like the simplicity of e-signatures, especially with eSignLive, which offers a visual audit trail that captures in-depth signing data and shows exactly what screen was shown when and for how long—this is far more evidence than the paper equivalent provides.

RD: DocuSign helps law firms and legal departments improve document automation and efficiency while setting high standards for compliance across their business. Law firms and legal departments are embarking upon digital transformation with DocuSign to drive these benefits and significantly streamline and speed the client experience.

How does your e-signature solution fit into the workflow of a law firm?

DP: Most lawyers are very familiar with Acrobat. Adobe Sign is built right into Acrobat. So now when you finalize a document, it just takes a couple of extra clicks to send it out for electronic signature. Think about how much simpler and greener that is than printing and overnighting an agreement and then endlessly following up with the client or opposing counsel to make sure everyone signs. With Adobe Sign, you can simply visit your contract management page and instantly see the status of every contract that is out for signature.

MA: Ease of use and integration are top of mind in the design of our product. We know first-hand that the legal industry is fast-paced and cannot afford to spend significant time in adopting technology. Consequently, our solution integrates seamlessly into a law firm’s workflow as well as other third-party applications including various document management systems and docketing solutions.

ClientSide makes e-signatures even more useful for law firms by coupling it with other time-saving tools; namely our form functionality. This feature enables law firms to save templates of forms and documents they send often, thereby streamlining the process of sending out documents for signatures.

With the time-saving features and intuitive design of both the e-signature and form tools, law firms see immediate improvements in efficiency. The firms also display an awareness and prioritization of client convenience by enabling clients to sign documents from anywhere, anytime. All the while, the ClientSide team provides complete training and support to ensure that law firms see these improvements without the additional learning curve.

DB: RightSignature fits any time a firm needs a document signed. Firms use RightSignature most commonly with new client documents like engagement agreements and questionnaire forms. We offer legally binding e-signatures as outlined by the E-SIGN Act and UETA in the U.S. and similar laws internationally, that firms use for affidavits, HR paperwork, invoices, and more.

ML: eSignLive is easily integrated into a law firm’s workflow, whether starting the contracting process from our web-based solution or using eSignLive connectors for a firm’s CRM, like Microsoft Dynamics, or ECM system, like SharePoint. From there, documents can be pushed for signing on any device—web, tablet, or smartphone—and then securely returned to eSignLive or the firm’s cloud storage solution. All this eliminates the need for firms and their clients to print, sign, scan and email a document back, keeping the entire process digital and secure.

RD: DocuSign’s eSignature solution and Digital Transaction Management (DTM) platform automates and streamlines legal firm and department workflows. Given that contracts and forms are at the core of a legal firm’s practice, improvements in how these are delivered, completed, signed, and tracked have a clear and measurable impact on the firm and the client. From the completion of simple NDAs, to faster board minutes, to the most sophisticated multi-party contracts, DocuSign delivers a better client experience, quicker time to completion and a clear audit trail for compliance purposes.

What kind of measurable results can a firm expect from implementing electronic signatures into their process?

DP: One of the biggest benefits of implementing e-signatures in a firm is an increase in productivity and efficiency—two things that can directly affect a firm’s bottom line. The Adobe Legal team works with the powerful combination of Acrobat DC and Adobe Sign to implement an end-to-end electronic workflow. By consolidating workflows and implementing Adobe Sign, the Adobe legal team enabled the procurement team to reduce contract completion time by 73%. Implementing an end-to-end electronic workflow allows you and your employees to focus on providing more value to clients—rather than paperwork.

MA: We conducted a study to calculate the ROI of using electronic signatures in a law firm. We found that, on average, a firm saves eight hours per administrator per month on administrative signing tasks by using our solution. Further, we found that firms send and receive signed documents up to seven times faster using ClientSide. By saving time and resources on document and signature processes, law firms are able to focus more on the intake of new clients and expanding the scope of their business.

DB: Most firms experience a huge savings by getting rid of time spent chasing incomplete paperwork, as well as a significant reduction in printing and shipping expenses. Combine RightSignature with a broader paperless initiative, like Verdin Law did, and you could see the same kind of results that they did—100% growth for three years in a row, with profit margins above 40%.

ML: Most businesses see the time to close contracts speed up; instead of weeks, document signing takes just days or even minutes with e-signatures. Law firms can also expect better visibility into the progress of contract signing via a dashboard in eSignLive, which shows which documents are waiting to be signed by whom. From a litigation perspective, e-signatures can keep client organizations out of court and are invaluable in terms of helping ensure regulated processes like loans and mortgage processes stay compliant with federal and state regulations.

RD: On average, DocuSign customers save $36.44 per document over traditional paper methods (reduction in printing, faxing, scanning and overnighting documents; elimination of errors resulting from the manual re-keying of data in paper documents, etc.). Rather than the days or weeks that paper documents can required for contract execution, 84% of documents are completed with DocuSign in 1 day or less; 62% in 1 hour or less; and 51% in 15 minutes or less.

What is the effect of e-signatures on law firms’ billable hours?

DP: Last fall we surveyed more than 300 legal professionals in the U.S. to find out how they view and use technology, and discovered that more than half of legal professionals surveyed have had to wait 24 hours or more for someone to physically sign a document in their office, and a fifth of legal professionals have missed an important revenue deadline because they had to wait for a hand-written signature. Implementing electronic signatures across your firm will cut down on wasted time considerably.

MA: We recognize that traditionally, the legal industry is built on the billable hour. However, we believe that a law firm’s revenue is sustained by providing the best client experience. In using electronic signatures, clients have confidence that their attorneys are utilizing the most efficient administrative technology and have peace of mind that their attorneys are cost-effective with their budgets. With these factors in mind, clients are happier, which translates to repeat business. This repeat business, rather than minor gains in billing for document and signature management tasks, is what enables law firms to grow and flourish.

DB: E-signatures help firms maximize the profitability of billable hours by reducing the amount of admin support required for each attorney billable hour. Attorneys and admins both enjoy a reduction in time spent on menial tasks like sending signature requests, following up on unsigned documents, and filing and sorting completed documents.

ML: E-signatures free up valuable time from being spent on administrative activities like chasing contracts or printing, scanning and filing.

RD: E-signatures and Digital Transaction Management accelerate workflows and lower the cost of administrative tasks. Costs savings come from both reduced time handling paper contracts by the team and the hard costs of paralegals not needed to compile paper documents. With DocuSign, law firms and lawyers can focus on higher value activities for their clients, thereby providing greater impact to their clients’ businesses to drive increased satisfaction and loyalty.

What do you believe has been the biggest barrier for widespread adoption of electronic signatures in law firms?

DP: We found that 87% of legal professionals who took part in our survey cited that it is important to adopt new technology to get their jobs done efficiently and nearly 70% of respondents thought the legal industry overall is resistant to technological change. And 53% view the lack of partner/senior management support as one of the biggest inhibitors. That being said, attitudes seem to be shifting as new technology makes way for digital progress across the board—32% of lawyers using e-signatures today only started within the past year, so it seems that the legal profession’s perceived reluctance to change is evolving.

MA: It is no secret that the legal industry is resistant to change, and tends to subscribe to the ‘if it’s not broke, why fix it’ philosophy. This seems to explain their lag in adopting electronic signatures. The fact of the matter, however, is that the legal industry is based on client relations, and clients are coming to expect the ease and convenience of electronic signatures. With the rise of this client preference, law firms will soon have no choice but to adopt.

We’ve also seen that this fear to adopt is exacerbated when firms try to adopt solutions from the larger e-signature players and fail. In finding that those solutions did not meet law firms’ unique needs, these lawyers and their colleagues become apprehensive of e-signatures in general. This is where ClientSide is different—our solution is designed to fit directly into law firms’ current workflow, allowing for easy adoption among all level of tech savviness. The lesson here seems to be that law firms will require an electronic signature solution, but not every electronic signature solution will suffice.

DB: The biggest barrier is inertia. Many law firms are appropriately skeptical of new tech solutions, and need to be convinced that the time they take to adopt and learn a tool will pay off. RightSignature is making great strides thanks in part to our partnership with the American Bar Association, but there’s still a significant opportunity for forward-thinking firms to streamline their workflows and get a leg up against their competition by implementing e-signatures.

ML: The law profession can be risk averse and largely reliant on paper processes, which can slow it down. But successes paved by other regulated industries, such as financial services and government, have led to legal firms taking a serious look at e-signatures and other digital-enabling technologies to transform the way legal professional manage and sign contracts.

RD: The perception of where the greater risk truly is—is it in the paper or digital realm? The comfort level has been with paper as that’s where the history is. However, attorneys are increasingly looking at digital transformation as a tremendous asset and one that has an ability to empower and advance the business forward while actively reducing risk. With industry-leading standards of enforceability, including robust authentication, encryption, tamper-seal certificates, chain of custody, and a non-repudiable audit trail, it’s actually more of a risk to continue transacting business with pen and paper versus switching to DocuSign eSignature.

What percentage of law firms do you expect will be using e-signatures by the year 2020?

DP: E-signature adoption is increasing at breakneck speeds across all industries and law firms are not far behind. We at Adobe are also doing our part to help define global standards for e-signatures with the creation of the Cloud Signature Consortium. The consortium is a group composed of leading industry and academic organizations committed to building a new open standard for cloud-based digital signatures across mobile and web that comply with the most demanding electronic signature regulations in the world. I suspect as we work toward creating and implementing a global standard, more and more law firms will start using electronic signatures and to that end, I hope 90-95% of firms will adopt them in the next five years!

MA: We predict that in the next four years, 65% of law firms will be using electronic signatures. The legal industry is at this interesting transition point where the older, more technology-resistant partners are slowly making their exit, and there is a corresponding rise in the technology-savvy younger partners. We are also seeing this same sort of transition with their clients. Currently, only one-third of Fortune 500 CEOs are Gen-X or millennials, but this number is quickly climbing. E-signature technology is an expectation for this clientele, who use it themselves in their business and personal lives. Because of the shift of power in both the legal and business spheres, we anticipate a rapid rise in law firm adoption of electronic signatures in the next few years.

DB: By 2020, we see 70% of law firms using e-signatures. Given how quickly we’ve seen RightSignature become a household name in document-heavy practices like insurance and accounting, it won’t be long before most law firms are using e-signatures as well.

ML: With the trend toward digitizing business processes, especially to enable convenience and anytime, anywhere transacting groups like Millennials demand, e-signature adoption has spiked significantly in recent years. In fact, Forrester Research forecasted 53 percent annual growth between 2014-2017 and eSignLive has grown at three times that rate. Consumers expect this technology and as it is progressively integrated into other platforms, like CRM, ECM, contract management or online authentication and trust platforms, law firms will continue to adopt e-signatures.

RD: Given the compelling benefits of going digital across law firms and in-house legal teams, we expect nearly all firms—95% or more—to be using e-signatures by 2020. Those that aren’t will struggle to compete as others surpass them in operational efficiency, cost, security and compliance, and perhaps most importantly, client experience.