Electronic Signatures for Lawyers: All You Need to Know

Lawyers used to deal with heaping piles of paper. This paperwork cost clients and law firms money and introduced unnecessary delays in providing legal services. But over the past 30 years, electronic signatures have become common in everything from software license agreements to court filings.

Using an electronic signature for lawyer work can provide key benefits to lawyers and clients and prepare your office for a paperless future.

What Is an Electronic Signature?

Contract law teaches that a binding agreement requires mutual assent. This guideline allows for the enforcement of oral contracts and agreements involving implied consent.

These principles apply to e-signatures. An electronic signature includes any type of electronic data that signifies assent, including:

• Clicking an accept button;
• Checking a box;
• Typing a name at the end of an email;
• Writing a signature on a touchscreen;
• Entering biometric data, such as a fingerprint, through a scanner.

The same principles apply to electronic signatures as apply to pen-and-ink signatures on paper documents, also called “wet signatures”. As long as the assent is given willingly, it does not matter whether someone signs their name, draws an X, or says, “Okay”. These actions all manifest assent to the terms of the agreement.

The skepticism about electronic signatures comes not from whether they manifest assent. Instead, they come from the following concerns:

• Who signed the document?
• What was presented to them when they signed?
• Was the signature faked or altered?

In other words, there is no dispute as to whether an electronic signature constitutes a signature. Instead, the legal issues surrounding electronic signatures come from concerns about verifying the identity of the signer, along with the potential for data tampering.

Electronic Signature vs. Digital Signature: Are They the Same?

Digital signatures were created to address these security issues. A digital signature is a type of electronic signature. However, digital signatures include an additional element to verify their authenticity.

Sometimes this takes the form of an encrypted key. For example, in one type of digital signature, the signer’s software encrypts an e-signature with a private key to create a digital signature. The recipient can access the signer’s public key to decrypt the digital signature and verify that the signer created it.

This explanation gets deep into the technical details of digital signatures. Lawyers and law firms usually only need to know the following:

• Electronic signature software generates a unique user certificate to create a secure digital signature for that user;
• This secure signature verifies who signed an electronic document as well as other details, such as when it was signed;
• The secure signature gets attached to the document so it cannot be copied or cut and pasted into another document.

This process makes digital signatures more secure than wet signatures in many situations where you or your client might have concerns about fraud.

What Are the Benefits of Using E-Signatures for Lawyers?

Using e-signatures on signed documents can bring significant benefits to clients and law firms.

1. Speed

In the past, you had to send printed copies of contracts to a party for an ink signature. After signing, you had to wait for the party to send the signed copy back. This process was time-consuming.

With electronic signatures, you can email documents and receive signatures in minutes.

2. Convenience

Collecting an e-signature is easier than collecting a handwritten signature. You do not need couriers or delivery services to carry legal documents. More importantly, you and your clients do not need to manage a storeroom full of signed contracts.

3. Costs

In addition to the costs for paper, envelopes, and postage, traditional documents came with indirect costs for printer toner and storage. Additionally, all those printed documents burdened the environment.

Are E-Signatures Legally Binding?

Electronic signatures are as legally binding as printed signatures. In other words, e-signatures are valid under the same conditions that handwritten signatures are.

In most cases, the federal Electronic Signatures in Global and National Commerce (ESIGN) Act prevents parties from challenging a signature on commercial documents simply because it was generated electronically. This act protects both businesses and consumers from situations like buyer’s remorse, where a buyer tries to back out of a contract by saying their signature was invalid because it was electronic in nature.

The ESIGN Act does not affect substantive contract principles like duress. Electronically signed contracts have the same defenses in these situations.

What Makes an Electronic Signature Binding?

With the exception of New York, 49 states have adopted the Uniform Electronic Transactions Act (UETA). These laws set the standards for documents signed electronically.

Under both the ESIGN Act and UETA, all parties need to know and consent to sign documents electronically. Additionally, the signature must:

• Identify the signer;
• Manifest the signer’s clear intent to sign electronically;
• Show the signer’s assent to the terms of the agreement;
• Provide an independent method to verify the signer’s identity.

For example, electronic signature software requires the signer to create an account using an email address. The signer must read and agree to the terms of the account, including acknowledging that signatures created and fixed will be legally binding.

The document will have fields for the signer’s initials and signature in the same places a signature block would appear. When the signer clicks on the fields, the software will usually verify that they intend to sign the document. After confirmation, the software affixes the signature with time stamps.

This process creates an electronic audit trail to comply with UETA. It also allows for multiple layers of verification so your client can rely on the document.

What Documents Can’t Be Signed with E-Signatures?

The ESIGN Act specifically exempted certain documents. You need to look at state law to determine when you can enforce electronically generated signatures on:

• Wills, codicils, and testamentary trusts;
• Adoptions and divorces;
• Certain transactions under the Uniform Commercial Code;
• Official court documents;
• Utility cancellation notices;
• Foreclosure, repossession, and eviction notices;
• Health insurance cancellations;
• Product recall notices;
• Hazardous material permits.

Since the ESIGN Act was passed in 2000, most states have addressed whether a party can e-sign these documents or not.

How to Choose Electronic Signature Software for Your Law Firm

You will find many options for e-signature software on the market. Some features you should look for when you choose software for your law firm include:

• Compliance: You need software that complies with the ESIGN Act and UETA. If you practice in New York or work with clients who do business in that state, you should also review its e-sign laws. Remember that compliance is necessary to enforce an e-signature. If your software does not comply, you open a huge door to invalidating the contracts you write for your clients.
• Security: Software must provide verifiable and tamperproof signatures. It must also protect your clients’ data from hackers or opposing parties. Most lawyers do not have time to learn technical standards for data security, so look for software that encrypts data, stores data offline, and secures access to the data with passwords or two-factor authentication.
• User-Friendliness: Clients and staff will need to understand how to use the software. Pick a user-friendly software package. Ideally, you will find software that also has training tools and tutorials.
• Compatibility: You need e-signature software that integrates with your existing word processing and document management software.

Electronic Signature Tools for Lawyers

Two of the most popular e-sign tools for lawyers include:

DocuSign

DocuSign is one of the most widely used e-sign software packages. It is easy to use and meets global standards for data security. It also provides multiple ways for your clients to verify signatures, including email addresses, text messages, and one-time codes. It stores this information in audit trails in case you need the information later.

ZorroSign

ZorroSign is a newer entrant into the e-sign software industry. It uses the same blockchain technology as Bitcoin and other cryptocurrencies to create a tamperproof public record of e-signed documents. ZorroSign provides user authentication to verify signatures that you collect and stores them in case a dispute ever arises.

Leverage the Power of Integration with Smokeball

With remote work becoming more common, law offices must find and use software that integrates all of the firm’s systems and makes them available remotely. Smokeball has improved and streamlined its e-signature features to provide the integration and ease of use your firm needs.

Smokeball allows you to send documents via DocuSign directly from the record for a matter. This function will make you and your staff more efficient in collecting signatures. Your law practice will not even need a scanner or printer to collect signed documents.

Through integration with DocuSign, Smokeball provides firms access to one of the most secure and widely trusted platforms. DocuSign is known for its high data security standards and advanced encryption technology.

To use this feature, you can select DocuSign from the Send menu. This will open the document for editing in DocuSign. You can place the signature boxes on the page and request signatures from the parties. After gathering signatures, DocuSign automatically returns the signed document to the matter record in Smokeball.

Smokeball still includes the previous method for requesting DocuSign signatures via InfoTrack. This method can provide a shortcut for firms that use InfoTrack for e-filing documents. However, most users will probably find the new process more efficient.

The integration of DocuSign gives Smokeball users a more efficient way to collect legally valid e-signatures while keeping the documents organized in their matter records. This, in turn, will save time for your attorneys and money for your clients.

Electronic Signature for Lawyers: the Bottom Line

You have seen e-signatures everywhere. But this technology is not just for multibillion-dollar corporations. Electronic signatures for lawyers can meet your and your client’s needs by streamlining legal processes and giving clients a more verifiable and traceable signature form. To learn how Smokeball can help you use e-signatures for your clients’ important documents, contact us to book a free demonstration.