The rise of e-signatures in a modern legal industry

It’s no secret that technology is taking over the way we do things in the professional services sphere, whether that be the way lawyers are now on hand 24/7 or the use of chatbot-style interviews to create documents and improve efficiency. Despite the breakneck speed at which the law is embracing the rise of certain new technologies, the legal industry remains resistant when it comes to replacing some particularly well-ingrained practices with new innovations.

One example of this resistance is the rise of e-signatures and their associated technologies.

Although some of the big players in the legal industry are looking to move away from traditional methods – especially for inefficient and banal processes like signing agreements – there remains a disquiet for such methods which are often only observed in the NewLaw sphere. This is primarily because of concerns over the enforceability of such agreements, causes disquiet as to the potential for manipulation, particularly in large-scale agreements.

> So what constitutes an e-signature?

When you think of an e-signature, people tend to think that it requires a signee to print out an agreement, sign it manually (as you usually would), scan it back into the system and the software would recognise your signature in an electronic form. However, it is far simpler than this.

An e-signature is merely an identifying factor which is inscribed on an electronic communication – a signature, a name etc – which conveys clearly the intent to be part of a legal arrangement such as a binding agreement between parties.

According to the Electronic Transactions (Victoria) Act 2000, that identifying factor and clear signal of intent – along with the consent of the signing party to complete the agreement in this method – must be present for an electronic agreement to be considered executed.

> Could this method be rolled out to all types of legal documents?

With a view to the future, e-signatures could very well become the norm.  For now there are two good reasons not to throw out traditional signatures entirely though:

1.       They can’t be used for all legal documentation

Sadly, the reality for our signatures on super important documents – like wills and the deeds to our houses – is that they cannot be signed in this manner due to the requirements for such signatures to be witnessed by a third party. This is because certain formalities need to be met, and the concept of attestation – which the presence of the witness’ signature relies upon – is hard to truly determine in these instances.


2.       Intention to be bound

Even with traditional methods of signing documents, there has been many a case concerning the verification of the signee’s intention to be bound, especially where an agent or the company secretary are the ones signing the documents. Many firms are still resistant to embrace e-signature methods for this very reason, because it raises the risk that the agreement or contract may be challenged and deemed eventually unenforceable as a result.


> But why are e-signatures the way of the future then?

Ultimately it comes down to efficiency. The technology is there – why don’t we use it?


There are many benefits which advocate for the use of e-signatures, including:

-          Their use significantly minimises the time outlay for clients;

-          Costs would be significantly reduced for clients; and

-          They allow for legal documentation and agreements to be completed in a secure manner.

Although there are widespread worries about the application and use of e-signatures as a legally binding method of signing legal documents, embracing the technology that is at our disposal will make the lives of lawyers easier in the long term. Contrary to popular opinion, it doesn’t remove the lawyer as the primary supervisor; they still play an integral role in ensuring that all legal requirements are met and the agreement is binding on all parties.

With everyday life becoming more and more busy for all types of professionals, it is less likely that people have the time to wait around and meet up just to sign an agreement. The reality is people do things on the go, and email and instant messaging are the go-to methods for communication. With more and more commercial transactions being done this way, doesn’t it make sense for e-signatures to become the standard?

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