Earlier this summer, ALM collaborated with ARX, a global provider of digital signature solutions, to conduct a broad reaching poll among law firms and corporate legal audiences regarding their familiarity with and use of digital signatures. The “Signature-Dependent Processes & the Use of Digital Signatures in the Legal Market” Survey (report findings here) focused on usage and readiness to use digital signatures; efficiency impact of using digital versus physical signatures; factors of importance and concern when considering going digital; and departments most interested in versus most reluctant to use digital signatures.
To our surprise, 40% of the 200+ survey respondents indicated already using digital signatures and a total of 79% either use, are ‘planning to implement’ or ‘see the need’ to use digital signatures. Adoption is steadily increasing, especially among law departments (representing 45% of all respondents) with 41% saying they were most interested in implementing digital signatures.
According to the survey results, the top factors for selecting digital signatures included security and integrity of sensitive data (87%); ease of use (86%); ease of implementation (81%); acceptance by the courts (78%); and control over user management/governance policies (70%).
While these selection priorities are for the most part aligned with broader legal trends ... security, ease of technology use and information governance, the order of top digital signature benefits was a bit 'against the grain' with only 39% citing prioritized compliance with legal and audit requirements as a key benefit. On the opposite end, 62% cited increased efficiency (saving time on printing, etc.) as the biggest benefits of digital signatures; and 50% preferred shortened turnaround time on signature approvals.
In digging in to better understand why legal compliance scored relatively low, we thought it relevant to point out that not all digital signatures are created equal. The survey focused on digital signatures, defined as anything that is not a wet (manual) signature, including both electronic and digital varieties.
Through our Envision Agency work with digital signature solution CoSign and its corporate parent ARX, we have learned the differences between digital and electronic signatures ... many of which are based on portability, security, global digital standards and compliance. An apparent lack of differentiation and broader understanding between the two among survey takers might have been a contributing factor in terms of factors they value versus benefits they look for.
As expected, the survey revealed that top digital signature deployment concerns include data security and integrity; control and location of sensitive data; acceptance/legality of digital signatures; and compliance with regulations/audit requirements. It's interesting to note here that while the top concerns mostly all pertain to security and compliance, many legal professionals are relying on basic electronic signatures ... often a simple scanned signature and associated GIF or JPEG, to meet these needs. Again, a more thorough investigation of 'digital vs. electronic' might provide more clarity here.
1+1=3! The survey showed that while corporate legal departments are the most interested in implementing digital signatures (41%), (followed by law firm IT and Marketing) they are also the most reluctant to implement digital signatures (28%) (followed by the C-Suite and Finance).
So what's really behind this curious contradiction? A 'mere' education/knowledge gap or a technology/compliance deficit on the side of the digital signature providers? Based on what we have seen, heard and read, it's definitely an 'all of the above' and 'it depends' answer. It is no secret that highly regulated, standardized industries such as financial services, life sciences and pharma widely embrace digital signatures based on their adherence to globally accepted standards and document security protocols.
On the other hand, GCs working with their outside counsel who are extremely risk adverse when it comes to making a technology switch (such as 'paper to electronic' or 'electronic to digital') might just deem the effort involved in converting not worth it - either because the traditional physical signature is still considered the 'safest' or because nobody is doing the math to compute the big picture. What does adding 1.24 days to signature processes due to waiting on signed documents do to the bottom line? How much financial and environmental resource waste does the stat '49% of all documents are printed for the sole purpose of obtaining a signature' amount to?
In an age, where cost cutting, increased productivity, streamlined operations, mobility and compliance/security are all red hot buttons, embracing a digital signature strategy seems like a natural progression.
- Register for ARX's Oct. 30th Webinar: Digital Signatures Demo for Legal
- Infographic: Digital Signature Usage in the Legal Profession
- Whitepaper: Digital Signatures in the Legal Market: How to Select the Right Solution for Your Firm or Legal Department
- Article: Ditching Paper Signatures: Are all Electronic Alternatives Created Equal?
- Additional Resources for the Legal Market