Are electronic signatures legal?

Are electronic signatures legal?

Yes, in most cases electronic signatures are legally binding.

While there are a few documents that require wet signatures, electronic signatures — also called e-signatures — are widely accepted in nearly every industry. This is because an e-signature is more secure and harder to forge than signatures made in-person — not to mention it’s more convenient for everyone involved.

There are many options for accepting electronic signatures. These can include everything from simply attaching an image to a digital document to PKI-based signatures. Capture methods range from clicking “I Agree” on a website to signing with a finger on a touchscreen device.

Can I use electronic signatures for legal documents?

Yes, you can use electronic signatures for legal documents in every state in the United States (U.S.). Like wet signatures, e-signatures create a binding, enforceable contract.

What legal document can’t use electronic signatures?

While e-signatures are legal throughout the U.S., there are few legal documents that require wet signatures, including:

• Wills and trusts
• Real estate documents (i.e., deeds and mortgage papers)
• Marriage, birth, and death certificates
• Family law papers (i.e., adoption records or divorce decrees)
• Certain court orders or legal documents
• Healthcare forms (i.e., “do not resuscitate” orders and health proxies)

State laws vary on what documents require a wet signature. Legal professionals should be sure to check if electronic signatures are valid for the documents they’re working with and stay up-to-date on regulatory changes.

What makes an electronic signature legally admissible?

In 2000, theElectronic Signatures in Global and National Commerce (ESIGN) Act was signed into law in the U.S. It establishes that electronic signatures are as legally binding as wet signatures, so long as all parties agree to sign documents electronically and certain criteria are met. These criteria include:

• Intent to sign: As with paper documents, electronically-signed documents must clearly show that the signer intended to create a legally-binding signature. The signer can demonstrate intent by simply clicking on an “accept” button or by typing out their name. This indicates that the signer wasn't tricked into signing and that they agree with all the provisions in the document.

• Clear attribution: The signature should be clearly attributed to the signer on an electronically-signed document. Their identity must be verifiable through authentication methods like digital certificates to eliminate the possibility of fraud.
• Signature records: The system used to capture an electronic signature must keep a record of how the signature was created, and retain these records for legal reference.
• Copies of signed agreements: Each person involved with an electronically-signed document must receive a copy of the document for their own records. This ensures that they can refer back to it at any time and be reminded of legal obligations.

While electronic signatures are legal in most instances, it’s important to be aware that laws vary depending on the jurisdiction and specific circumstances. Legal professionals may need to protect electronic signatures from tampering by using additional methods of verification such as multi-factor authentication and strong passwords.

Benefits of using electronic signatures for legal documents

Curious about replacing paper documents and wet signatures with digital documents and e-signatures? There are plenty of benefits to making this switch, including:

Greater efficiency and convenience

Modern technology can streamline the process of document management and collaboration to save legal teams time and effort. Managing, signing, and sending documents digitally lifts the administrative burden of handling paper documents. It’s also more convenient, allowing legal professionals and their clients to easily access and manage copies of documents from their own devices.

Less paper waste

By using e-signatures for legal documents, law firms can spend less on paper, printing, and postage costs. Not only does this save resources for legal organizations, it can help reduce their carbon footprint.

Stronger security

With the right technology, electronic signatures can be more secure than paper documents. Modern tools can prevent tampering by encrypting signed documents.

Clear audit trails

Digital audit trails can clearly establish the authenticity of an electronically-signed document. Many e-signature platforms record and time stamp exactly when signatures are created. It can also capture other verifying information such as IP addresses.

Related Read: Simplify Secure Document Exchange for Law Firms

What to consider when using electronic signatures for legal documents?

Electronic signatures are generally considered to be legally binding. Even so, legal professionals should follow certain practices to ensure the validity of e-signatures never comes into question. Read on for some of these best practices and other considerations to keep in mind.

Best practices for implementing electronic signatures

To successfully implement an e-signature solution into your legal practice and realize the benefits listed above, legal professionals should research and select solutions that align with regional regulations and meet the following best practices:

• Reputable technology: Check that e-signature tools have quality vendor support and high customer satisfaction, as well as high security standards and compliance with legal regulations.
• Authentication: Use authentication methods such as multi-factor authentication that leave no room for fraud.

• Documentation: Make sure processes for collecting signatures and handling e-signature platforms are well documented for the entire organization. Doing this ensures everything from filing signed documents to maintaining records is carried out consistently to minimize errors.

Separate vs. integrated tools

Many e-signature tools can be purchased separately from the platforms where legal documents are created. This can create fragmented processes as teams switch from one application to another when creating, sharing, and getting signatures on documents.

Other platforms for secure document creation and collaboration allow teams to collect e-signatures within the same application where documents are created, saving time and effort. Consider a document creation solution with a built-in e-signature feature for more streamlined processes.

Related Read: Securing Legal Workflows

Security is top priority

Legal documents often contain personal information that needs to be protected. Even the possibility that a document may have been tampered with could make it inadmissible in a court of law. To protect client information and uphold the integrity of documents, e-signature platforms must provide the following essential security features:

• User authentication methods: This can include multi-factor authentication, passwords or biometric authentication measures that give access to authorized individuals only.
• Encryption: Using encryption when sending and storing documents protects it from being intercepted or altered. Legal professionals can also use digital signatures with cryptographic validation to detect any changes to documents.
• Audit trails: Digital audit trails make it easy to monitor document activities such as viewing, editing, and signing. This makes it possible to quickly detect unwanted activity or tampering.
• Digital certificates: Issued by a trust service provider or certification authority, digital certificates are electronic "credentials" that verify a person’s identity online. They prove that a signer’s identity is accurate.

Related Read: Modern Data Security for Small and Mid-Sized Law Firms

Collect signatures securely and efficiently with e-signature tools

As long as it meets a few simple criteria, an electronic signature is legally binding. By following best practices and investing in the right e-signature solution, legal organizations can boost efficiency, save paper, and establish a more secure, convenient process for collecting document signatures.

Secure technology for document creation that incorporates an e-signature tool may be the best way for legal professionals to improve client satisfaction and organizational efficiency. Look into solutions like ShareFile to find the right tool for your team.