Electronic Signatures and DocuSign
How many times have you seen an agreement that needs to be signed in a specific place? Given the time spent to arrange a meeting, get to the destination, and actually get the contract signed, it could be quite an endeavor. That’s where the e-signature market that is expected to grow seriously by 2020 comes into the spotlight. In this article lawless.tech will discuss, among other things, the possibilities of the electronic signature and take a closer look at DocuSign.
DocuSign’s Place in the Cloud Computing Market
DocuSign is a San Francisco based company that primarily focuses on electronic signature and digital transaction management services that simplify contract conclusion. Simply put, they focus on making contract signing relatively effortless, and generally seek to automatize documentation procedures. The electronic signature technology allows the users to sign contracts without actually being there.
The company was launched in the early 2000s. DocuSign was funded by venture capital raised over many investment rounds. The amount of funds was growing steadily: from $4.6 million in June, 2004 to $27 million in December, 2010 to $233 million in May, 2015. This April, DocuSign filed for an initial public offering (IPO). As reported by Marketwatch, at the IPO price DocuSign would raise a total of $629.3 million at the valuation of about $4.4 billion, based on 152 million shares outstanding at the time of the offering. Going totally bold in their IPO prospectus, DocuSign said:
“As the core part of our broader platform for automating the agreement process, we offer the world’s #1 e-signature solution. According to an October 2016 Forrester Research report, DocuSign is the “strongest brand and market share leader: the company name is becoming a verb.”
DocuSign has been showing a constant growth in terms of market expansion. By 2009, the company reached 73% of the software as a service (SaaS) electronic signature market with the “next closest competitor” covering only 14% of the market. G2 Crowd, a peer-to-peer business solutions review platform, presented DocuSign among the leaders of the market in its e-signature software comparison table. The competition in such a heavily crowded ecosystem may appear to be quite drastic, especially having OpenSpan Sign and Adobe Sign as rivals. However, DocuSign seems to stand its ground by being rated 3rd on the basis of G2 Satisfaction score (which is measured by G2 Crowd Grid algorithm).
Later on in 2011, TechCrunch reported that after processing “more than a half billion pages of contracts, agreements and other legally binding documents, DocuSign has made a donation to the Arbor Day Foundation to preserve one million square feet of rainforest.”
According to the 2012 Business Insider interview with Keith Kruch, the DocuSign CEO at the time, “approximately 90% of Fortune 500 companies have signed up for DocuSign.” The company is also in the leading positions of Forbes Cloud 100, a list of top companies in cloud computing, for two years in a row – ranking #3 in 2016 and #4 in 2017, and competing with Dropbox, Slack and Stripe.
The company speaks quite daringly of the things they do, or at least aspire to do:
“DocuSign accelerates the process of doing business for companies, and simplifies life for their customers and employees. We accomplish this by transforming the foundational element of business: the agreement.”
The trend of using e-signatures appears to be rather significant, which probably explains that, notwithstanding the specificity of the service, there are over 30 companies in the industry. So it hardly should be surprising that the regulatory bodies of different countries turned their attention to the issue of e-signatures and its effect on the on the way how contracts are treated.
E-Signature Regulatory Compliance in DocuSign
DocuSign software is underpinned by the electronic signature technology, which is quite regulated in numerous jurisdictions. For instance, under the EU’s eIDAS (electronic IDentification, Authentication and trust Services) an electronic signature (or e-signature) refers to:
“Data in electronic form, which is logically associated with other data in electronic form and which is used by the signatory to sign.”
Simply put, the term “e-signature” means any form of signature put in an electronic document whether it is a simple image, a signature drawn on a mobile device, or another representation of a signature.
It is also worth mentioning that e-signature is a legal concept distinct from digital signature, one of the technologies that implements it. Basically, through digital signature one can electronically sign a document in a cryptographically protected way. Hence, instead of a simple image or a hand-drawn signature on a device attached to an email or a document, you get a set of hash numbers that can be decoded using a specific key only. The information that a digital signature may contain refers not only to the authenticity of the data, but also to that of the signee. Digital signature is widely used in, for example, e-commerce where additional protection and reliability are very much required.
А potential user might certainly wonder if this signature is actually legally valid, and whether it can be accepted as such by a court. DocuSign’s answer to that concern is the possibility to create a stylized signature in one of the handwritten-like fonts based on the first and the last names of the signee entered upon the registration. It might seem nice, but the question remains: does such a signature comply with the regulations? Would a court accept it as an authentic one?
DocuSign also has the following disclaimer, which deserves a special attention for its last part: “By clicking Create, I agree that the signature and initials will be the electronic representation of my signature and initials for all purposes when I (or my agent) use them on envelopes, including legally binding contracts — just the same as a pen-and-paper signature or initial”.
Basically, multiple regulations address the issue of e-signature’s enforceability in relation to an old-fashioned handwritten one. For example, the US ESIGN (Electronic Signatures in Global and National Commerce) Act stipulates:
“A signature, contract, or other record relating to [any transaction in or affecting interstate or foreign commerce] may not be denied legal effect, validity, or enforceability solely because it is in electronic form.”
Therefore, the legality of an e-signature has been considered and is already implemented, so DocuSign’s compliance with the relevant regulations should be within the scope of reasonable doubt. Quite interesting about DocuSign is their transparent approach to the regulatory framework. As a matter of fact, it provides an extensive e-Signature Legality Guide right on the website with rules from 64 different jurisdictions.
Furthermore, the security measures of such a service have to be taken into account as well. In an interview to NBC’s Security News Daily, Tom Gonser, the founder of the company, explained:
“When clients upload a document and the e-signature attached to it to the company’s firewall-protected server, DocuSign encrypts it and then “hashes” it — essentially creating a mathematical algorithm of the file that can be examined to determine if it’s been tampered with.”
DocuSign also offers different possibilities to protect the signing process. For example, they employ the biometric phone authentication. Of course, according to the newly adopted EU’s GDPR, such a data is regarded as sensible, and therefore additional measures of compliance are to be taken. In any case, this is how it works:
“The customer calls a designated number and DocuSign sends a code to the user’s phone, which the customer then types into the phone. A recording of the customer’s voice finishes the process, tying the company’s phone, the user’s phone and his voice to the e-signature.”
“If e-signatures became the primary method of authentication, they would certainly be targeted. A better e-signature system would rely on trusted external cryptographic hardware devices using biometrics to sign the data instead.”
At the end of the day, with legal regulation in place and proper security risk management, DocuSign sustains a considerable level of standards in both cases. However, apart from high security standards and regulatory compliance, to be viable a service should as well be convenient to the end user.
How to DocuSign
Even though the very technology or the legal framework is not that new, the way DocuSign employs it might be of particular interest. Essentially, the service looks like an email client, and the workflow resembles that of drafting an email. Additionally, the sender is guided through every stage which helps newbies quite a lot. In the end, the sender gets the final document with specified fields to be completed by the recipient.
The document submission process is rather intuitive and consists of 4 stages. Basically, the first one starts with adding a document which needs to be signed. There are many supported file formats, including popular document, presentation, spreadsheet or image ones, so there should be little trouble at this stage. Moreover, one can add a document directly from a preferred cloud storage. DocuSign provides four options here: Box, Dropbox, Google Drive, and OneDrive, which is quite convenient for most users.
After the upload has been completed, one will be asked to select the recipients. One can also choose the capacity of the recipient: a signer, an in-person signer, or just a CC recipient. Furthermore, one may add an access authentication that will protect the document with a password.
Then, one goes to the playground with all the features DocuSign has to offer Here, the user manages a set of standard fields that the recipient will be asked to fill in. Among these are Signature and Date Signed fields, fields for the information about a company, checkboxes and dropdown menus, and some others. In total, 16 functional fields are offered. Also, one can create custom fields if there is a need for something more adjustable. In case the user specifies more than one recipient in the previous step, they can easily switch between the two and manage the fields accordingly.
Eventually, the user will be asked to review and send the document. One can write a message to the recipient, choose the email subject and so on. What is quite interesting in here, is that in the Options tab you can choose whether the recipient is allowed to change the signing responsibility, set automatic reminders, and an expiration date of the request to sign the document. Then the user presses “Send”, et voilà! Now, he or she has to wait for the recipient to fill in all the fields.
When it comes to the recipient, they will receive an email with a link to review the document. The link redirects them to the DocuSign website to complete the document. The registration is not necessary for the recipient which is quite flexible.
Some of the fields are already pre-filled. In the sample document, such fields were the recipient’s name and email address, as well as the date and time stamp. When the recipient gets to the Signature field, they can choose whether to have it generated by the service, or drawn by themselves. After they are done, no further actions are to be taken.
All in all the process indeed seems to be quite effortless. Probably at a first glance. When you think of it, you really save time because you don’t have to go anywhere to sign the document. However, you still have to spend some time to go through all the forms and have a document ready to send. If you experience occasional problems with the Internet connection every now and then, it all might get a little frustrating. Plus, one cannot really edit the document once it has been uploaded. Therefore, in case the recipient is willing to propose some changes, one might have to repeat the whole procedure all over again. Of course, pretty much the same thing happens with traditional contracts, so it’s the parties’ responsibility to negotiate everything in advance. Still, there is a possibility to leave the comments and notes, or to provide some conditional fields which can be then dealt with by another party.
DocuSign also offers a wide variety of features for their customers. For example, one can create a base of internal users, and use numerous templates available for different types of documents. For big organizations, they offer a possibility to adjust the branding of documents, get visibility of the documents across the organization, and set different compliance policies.
DocuSign also provides for making the payments directly upon completing a document. The company cooperates with Stripe, PayPal and Authorize.Net, which in turn allows the user to fill in all the necessary details in a document, and then go directly to the preferred payment system to complete the payment on spot.
Integrated into many services provided by different companies such as Microsoft, Google, Salesforce, Oracle to name a few, DocuSign provides a seamless experience as well. For example, if a user creates a document in Google Docs, through add-ons they can use all the features DocuSign is supplied with.
All in all, DocuSign provides decent agreement management services with many perks that make the experience quite fulfilling.
The electronic signature technology is widely used in both governmental and business processes around the world. The legal framework in the field is quite well established and tested. With the abundance of regulation in both national and supranational levels, e-signature can be positioned as a working concept with more or less clear regulation in the global market. Therefore, it is only up to business to develop and improve appropriate software that can be used to expand the relevant market. Services like DocuSign may indeed reduce the time needed to create and sign a contract. This in turn provides for many opportunities as one doesn’t have to be physically present to so do, agree upon the meeting times and other semi-bureaucratic aspects of the process. Additionally, the market expansion allows for integration of the possibilities of DocuSign with providers of payment and other cloud services, which also reduces the amount of time and effort spent to conclude an agreement.
The e-signature technology moves the world community towards an indeed completely digital paperwork which can save us more than just time to process documents. While being an efficient tool to do business, the impact of e-signature technology stretches way beyond the market.
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