AJS South Africa


Digital signatures

Tim O’Reilly said –

What new technology does is create new opportunities to do a job that customers want done.

And we couldn’t agree with that statement more.

New technology helps us do what we need to do, more efficiently and often at a reduced cost. Part and parcel of using tech is simplifying time consuming and troublesome tasks. One of these so-called “troublesome tasks” is getting stuff signed.

It has historically always been such a “mission”.  And that had to change.

Our main aim with this Tech Series is to shed light on tech products that we believe are not only attainable but are worthwhile attaining – assisting your practice to run smoothly, efficiently and optimally.

We hope that our topic this week – digital signatures – will shed light on what it is, how it works and how it can benefit your practice.

Without further ado, let’s get the ball rolling –

Digital signatures

As we said in our article Technology Part One – This is not Science Fiction. Anymore – how we interpret signatures has changed. For the better.

What was once considered legitimate only if it was in writing, signatures have now gone digital.

According to Lawahead, a digital signature allows for higher security in remote working environments, thereby increasing productivity of law firms whilst also reducing costs. It can be presented as a handwritten or biometric (digital fingerprint) signature.

Digital signatures have therefore become more widely used (especially since lockdown) and stand out as not only a growing trend but something that can immediately benefit your practice. Today.

According to Lawahead 87% of law firms surveyed had already implemented digital signature tools (with DocuSign being the principal provider).

What is a digital signature?

A digital signature is defined by TechTarget as –

A mathematical technique used to validate the authenticity and integrity of a message, software, or digital document. It’s the digital equivalent of a handwritten signature or stamped seal, but it offers far more inherent security. A digital signature is intended to solve the problem of tampering and impersonation in digital communications.

Digital signatures can provide evidence of origin, identity and status of electronic documents, transactions, or digital messages. Signers can also use them to acknowledge informed consent.

In many countries, including the United States, digital signatures are considered legally binding in the same way as traditional handwritten document signatures.

But what then is an electronic signature?

Lawtrust defines an electronic signature as –

Any mark that is made on an electronic document with the intention to serve as a signature is seen as an electronic signature. In South Africa, electronic signatures are considered legal for signing most documents.

However, electronic signatures are low trust signatures since an electronic signature does not contain any evidence to tie the identity of the signer to the document. Furthermore, there is no proof that the document did not change after signing.

In order to protect against these weaknesses, digital signatures were introduced.

The main difference between a simple electronic signature and a digital one is the “trustworthiness” and “strength” of the signatures.

IBM explains this “trustworthiness” and “strength” perfectly – “a digital signature is an encrypted stamp of authentication on digital information such as messages. The digital signature confirms the integrity of the message. This signature ensures that the information originated from the signer and was not altered, which proves the identity of the organization that created the digital signature. Any change made to the signed data invalidates the whole signature. A digital signature for an electronic message is created by using a form of cryptography and is equivalent to a personal signature on a written document.

How does a digital signature work?

DocuSign, a leading digital solution provider, explains how digital signatures work –

Digital signatures, like handwritten signatures, are unique to each signer. Digital signature solution providers, such as DocuSign, follow a specific protocol, called PKI. PKI requires the provider to use a mathematical algorithm to generate two long numbers, called keys. One key is public, and one key is private.

When a signer electronically signs a document, the signature is created using the signer’s private key, which is always securely kept by the signer. The mathematical algorithm acts like a cipher, creating data matching the signed document, called a hash, and encrypting that data. The resulting encrypted data is the digital signature. The signature is also marked with the time that the document was signed. If the document changes after signing, the digital signature is invalidated.

A good point to note (by TechTarget) is that if a recipient of a “signed” document cannot open the document with the signer’s public key, that’s a sure-fire way to know that there’s a problem with the document or alternatively a problem with the signature itself (thereby authenticating the signature, or not).

Benefits of a digital signature

While there appear to be many benefits of digital signatures (you can read these benefits, herehere and here) we believe the top 3 benefits of using a digital signature are as follows (reference made to contractlogix) –

  1. Increased speed of contract finalisation – digital signatures can prevent any unnecessary delays in finalising contracts, resulting in an accelerated and improved streamlined contract process;
  2. Enhanced security – contract management software with electronic signing capability can automatically detect even minor altering of a document which would, in turn, lead the parties to conclude that the signed document had been altered or tampered with. Remember it would be easy for fraudulent signatures to happen in the name of the private key holder whose “key” had been given out to a third party or if it had been misappropriated; and
  3. Cost saving – saving money on paper, ink and printer maintenance due to not printing out the contracts, reduced office space as contracts can now be stored in the Cloud and due to the automated processes of digital signatures, there is a reduction of the financial impact of human error such as signing mistakes, which can slow down the process or cause problems down the line due to undetected errors.

What do we suggest?

The benefits of using digital signatures and therefore having this easy to implement tech in your practice far outweigh not having it.

We would suggest looking at market leading providers, such as DocuSign, to work out a solution that best fits your practice – how can it benefit your practice as a whole?

With DocuSign’s landing page stating –

The way the world agrees

More than a million customers and a billion users trust DocuSign with their critical and essential agreements.

It kind of makes you wonder why you are not, already, one of the billion users.

– Written by Alicia Koch on behalf of AJS

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