The logistics of how and when businesses close deals can be critical to the bottom line.

In an era when instantaneous communication is the standard, waiting for written contracts to make their way back and forth between parties can seem agonizingly slow and expensive. Increasingly, businesses have been adopting legally binding electronic signatures to streamline the process. Now, companies are embracing the next step in e-signatures: mobile signatures.

E-signature company DocuSign has rolled out software customized for Google Android and and Microsoft Windows Mobile, and the company is updating its iPhone version with partner Smart Mobile Solutions. DocuSign also is Blackberry-compatible. Competitor RightSignature says it has been offering an iPhone solution for almost a year.

Rapid adaptation

Customers are embracing mobile options with enthusiasm, say e-signature companies. "We rolled out last August our first design for mobile,'' says Tom Gonser, DocuSign's founder and vice president for products and strategy. "It's being picked up pretty broadly by our users. We're doing thousands of mobile signatures in a month."

The economics of e-signatures in general make business sense. RightSignature estimates it can take the cost of processing a signed document from as much as $40 to $1.50. The average cost per user for DocuSign is $20 to $25 a month. It's not just about the cost of each document, though, says Gonser. Convenience and speed make it likely businesses can close more deals.

"The speed of being able to close the business transaction is the reason companies adopt this technology,'' Gonser says. "There are people who literally live mobile. They wake up in the morning, and they hit the road. For those people, this is a must have."

RightSignature counts a number of small businesses among its clients, says CEO Daryl Bernstein. Users of its mobile apps include a firm whose therapists obtain signatures from customers during in-home visits, a wedding photographer who sends contracts to client's mobile phones and an ATV/dirt bike company that signs sales agreements with customers on site.

"It's so simple and intuitive to sign a document online or on a mobile device that more recipients sign immediately," Bernstein says. "When clients are out of the office, traveling or even on the beach, they can sign contracts received on their mobile devices. Fewer deals are lost or delayed."

Not for every contract

While DocuSign has adapted its signing process for the smaller screens of mobile devices, mobile signatures aren't ideal in every instance. Lengthy documents that require considerable client interaction with many form fields are more suited for the PC format, says Gonser.

For instance, DocuSign client Fidelity Investments, wants its customers to review and sign contractual agreements on a PC rather than a handheld.

However, if you're sending a sales force out into the field with straightforward, simple sales contracts, a mobile signature provides an ease of operation that should allow your salespeople to work more efficiently. "For a simple sales contract, when I'm sending you a purchase order, that's perfect," says Gonser. "You can very easily see what you're buying."

The legality of e-signatures isn't an issue, says Gonser, who says only eight DocuSign transactions out of more than 70 million have faced legal challenges.

What you should consider

It's still best to exercise some caution with mobile signatures, advises Joy Butler, a Washington, D.C., attorney who wrote the book The Cyber Citizen's Guide Through the Legal Jungle: Internet Law for Your Professional Online Presence (2010 Sashay Communications). "There is also a dark side to the new technology," she says. "When we begin completing transactions with the click of a button as we scurry from one meeting to the next, we may momentary forget that these are real binding contracts and neglect to give each document the scrutiny it deserves."

Butler compares it to click wrap agreements on the Internet, where people don't bother to read website terms of service or other online contracts. "Nevertheless, once you click the 'I agree' button, you are a party to a binding contract even if you neglected to glance at the contract,'' she explains.

Butler advises considering these factors with mobile signatures:

  • Client understanding. Your customer should know he or she is entering a legally binding contract.  The information should be spelled out clearly on the screen.
  • Employee understanding. A mobile signature might feel like a casual move on a handheld device. Your employees should weigh the need for a review by counsel before entering legal agreements via mobile devices. "I've definitely dealt with the issue of employees binding companies through informal actions," Butler says.
  • A thorough review. Few companies send business letters without extensive proofreading. However, emails are often distributed without the same vetting, says Butler. Make sure that electronic legal agreements receive the same review you'd give written documents you distribute.

However, mobile signatures can offer some legal security, as well. It's possible to track a document's history, archive copies and authenticate signatures. Having an electronic record can enable you to check the status of documents, generate sales reports based on groupings of documents, correct a document you've already sent or track a document a customer says he or she didn't receive.

As business users continue to rely more on handheld devices, mobile signatures will be essential, Gonser says. "It's a pace of business,'' he says. "Either keep up or you die."