5 advantages of electronic signature in contract management

July 6, 2023

Contract execution is a crucial stage of contract management that can be slow and frustrating. Most private markets firms download a digital copy of a contract from their email or contract management software, upload and sign it in a separate platform, then return it to the other party via email or the previous software solution. Some firms even routinely print and sign contracts on paper, scan them to PDF, and send them via email. Despite most firms moving away from paper contracts, signatures are still a cumbersome process that slows firms during critical moments in the fund and investment lifecycle.

Firms are increasingly turning to electronic signatures, also dubbed eSignatures or e-signatures, to streamline their contract workflows and avoid jumping between platforms.

5 reasons to adopt contract management software with eSignature capabilities

Let’s review the key advantages private markets firms can gain by using contract management software with an eSignature integration.

1. One comprehensive platform

Contract management software with eSignature allows firms to manage their contracts in a centralized location from start to finish. For example, members of Ontra’s Legal Network can send finalized contracts for signatures directly from our Contract Automation platform, and customers can use the platform to execute their agreements via a DocuSign integration. This feature eliminates the need for anyone to move between platforms to complete contracts.

2. Faster signatures

Manually signing a contract or using a separate eSignature platform can take days or even weeks, delaying the next steps in investing or fundraising, such as beginning due diligence on a potential investment. Contract management software with eSignature supports a faster, more streamlined process. Ontra’s eSignature capability allows our legal network members to simultaneously deliver signature-ready contracts to all parties — eliminating lags caused by sequential signing — and leverage automated reminders to prompt signatories to take immediate action.

Once parties receive an email indicating the agreement is ready, they can follow the link provided in the email, sign their agreements via DocuSign, and move on with their other work. Customers can also avoid bottlenecks by reassigning signature responsibility to someone else within their firm.

3. Increased transparency

Ontra’s Contract Automation platform with eSignature offers real-time contract tracking. Firms can easily monitor the status of their ongoing contract negotiations by seeing which documents are in progress, ready to sign, waiting for a signature, or executed. Once parties execute a contract, the software automatically sends a final copy to all signatories. Additionally, each activity in the platform is recorded, dated, and time-stamped to provide firms with contract data that supports their obligation management, regulatory compliance, and audit response workflows.

4. Automatic, centralized storage

After all the signatories have signed the document, the Contract Automation platform automatically saves the agreement to a digital contract repository. Busy in-house legal and business professionals don’t have to remember to upload executed contracts to a central storage platform.

5. Better business relationships

Electronic signature capability built into contract management software improves the contracting experience for all involved. This superior user experience can be helpful to private fund managers that need to nurture relationships with investors and target companies in this competitive and complex fundraising and deal environment.

Electronic signature FAQs

Private markets firms new to eSignatures may have questions or concerns about the process. To provide clarity, here are answers to some commonly asked questions.

Are electronic signatures legally binding?

Yes, electronic signatures are legally binding. The Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act helped lay the groundwork to make e-signatures legally binding if all parties choose to sign digitally. Several valid methods can be used to electronically sign an agreement, including:

  • Using an e-signature powered by DocuSign
  • Clicking “I Agree” on a website
  • Typing a name or PIN into an online form
  • Using a stylus to endorse a signature on a mobile device

Are electronic signatures secure?

Yes, electronic signatures are secure. To ensure optimal security, it’s best to choose a contract management platform that integrates with a trusted e-signature provider. For example, Ontra’s Contract Automation solution includes DocuSign integration, which protects highly confidential information with encryption and anti-tampering controls. Also, authentication options are available to confirm the signer’s identity.

Do electronic signatures need to be certified?

Not necessarily. For example, when an online user clicks “I Agree” on a terms and conditions page, a certification step rarely needs to be completed. However, if organizations need a way to verify the signatory’s identification, it’s best to use a contract management platform with e-signature integration that offers extra verification, such as a one-time password, two-step authentication, or ID verification.

What documents can be signed electronically?

Private fund managers and investment banks can electronically sign many documents, including:

  • Buy- and sell-side non-disclosure agreements
  • Reliance letters
  • Non-reliance letters
  • Engagement letters
  • Vendor contracts
  • Joinders
  • Subscription documents

Gain a competitive edge with Contract Automation

Private markets firms looking to accelerate their routine contract management should consider Contract Automation from Ontra. Our human-in-the-loop system blends AI-powered software with a global Legal Network to secure the consistent market positions our customers demand. Built on a repository of over 800,000 contracts ranging from NDAs and non-reliance letters to joinders and engagement letters, Contract Automation with eSignature gives firms a competitive edge in routine contract negotiations.

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