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The traditional way of thinking about contracting is antiquated and has no place in the future of business. Now, as everything needs to be done faster and more efficiently without sacrificing any of the security of your agreements or acceptance data, traditional pen-and-paper systems and PDF-based eSignatures are being phased out and have no place in a digitally transforming society.
Still, just making a one to one replacement from a squiggly line signature to digital signature is not enough to meet the evolving needs of your business. Generally speaking, you need to undergo a mindset switch from signing to accepting contracts.
The Signing Mindset is the more traditional, heavily negotiated, high touch way of getting agreements signed. This has a place within every organization: there are simply some agreements that will never be no touch, high volume in nature. These agreement types can benefit from more efficient signing/sending akin to what legacy solutions and CLM can provide, but will never be fully automated or seamlessly accepted with just one click.
Done the old fashioned way, all contracts are written and presented in a way that encourages negotiation. When it comes to word doc- or PDF-based contracts, the signing party is under the impression that this is not the final version. In fact, they believe that yet to come in the contracting process is redlining and back and forth of agreement terms, which always slows down the end goal of completing the transaction.
This one-to-one style of contracting is inherently untenable to a modern environment, which uses different types of agreements to govern a variety of business relationships.
The acceptance mindset is all about eliminating manual work that goes into standard agreement generation, facilitating a frictionless one step acceptance process, enabling acceptance at a high volume, and automating the tracking/audit process for all accepted contracts.
Contracts don’t have to be a process. They can be just as binding when they are agreed to with a click of a button as with a squiggly line. By making the adjustments to your contracting processes accordingly, you can enable your team, and by extension, your entire business, to become far more efficient.
Contracts in a modern operations environment need to be able to scale quickly and easily. 70% of time in any contract lifecycle is spent in the negotiation and review and approval stages (source). This indicates operational inefficiencies with internal teams.
Your team clearly has a vision of your ideal state for contracting processes, and most of the key decisions can be traced back to the fundamental differences between adopting a true “acceptance” mindset and still being stuck in the ways of “signing” and workflows associated with signing.
PactSafe is not an eSignature company. Our clickwrap platform wasn’t created for a customer that we were trying to upsell as a bolt on to our core product. Our platform was born for clickwrap from day 1 to solve the unique challenges of processing hundreds, thousands, or even millions of clickwrap agreements at scale. Processes that may be painful today for getting contracts signed can be reinvented and erased overnight by identifying ideal candidates for implementing clickwrap agreements in a strategic way at enterprise level.
The way to scale and the way to run efficient contracting workflows is predicated on believing that standardized contacts can be accepted without the need for redlining.
The acceptance mindset might not seem feasible to companies that aren't aware of clickwrap agreements. Clickwrap agreements can be accepted by checking a box or clicking a button. This means that standard agreements with market terms can be presented quickly and simply using this type of agreement. Also, thanks to ESIGN and UETA, when presented correctly, clickwrap agreements are usually upheld in court.
In 2019, for example, clickwrap agreements had an 80% success rate in court. Despite popular opinion, signing an agreement provides you with more security than clicking to accept a digitally native agreement. This also benefits your internal teams' workflow and helps Legal maintain necessary control over the agreements.
Companies that aim to maintain competitive advantage need to adopt the acceptance mindset. This isn't just about making the manual work of a Signing experience a little more efficient and user friendly. It is about recognizing the dollar value of that manual work and being strategic about when it is required.
For more on the benefits and applicability of the acceptance mindset, read our eBook, Becoming Self-Service: What Enterprise Tech Needs to Know.