The Future of Contracts

One topic we've been thinking on, and working on, with some frequency is the future of contracts.

EchoSign has seen explosive growth in Q3 -- we've almost doubled our growth rate over Q2 (our previous record), and crossed 1,000,000 users.

Which begs two questions.  One, how to keep it going.  But two, once the world starts to adopt e-signatures en masse, what next?

The 1.0 concept here is so-called "signature automation" or "straight through processing".  Once your contracts are digital, and the data in them is digital, they can be processed automatically.  For example, several of the world's largest leasing companies use EchoSign to automatically process equipment leases, direct debit the first month's payment, and record all the paperwork, automatically, in one click.

But Contracts 2.0 may be something even more radical.  If the contract is created, reviewed, approved, signed, tracked, stored, and extracted all on the web ... does it even need to mimic paper at all?  And the business processes that have evolved, originally around paper -- are they ripe for radical de- and re-construction?

We're working on innovations here for 2011 and beyond.  But some early observations:

• The C> Drive is dead (long live the C> Drive).  Getting a contract saved locally to your hard drive is certainly far easier than the '90s paradigm of going to a file cabinet.  But local content can be lost, corrupted, changed and mismanaged -- and is lost to the enterprise.  The contract will be entirely, and dynamically, generated in the cloud.

• But Fax will survive far longer than people think -- just not for signatures.  Approximately 40% of documents that are FedEx'ed are documents "out for signature".  It's reasonable to assume a similar percentage for fax.  This will no longer be done, ever, for Contracts 2.0.  But fax also is a way to transport documents from one office to another, without the need for scanners or a stateful PC.  Fax of documents not for signature will last for decades and only slowly decline. Fax for signatures, however, will be dead and extinct in 6-8 years, much like analog film is now dead.

• More documents will be signed, not fewer.  In the digital age, one might wonder if signatures might become an anachronism.  In fact, the opposite is occurring.  As commerce becomes more global, and more remote, "handshake" deals become less and less practical.  Virtual relationships need to be physically consummated.  The signature is that moment in time, and its value only grows as commerce ever-accelerates and ever-expands its footprint.

There's more coming.  One thing we can guarantee you.  In five years time, EchoSign will look a lot like it does today -- only it will be more powerful, more feature-packed, and more integated with more and more web solutions.  But EchoSign will also being doing some things that today seem pretty out there.