Payment solutions can fix rates for up to eight months, offering clarity
As the need to secure intellectual property rights broadens out even more beyond national borders into the global economy, finding an efficient system for IP lawyers to pay foreign associates is a task challenged by fluctuating currency rates, says Chris Day, Director of Payments & Partnerships at Western Union Business Solutions in Toronto.
The challenge, he says, comes when a client in Canada needs to work with a law firm to deal with IP issues in another country. The Canadian law firm needs to engage a foreign associate to help file patent applications, do a trademark search, or prosecute IP infringements in other countries.
“The problem that needed a solution is that the client they represent has to be billed in Canadian dollars, but the foreign associate is billed in that country’s currency,” he says. Given the nature of the work and invoicing protocols, it may take anywhere between 30 and 90 days to have that invoice paid.
“By then,” Day says, “the currency may have completely shifted, and client, for example, may have to be billed for any outstanding amount that results from the currency fluctuation.” This type of “extra” or “second” building isn’t particularly helpful in building a relationship with a client, Day adds.
As a result of this sort of inefficiency, law firms recognized a need for more automation of invoicing and reducing currency risk, says Day, who is moderating a panel at the Canadian Law Awards this Thursday on the future of the IP boutique and adapting to a new era of innovation. (Western Union Business Solutions is one of the sponsors of the 2021 Canadian Law Awards virtual event this Thursday.)
One solution that IP lawyers have turned to is the use of WU® GlobalPay for Legal, an online payments platform with the ability to use future payments. The system, now used by more than 700 law firms across the world, is that legal staff can enter foreign invoices into the Union Business Solutions’ system and lock in that day’s exchange rate for up to eight months.
Day adds that once a client in Canada submits payment to the law firm for the work done by the foreign associate, the firm can then pay external foreign associates “knowing the final cost.“
The result, Day says, is reduced administration in dealing with fluctuating rates and cost savings that come from using an automated platform. He also points out that Western Union’s network of bank accounts can move money from bank to bank in its proprietary way, avoiding more expensive networks for sending money via wire transfers through intermediary banks.
With the internet and e-commerce expanding the reach of a product developed in one country being marketed globally, the need to secure IP rights will only grow, says Day.
“So, with that, finding an efficient, cost-effective way of paying foreign associates will only grow,” he says. Day adds that Western Union is seen as a trusted iconic brand that has been around for 170 years. (Western Union launched the first widely used service for wire transfers in 1872 on its existing telegraph networks.) Its digital platform roster for the WU® GlobalPay for Legal includes 500 banks and about 130 currencies worldwide.
With issues such as the global oil supply and the COVID-19 pandemic having an impact on currency fluctuations, Day says more than ever, law firms dealing with foreign associates must contend with currency markets that are constantly on the move. Currency experts have also noted that previous periods of lower volatility have given way to heightened exchange-rate swings of around one per cent.
Day says locking in those rates to get more clarity can make planning easier for IP law firms or any other law firms, like those that specialize in immigration, which bill in different currencies.