Aug 20, 2021 | Risk Management
Is your Law Firm Going Global?
How do you manage your cross-border payments?
According to findings from the State of the UK Legal Market 2021 report from the Thompson Reuters Institute, ongoing pressures, such as the effects of the coronavirus pandemic and Brexit, are causing disruptions and the shifting of priorities in the UK legal market.
The report found that the demand for cross-border legal advice had increased since 2017 because of the uncertainty caused by Brexit. Specifically, 80 percent of UK corporates were looking for international legal support, and 47 percent of UK corporate legal spend was dedicated to international legal work.
Meanwhile, COVID-19 has created global opportunities for many law firms who now have clients all over the world. The investment in technology necessitated by working from home, has meant that clients are being serviced virtually, and this can continue even once we return to our offices.
The scope for expansion is huge, but moving into new markets can be intimidating. However, with the right payments partner and the right technology, UK legal firms can take advantage of the new opportunities. It may not be as daunting as you think.
What is stopping you? Some common areas of concern
You may need cross-border transactions to facilitate payments for intellectual property, or cases related to immigration. Or perhaps you have expanded overseas and need to organise your foreign associates’ payroll and payments, and foreign office funding. Whatever the reason, any organisation making international payments for the first time has concerns and questions about how it will all work.
Finding the right partner
If you are just making the occasional bank transfer overseas, your first thought will be to utilise your current banking relationship. However, this can often be expensive and inefficient, so when you need a more permanent process, it can pay to partner up with a specialist payments provider.
Bank transfers may not always be the most convenient way to make international payments. A good provider will have a comprehensive global footprint, enabling you to pay foreign associates in multiple countries and territories, using your home currency, without the need for overseas bank accounts. They should also enable you to make local currency payments in cash in locations around the world.
Keeping costs low
With a payments provider, in-country banking relationships enable transfers to be treated as local currency transactions, reducing wire charges and your firm's expenses. Bank reconciliation is quick and easy with fully referenced payments and statements.
You will also need to keep an eye on any incoming payments. If bank fees are applied to these, you may receive less than your invoiced amount, so make sure your provider has a transparent charging structure.
The administrative burden
It is a commonly held belief that the administration involved with international payments is both time-consuming and complex. However, many payment platforms can now be seamlessly integrated with your own front or back office systems, and can even be customised to your specific needs. This does away with the need to manually input each order. Instead, end-to-end invoice management allows you to capture, submit, pay and track invoices in an online platform which is tailor-made for the legal industry.
So, there is no need for labour-intensive payment processes which are a drain on your firm's resources. Instead, you can focus on servicing your clients, and making the most of your billable hours.
Managing the risk of currency fluctuations
Another concern when entering the global arena, is currency exposure risk. Creating a risk management strategy will help you optimise your cash flow and mitigate the risks of currency fluctuation, giving you certainty and control.
A good payments provider will work with you to develop a strategy in line with your business goals. If, for example, you are concerned about currency fluctuations between invoicing a client and the payment’s due date, you may want to lock in exchange rates. This reduces your exposure to currency risk, and enables you to bill clients fixed amounts, safe in the knowledge that the amount budgeted for is the amount coming in.
With a risk management strategy in place, you can have the security of knowing wherever the market moves, your profits are protected.
The complexities of compliance
Compliance means something different in every market around the world. There are different rules and different reporting requirements, and your in-house compliance team can’t be expected to be experts in all of them.
When choosing a payments provider, you need one with thorough knowledge and experience of compliance in the markets you are entering. Check also that their payments platform produces the automated reporting and notifications that are required to be compliant, as this will save time and money.
No need for currency bank accounts
The last thing you need is more admin to deal with, so you will probably want to avoid opening a currency bank account. In fact, if you are not going to have equal incomings and outgoings of that currency, they can be a false economy.
A specialist payments provider can offer other solutions, such as holding balances. You can store incoming payments free of charge for up to 90 days. This gives you control over your funds, flexibility to secure favourable exchange rates, and the ability to make same day payments, reducing your currency risk exposure.
A trusted partner
Western Union Business Solutions provides payment services for over 600 law firms globally. If you are seeking a partner to optimise cross-border payments, Western Union Business Solutions can equip you with the solutions you need to send, receive, and manage international payments.
Our skilled team of legal industry experts will work in partnership with you to design a customised solution, to help simplify your international payments, payroll and invoice workflows. We provide seamless integration with our payment platform, which can process up to 200 invoices a day. Reports and notifications can be automated, and our team will work with you to adhere to your own approval flow.
At Western Union Business Solutions, we are trusted by more than 60,000 organisations to move money around the world. We have an extensive global network, spanning 200 territories and 130 currencies, and an in-depth knowledge of local markets and compliance.
If you are looking for world-class cross-border payments services, please contact our team at UK-Payments@westernunion.com. We’ll be more than happy to talk about how we can help you manage your international transactions.Contact us