Over a decade ago when our firm opened the Wells Fargo bank account that is our firm’s present operating account, the bank told us that there were two “ABA routing numbers” that we needed to know.  I never really understood why there were two, or how a person might know when to use one or when to use the other.  Very recently in my efforts to learn about international business money transfer options, I have gotten to the point of understanding the two routing numbers better.  It turns out that there are two ways for a business to send money from one US bank to another, and one is faster and more expensive, and the other is slower and less expensive.  In this blog article I will explain what I have learned about this.  This information might possibly be helpful to you in either of two ways:

• maybe you have in the past been using the more expensive way for transactions where you were not really in a hurry, and you would benefit from knowing about the slower and less expensive way, or
• maybe in the past you only knew about the slower way, and you would benefit from knowing how to use the faster way in cases where you do not mind paying the higher fee.

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A question that comes up from time to time is how to bill a client for a piece of foreign associate work?  The situation of course is that the foreign associate’s invoice is denominated in € or ¥ or some other currency that is not US dollars.  Of course you need to bill your client right away, as soon as the invoice arrives from foreign counsel.  Then it might take your client a month or more to pay you.  Then you will pay foreign counsel.  

And here is the first problem.  Foreign currency exchange rates are not static.  They change from time to time.  You are holding in your hand an invoice from foreign counsel for €1000.  You could look it up on xe.com to find that as of today, this is the same as $1138.41.  You could bill your client for $1138.41.  A month from now the client pays you $1138.41.  Which is fine except that almost certainly the exchange rate has changed.  If it went up, then the $1138.41 does not actually get you €1000.  You might have to spend money out of your firm’s pocket to make up the difference.  If it went down, then you get more than €1000 and if you only send €1000 to foreign counsel, you have enriched yourself at the client’s expense.  

Yes you could always imagine doing a “true-up” later with your client.  Maybe two months from now you find it necessary to refund $3.51 to your client because the exchange rate shifted in the client’s favor.  So you would then have to spend maybe $50 of internal firm resources posting this refund into your billing system, and cutting a check for $3.51, and mailing it to your client.  Or maybe two months from now you find it necessary to bill the client $3.51 because the exchange rate shifted the other way.  So you can spend maybe $50 of internal firm resources billing the client for $3.51, and the client gets to cut a check for $3.51. 

Wouldn’t it be nice to keep this from happening?

There is also a second problem.  If you simply look it up on xe.com, you don’t really know what your actual exchange rate will be for the payment method that you choose for paying the foreign associate.  xe.com gives you the “mid-market exchange rate” which is a mid-point between (for example) the price that people have to pay who are selling dollars and buying euros, and the price that people have to pay who are selling euros and buying dollars.  You personally will never in your life pay the actual mid-market rate.  You will pay a rate that is slightly different from the mid-market rate, because your service provider will charge something (instead of nothing) for the service of exchanging the currency.  (Or you may pay a rate that is 7% different from the mid-market rate, which is what would have happened the last time we almost used Western Union Globalpay to send a bunch of money to WIPO on behalf of a Madrid Protocol trademark filing of one of our clients.

It gets worse when you realize that when your client’s money might be going into or out of your firm trust account and you need to account for every penny that goes into or out of that trust account.  It’s not acceptable to say “oh we got it approximately right” when balancing the trust account transactions with the transactions for things like paying foreign associates.  Close is not good enough.

So what can you do?  You would like to lock it in that the foreign currency exchange for your invoice payment will cost some number of dollars, and then you can bill the client for that number of dollars, and the client can pay you that number of dollars, but it could be tomorrow or next month that the client pays you those dollars.  And then you would like to be able to pay the foreign associate the exact amount of their invoice.  And you would like this to work regardless of whether the exchange rate fluctuates (maybe a lot) during the time periods involved.  You would like to avoid being a risk-taker that the exchange rate might go up or down, leaving your firm holding the bag for a shortage, or putting your firm in the position of having been enriched at the client’s expense.

In this blog article I explain how you can accomplish all of these goals, pretty much effortlessly, using any of the modern-day foreign payment systems including for example TransferWise and Afex. Continue reading →

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Every one of us has a goal of using words correctly.  Here is an example of a word being used incorrectly.  I encountered this sign in the Denver airport while waiting in line at a TSA checkpoint.  The sign exhorts passengers to move ahead to any of several places where a TSA agent waits to check your boarding pass and ID.

The sign incorrectly calls such a place a “podium”.  This is wrong.  The person designing this sign was looking for the word “lectern”.  See for example this article and this article.  

This blog article makes two main points:

• that of the several ways of doing two-factor authentication, SMS (text messaging) is by far the most insecure, and
• if you have no choice but to use SMS two-factor authentication, there is a way to be really smart about it.

The way to be smart about SMS two-factor authentication is to create your own virtual cell phone from clever and inexpensive voice-over-IP building blocks. Continue reading →

Alert blog reader Greg McLemore tipped me off to yet another sort of IP/tech aspect of Brexit that I had not thought about — Internet domain names that end in “.EU”.

It turns out that the registry in charge of dot EU Internet domain names had some months ago set a policy that if and when the UK ceases to be part of European Union, this would start a two-month time period at the end of which any domain registrant whose contact address is not in the EU (a code phrase for any registrant whose contact address is in the UK) would lose the domain name.

Presumably most domain name owners in this situation would do whatever is needed to adopt some sort of contact address that is within the (post-Brexit) European Union.

The most recent development, which you can see here, is that these plans regarding dot EU domain names will be put on hold for the time being.

If I were a UK-domiciled registration of a dot EU domain name, I would be watching this very closely.

In several recent posts I blogged about Afex.com, a provider of international wire transfer services.  By now we have migrated nearly all of our international wire transfer activity away from previous vendors and over to Afex.  The user documentation for Afex is, said charitably, extremely limited.  The documentation seems to assume that the reader is already an extremely experienced user of legacy wire transfer services, such that the reader only needs to learn a few things about Afex to be able to do all of the things that the reader already knew how to do with a legacy wire transfer service.  What’s more, the documentation does almost nothing to explain how you would actually use the system if you are an intellectual property firm.

If you already have service set up with some wire transfer service provider, it would be very tempting to stick with what you know and are familiar with.  But as I mentioned here and here, many of the legacy service providers really charge quite a lot, both in bank fees and in currency exchange rate fees, compared with what Afex charges.  So it might be smart to start using Afex.  The problem being that the documentation is so poor.

With this in mind, I have written a user guide that draws upon our experience using Afex.com to pay foreign IP firms and foreign IP offices (e.g. WIPO, KIPO) and using Afex.com as a way to receive bank wires from foreign IP firms.  You can see it here.  Please post comments and suggestions below.

I recently blogged (here) that one of the best VOIP service providers, VOIP.MS, recently added a beta-test feature permitting high quality encryption in the connection between your telephone equipment and the VOIP.MS equipment.  The connection is called a “SIP trunk”, which has two ends — one end is at VOIP.MS’s server and the other end is at your own equipment, which might be a PBX, a desktop telephone, an analog telephone adapter, or a VOIP app that runs on your smart phone.

It is super easy to turn on the encryption at the server end — it is a matter of one mouse click at the web page of VOIP.MS.

Turning on the encryption at your own equipment might be a bit more difficult.  The main point of today’s post is that I have written a set of knowledge base articles explaining how to do this with each of three VOIP devices, namely:

• Grandstream UCM PBX
• Cisco SPA 122 analog telephone adapter
• Grandstream HT503 analog telephone adapter

At the time of the Cold War, if you wanted to have an extremely secure communication over an insecure communications channel, the only choice was to have somehow arranged an earlier secure communication over a secure channel.  The iconic image of a diplomatic courier handcuffed to a briefcase was no mere icon.  For many years at the height of the Cold War, the State Department distributed special phonograph disks to US embassies around the world containing the audio equivalent of the “one-time pads” that were used for secure encryption of character-based messages.  The briefcase containing the phonograph disk counted as the “earlier secure communication over a secure channel” that permitted a later secure communication over an insecure channel such as an international telephone call or a radio communication.  You can read about this program, called SIGSALY, in this Wikipedia article.  By now in 2019 you can have telephone calls that are nearly as secure as the SIGSALY communications, and there is no need for any “earlier secure communication over a secure channel”. And the equipment that you will use is inexpensive when compared with the prodigiously expensive SIGSALY equipment. Continue reading →

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This blog article is nominally an “office tech” article talking about how to encrypt your telephone traffic.  But it’s also a legal ethics article.  I suggest that the attorney’s ethical duty to preserve client confidences calls for the attorney to be continually aware of the confidentiality risks for various types of communications, and for the ways to protect those communications.  Today’s article talks about protecting your SIP telephone trunks, and it talks about how our firm’s favorite VOIP service provider has just now enhanced our options for protecting our SIP trunks. Continue reading →