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Archive for ‘Outsourcing’

Mandatory Change in an Outsourcing Relationship

Although it is now customary for outsourcing agreements to include extensive change management provisions, not all of them include “Mandatory Change” or “Directive” provisions. These are provisions that entitle a Customer to require its Service Provider to start work on a particular change on a priority basis and without compliance with the often extensive provisions that have been inserted into the outsourcing agreement specifically to ensure that the Service Provider does not start work on a change until there is a written agreement around all of the terms and conditions. The need for Mandatory Change provisions can arise, for example, . . . [more]

Posted in: Outsourcing

The Evolution of LPO

Prominent in-house lawyers have warned Australian law firms that legal process outsourcing is no passing fad. Speaking at the Australian Corporate Lawyers Conference, Telstra general counsel Sue Laver said LPO in Australia is the “next wave” in legal services and as clients, Australian corporates needed to be actively encouraging firms to take action.

Malisons’ Stephen Jaques announced last month that it would be offering LPO to all clients where appropriate, following a trial run on a discovery project. According to Sue Laver, as a result of the quality of work and cost savings on the discovery project Telstra would now . . . [more]

Posted in: Outsourcing

Service Level Agreement in Outsourcing Contracts

A service level agreement (SLA) is a critical part of any outsourcing contract. SLA defines the boundaries of outsourcing project in terms of the functions and services that the service provider will deliver and identifies the service standards that the service provider must meet. A well-drafted SLA accurately sets expectations for both parties and provides guidance for measuring performance to the defined targets.

Although there is no hard and fast rule governing how many measurements the parties should include in each SLA, it only makes sense to measure what matters to customer. Customer may tend to think that the more . . . [more]

Posted in: Outsourcing

One Stop Shopping

As the global demand for lower cost and efficient legal services grows, we will see new innovations in the delivery of these services. Integreon, a global provider of outsourcing services recently announced the opening of its legal process outsourcing (LPO) onshore UK delivery centre.

The facility in Bristol will provide a full suite of LPO services, including document review, contract management, merger and acquisition (M&A) due diligence and compliance support.

This is an interesting turn of events in the LPO space. The whole premise of LPO services is the significant cost advantage of the service (amongst other benefits) over local . . . [more]

Posted in: Outsourcing

Cloud Computing – the Privacy Conundrum

Last June we read with interest Zack Whittaker’s article Microsoft admits Patriot Act can access EU- based cloud data . The article focuses on the effects of the USA Patriot Act on cloud computing. Interestingly, the article states an admission made by the managing director of Microsoft UK that cloud data, regardless of where it is in the world, is not protected against the USA Patriot Act. As the data processor for cloud computing services, Microsoft, a US based company, can be compelled to hand-over data to the US authorities without any kind of prior notice or consent (even where . . . [more]

Posted in: Outsourcing

Legal Issues in Offshore Outsourcing Contracts

Recent research published by industry analyst Gartner shows that the business process outsourcing sector will expand by 5 per cent in 2012, with multinational companies leading the charge. Business process outsourcing is seen by many companies as a means of reducing costs. Companies have been engaging in outsourcing (both information technology and business process services) for many years. Use of foreign-based third party service providers is also not new. While many of the issues are not unique to offshore outsourcing engagements, offshoring highlights the importance of some of the challenges.

Companies have been outsourcing various types of business processes to . . . [more]

Posted in: Outsourcing

Dealing With Disasters

This column was prompted by an article in the Toronto Globe and Mail’s Report on Business during that post-Christmas period of year-end retrospectives. In “Earthquake. Tsunami. Floods. Here is how a battered industry is getting back on its feet” (Globe and Mail, December 27, 2011), Greg Keenan analyzed how Japanese automakers were affected by recent natural disasters: last March’s powerful earthquake and tsunami and the Thailand floods. The devastating impact was aggravated by problems with the automakers’ suppliers: the automakers suffered severe parts shortages but were unable to adjust to these problems because of their inability to obtain . . . [more]

Posted in: Outsourcing

LPO Outlook for 2012

Fronterion, an international management consultancy which focuses exclusively on advising law firms and corporations on outsourced legal services recently published a report on the Top Ten Trends for Legal Outsourcing in 2012.

The Top Ten Trends for LPO in 2012 are:

1. Profitability Squeeze for LPO

The shrinking gap between wages in the developing and developed countries will squeeze margins for LPO vendors in 2012.

2. Growth Beyond Litigation Support

Large‐scale litigation was one of the first outsourced legal services to gain widespread adoption and remains by far (particularly in the US) the most popular. In 2012, LPO vendors . . . [more]

Posted in: Outsourcing

CSAE 3416: the New Standard

Third party assurance reports have become an integral part of outsourcing transactions: they represent an auditor’s report on the controls in place at a service provider that impact a customer’s financial reporting. In this posting, I want to look at the new Canadian standard, CSAE 3416. Before doing so however, I want to consider third party assurance reporting in more detail.

Third Party Assurance Reporting

Third party assurance reports relate to the control objectives and controls established by a service provider, i.e. it is the service provider that is responsible for the control objectives relating to its business, the specific . . . [more]

Posted in: Outsourcing

Ethical Considerations in IT Contracting: Part One

‘Tis the season! For the holidays, et cetera, but more particularly for CLEs which meet the Law Society for Upper Canada’s new requirements for professionalism and ethics. Every lawyer called to the bar in Ontario must complete three hours of continuing legal education approved by LSUC that is directed to instructing on professionalism and ethics. In the mad rush to meet the year-end deadline, CLEs are popping up all over the place directed to this topic.

IT Professionalism and Ethics CLEs: An Introduction

For outsourcing and information technology lawyers, it was a challenge earlier this year to find relevant seminars. . . . [more]

Posted in: Outsourcing

Termination Right in an Outsourcing Contract

Exit provisions are one of the most important contractual protections for a customer in an outsourcing relationship. The provisions provide the framework to allow a customer to continue its business during transition and provide leverage for the customer in renegotiating the contractual terms. It is important to carefully draft the exit provisions because they will be used when the relationship between customer and service provider is not at its best.

A well-drafted outsourcing contract enables either party to terminate the arrangement prior to the agreed-to end date in a fair and reasonable manner. This is not to say that the . . . [more]

Posted in: Outsourcing

GC’s Have the Power

Professor Mari Sako, a fellow of the Novak Druce Centre for Professional Service Firms at the University of Oxford’s Saïd Business School published a very interesting paper titled General Counsel With Power? From May 2010 to January 2011, Sako interviewed 52 GCs in the US and UK with the aim of analyzing what is happening in the in­house legal departments of major corporations and financial institutions. Interviews explored various areas including the changing relationships with law firms; the extent to which work has become disaggregated; and how multi-sourcing (i.e. the use of multiple sources of legal service delivery, including outsourcing . . . [more]

Posted in: Outsourcing