Thursday, December 18, 2008

Legal Outsourcing Ethics

The newly passed Limited Liability Partnership Bill 2008, together with the amendments to the Companies Act, allow formation of partnerships, in which liability of the partners is limited and also remove restrictions that were in place ever since the Companies Act came into existence. Not only will Indian professionals be able to set up shop outside the country but foreign firms will find it easier to bring their business to India, since the new provisions bring great flexibility in operations to companies and put India on par with global provisions in this respect. Under the new provisions, winding up of the entity is also made easier since the more severe strictures provided under the Indian tax law can now be avoided.

All this is good news for legal process outsourcing in India, which is already on an upward spiral. It will result, and indeed already has, in a rash of small LPOs crowding the outsourcing scene. Some of these will be swallowed by the bigger corporations but the feistier ones will thrive. The ultimate test of success or survival of any LPO, whether it is a huge corporate or a smaller firm, will be the amount of business it will be able to attract. This race to fetch business is going to be a breathtaking one and could result in the breaking of many an outsourcing rule.

A major concern in legal process outsourcing has always been maintaining confidentiality of client data and preserving the attorney –client privilege. The ethics of legal process outsourcing however, is not confined to just these two issues. It also includes an ethical procurement of business. In the face of cutthroat competition service providers might well be tempted to throw any or all of these considerations of ethics to the winds and overlook unethical behavior on the part of its management, in the face of their ability to bring business to the firm.

While outsourcing work, legal process outsourcers generally make an enquiry into past projects, the technical competencies of the LPO, and outsourcing ethics. While every LPO highlights its technical know how and the projects undertaken, by it, its concern as regards outsourcing ethics seem in comparison, remarkably downplayed. Any LPO that intends to develop a reputation for soundness in business would do well to guard against unethical conduct not only by employees but also by its management.

The outsourcer, while enquiring into the credentials of an LPO, must therefore carefully scrutinize not only the credentials of the legal professionals employed in the LPO, but also the professional background of the persons in charge on either side of the pond. In the interests of security and the ultimate survival of the LPO, the professional ethics of management personnel in an LPO should be the most important consideration, more even than his or her qualifications, capability, or ability to bring business to the LPO.

Not only the outsourcer but legal professionals too, should assess options carefully. Job hoppers need only consider infrastructure, ergonomics and the pay scales; but those discerning lawyers who intend to make a career in legal outsourcing must scrutinize the type of work being provided by the LPO and take a careful look at the background and history of the company. No matter how upscale the LPO, and how impressive its roll call of directors, if the business ethics of even one is unsound, it takes very little to bring down the edifice and you with it.


Manisha said...
This comment has been removed by the author.
Manisha said...

Dear Rosemary [once a witch always a witch],

I marked your blog as “interesting”, and I have a reason for it. Your first para, speaks about the amendment in our companies Act and the various benefits of it. Soon the same para ends with statement stating, "the amended new provisions HELP companies in winding up, wooooo". Believe me, as an employee the winding up phase is not at all beneficial rather very traumatic, ominous and painful.
Voila, the witch quoted it, from employer’s perspective I Guess! But I hope people/companies/blooming LPOs don’t make this a habit.

Rosemary said...

Glad you find it interesting. As a lawyer, I try to see both sides of the picture.
As for being a witch, that image is strictly for

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