OUTSOURCING

Outsourcing involves the transfer of the management and/or day-to-day execution of an entire business function to an external service provider. The client organization and the supplier enter into a contractual agreement that defines the transferred services. Under the agreement the supplier acquires the means of production in the form of a transfer of people, assets and other resources from the client. The client agrees to procure the services from the supplier for the term of the contract.

Reasons for outsourcing

Organizations that outsource are seeking to realize benefits or address the following issues:

• Cost savings
• Improve quality.
• Knowledge.
• Contract.
• Operational expertise.
• Staffing issues.
• Capacity management.
• Reduce time to market.
• Time zone.

Legal Process Outsourcing (LPO) is the industry in which in-house legal departments or organizations outsource legal work from areas where it is costly to perform, such as USA or Europe to areas where it can be performed at a significantly decreased cost, primarily INDIA. Legal Process Outsourcing is a high end industry that has been growing rapidly in the recent years.

Legal Process Outsourcing covers the following services in general:

• Legal Research
• Document Drafting like standard contracts, agreements, letters to the clients, patent applications etc.
• Legal Billing activities like preparation of invoices, collation of time sheets etc.
• Intellectual Property research--substantive and administrative
• Paralegal Services
• Administrative and secretarial activities like following up with clients, etc.

The work is done by experienced paralegals and attorneys using industry standard databases like Lexisnexis and Westlaw. The main criteria for deriving value from such services is the level of maturity of delivery processes of the service provider. Also sufficient control should be exercised on the operations to ensure that the work is delivered to the level of expectation of quality of the client and the data is secure.

Effects of Outsourcing

The Outsourcing market is estimated to grow tremendously in the coming few years with an increasing number of companies planning to outsource both low-end and high-end jobs to offshore destinations. Also the number of companies providing outsourcing services is on the rise, thus resulting in larger variety. Due to the fact that more and more companies are outsourcing, the risks are getting smaller as businesses have more experience and clearer objectives.

Outsourcing in the world today is seen as a strategic management option rather than just a cost cutting operation. It aids companies to achieve their business objectives through operational excellence and a better market position.

However, the concept of outsourcing has been criticized. The negative attitudes toward offshore outsourcing have been mostly discussed by parties in the US and UK, due to job losses in the mentioned countries. Some people in countries like the US feel that outsourcing is threat to their economy. Outsourcing jobs to offshore destinations, is causing unemployment in the minds of some people.

On the other hand not only does outsourcing have benefits for the company it also has positive implications or effects on a larger level. Outsourcing will ensure that companies can pass the reduced costs to national consumers or for investors to reinvest. New revenues will be created as outsourcing to a foreign country will establish demand for the company’s national products, especially in high-tech products. Although some national jobs may be lost in the outsourcing process, other jobs will then be filled generating additional value for the economy.

Both negative and positive effects of outsourcing can be recognized. Positive effects of outsourcing can include concentration on core business areas, world-class technology at lower rates, skilled manpower at affordable prices, increased productivity, competitive advantage and tax benefits. Negative effects of outsourcing can be decreased quality, increase in time-to-market, poorer customer service, hidden costs, loss of control, unreliable vendors and negative long-term effects on business.

Large investment businesses have large legal and compliance staffs but for smaller institutions, the challenge of attracting and retaining in-house lawyers with sufficient expertise at a cost that isn’t prohibitive can be daunting, if not impossible. Obtaining these services from law firms is obviously an alternative, but someone inside the company – someone who knows its needs and how to manage the lawyers – has to remain involved -- a task that takes time away from other responsibilities. Yet the failure to pay close attention to legal and compliance issues is a risk that is too great to take.

Outsourcing in India

The majority of outsourcing contracts are moving to India, even though countries like China or Russia are offering better rates in some of the services. The dollar buys a lot in India and companies in the USA are saving billions of dollars by outsourcing their non-core operations.

Cities such a Bangalore, Chennai, Calcutta, Pune and Mumbai are really jumping on the call center market boom and more and more Indian companies have started investing in the industry.

Outsourcing in India is developing by the minute with new companies, big and small, setting up shop at a very fast pace. As a result of the increase in the LPO operations, India is also seeing an increase in legal consulting services. The development of legal outsourcing to India over the last few years is definitely worth paying attention to. It is a modern day boon. Outsourcing grants businesses the freedom to dump non – core, yet important sectors of its administration on companies specializing in those very individual aspects. Thus, leaving the businessman free to wholly concentrate on other areas

Even though several other reasons can be listed up in favor of outsourcing, one must not overlook the disadvantages of it.

By outsourcing a business process, we tend to loose the managerial control. This happens because it is harder to manage the outsourcing service provider as compare to managing one’s own employees. Also because we generally tend to skip (or miss to calculate) the
potential hidden costs of outsourcing which includes legal costs of putting together a contract between companies and time spent on coordinating the contracts, we feel that outsourcing reduces the overall expenditure of a business process, one of the major reasons why a company goes for outsourcing. This hidden and missed out costs of outsourcing is hard to predict causing overall costs to be underestimated.

Another disadvantage is that outsourcing can also prove to be a threat to the security and confidentiality of issues of a company.

Outsourcing may also result into the possible loss of flexibility in reacting to changing business conditions, lack of internal and external customer focus and sharing cost savings. Loss of internally generated talent is yet another problem associated with the outsourcing as it may hamper the growth of an employee by depriving him from the experience he would have gained by handling the business issue himself then by passing it over to some other external party.

Thus before a company decides to outsource its business process, it must examine all the factors carefully. It may not happen that outsourcing becomes a reason for company to regret later.

MALINI

LEGAL REQUIREMENT BEFORE PURCHASING A PROPERTY.

The following are the basic requirement before purchasing a property.

I. Tracing of title for a Minimum period of forteen years,

Examples.

a) A purchaser intends to purchase a property at Alwarpet. The vendor of the property purchased the same in the year 2000. In this case, it is required to verify the title Deeds of the previous vendors tracing from 1993 or above. In case, the previous title deed is in the year 1888 then the same should be verified.

b) One Ramasamy purchased the property in the year 1964. He died leaving behind his wife and 2 sons and a daughter. The legal heirs of Ramasamy sold the property to Krishnan in the year 2001, the said Krishnan as vendor intended to sell the property to our client. In this case, Sale Deed as of 1964, Legal heirship certificate of Ramasamy and Sale Deed dt. 2001 should be verified.

II. Encumbrance Certificate:

a) An upto date NIL EC for a Minimum Period of 14 yrs is required.

It is required to check whether any Mortgage or charge reflects in EC, if so check whether the same has been discharged.

In case of existing mortgage, the vendor and the purchaser of the property can enter into an agreement for discharge of mortgage out of the sale consideration to be paid to the vendor by the purchaser.

In case of Equitable Mortgage also known as Mortgage by deposit of title Deeds with the Bank or any individual, check whether the mortgage has been discharged and the original title documents are in the hands of the vendor. Entry of equitable mortgage will not reflect in EC unless a Memorandum of entry for deposit of title deeds is registered in five thousand Rupees non-judicial stamp paper registered in concerned Sub-Registrar Office.

b) In case of attachment of property by order of court reflects in EC then, check whether the same has been raised. If not it is not advisable to proceed further.



III. Revenue Records:

Check whether Patta, Chitta, Adangal and other revenue records are issued in the name of the vendor. Patta is the essential document. The extent mentioned in the patta should match with the extent mentioned in title documents.


IV. Property Tax Receiept:

In case of house property or resale of a flat, It is required to verify whether the property tax receipts stands in the name of vendor and no tax dues were pending.

V. Approvals:

In case of land to be purchased, check whether Lay-out Approval for the subject property has been obtained from the concerned issuing authority.

VI. Building Plan Approval:

Building Plan Approval should be verified before purchasing a building. Check whether the seal of issuing authority and local authority is obtained. Example, The subject property is at Madipakkam, then, the approval of Tambaram Municipality and Madipakkam first grade Panchayat is required. In case of a property at Alwarpet – approval of CMDA and Corporation of Chennai is required.

VII. Acquisition Proceedings:

It is advisable to verify whether the subject property is under any acquisition or any proceedings for acquisition is pending. In case of property situated at coastal area, It is required to check whether the property does not affected by any of the provisions of coastal regulations.

VIII. Lis pendens:

“Caveate emptor” which means ‘Buyer should always beware’. The purchaser should verify whether the property intends to be purchased is under any litigation.


It is always predominant for every purchaser to verify that the subject property is a freehold property and free from encumbrances. It is required to verify all the original documents before purchasing a property and to visit the concerned SRO to enquire about the property, its location and its present guideline value.

E-discovery

Electronic discovery or e-discovery refers to any process in which electronic data is sought, located, secured, or searched with intention of using it as evidence in civil or criminal cases. The items subject to e-discovery includes text, images, calendar files, databases, spreadsheets, audio files, animation, Web sites, and computer programs. Moreover, documents or data compilations, word processing documents, e-mails, voice mail and instant messages, blogs, backup tapes and database files are also discoverable as electronic documents.

Courts have opined that for the purpose of discovery proceedings, electronic data can be categorized as active on-line data; near-line data; off line storage/archives; backup tapes, and erased, fragmented or damaged data[1]. Generally, the first three categories of data are considered accessible and the last two categories are considered inaccessible. Even though the time takes to obtain accessible data ranges from milliseconds to days, accessible data does not need to be restored or otherwise manipulated to be usable. On the other hand, inaccessible data are not readily usable unless, the data such as the backup tapes, fragmented data, and erased data are restored, de-fragmented, and reconstructed respectively.

Recently, United States District Court for the District of Minnesota has held that data which is located on archived, electronic back-up tapes is not reasonably accessible[2]. Electronically stored information that is not reasonably accessible will be subjected to discovery only for good cause. Even though, electronically stored information is not reasonably accessible, the party has a statutory duty to preserve it. Whether a responding party is required to preserve unsearched sources of potentially responsive information that it believes are not reasonably accessible depends on the circumstances of each case. It is often useful for the parties to discuss this issue early in discovery.

The form of production is more important to the exchange of electronically stored information. In the absence of any specified request regarding the format, electronically stored information can be produced in a form or forms in which it is ordinarily maintained or in a form or forms that are reasonably usable. A party that responds to a discovery request by simply producing electronically stored information in a form of its choice, without identifying that form in advance of the production, runs a risk that the requesting party can show that the produced form is not reasonably usable and that it is entitled to production of some or all of the information in an additional form.

Most of the courts have taken the view that electronically stored information has to be produced in its native format. Recently, District court for Eastern Missouri, ruled that electronically stored information should be produced in electronic format, by granting plaintiffs motion for production of electronically stored information in its native or other usable format[3]. Kansas District court also opined that electronic documents have to be produced in native format[4]. District court for the Southern District of New York ordered that documents already produced in hard copy form be produced in electronic format[5].

Electronic discovery can constitute confidential attorney work product and can involve privileged attorney-client communications. Considering whether an e-mail communication was privileged under the attorney-client privilege, Indiana District Court held that, while resolving disputes involving the attorney-client privilege as to electronic communications, the courts have to apply the same tests which apply to traditional paper documents[6]. Several courts have indicated that discoverable electronically stored data includes voice mail[7]. Courts have employed the same procedures for determining whether voice mail is privileged as they would in analyzing other types of communications. Insofar as voice mail satisfies the elements of applicable privileges, it will receive protection comparable to that accorded to other types of privileged communications[8].

In light of new standards for electronic discovery, litigants must take a proactive stance in the face of potentially relevant electronically stored information. A duty to preserve evidence exists when a party has notice that the evidence is relevant to litigation or when a party should know that the evidence may be relevant to future litigation. Many of the State Courts have recognized intentional destruction of electronic evidence as spoliation and ordered monitory sanctions including attorney fees or fines. The Columbia District Court issued a $ 2.75 million sanction against Philip Morris for the destruction of electronic records[9]. Even the 2006 amendment is not fully exhaustive to face the challenges created by e-discovery.

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[1] Zubulake v. UBS Warburg LLC, 216 F.R.D. 280

[2] Best Buy v. Developers Diversified Realty2007 U.S. Dist. LEXIS 7580

[3] Lawson v. Sun Microsystems, Inc., 2007 U.S. Dist. LEXIS 65530

[4] Williams v. Sprint/United Mgmt. Co

[5] In re Honeywell Int'l, Inc. Sec. Litig., 2003 U.S. Dist. LEXIS 20602

[6] Long v. Anderson Univ., 204 F.R.D. 129, 134 (S.D. Ind. 2001)

[7] Bayer Corp. v. Roche Molecular Sys., Inc., 72 F. Supp. 2d 1111, 1121 (N.D. Cal. 1999)

[8] Lewis v. UNUM Corp. Severance Plan, 203 F.R.D. 615, 617 (D. Kan. 2001)

[9] United States v. Philip Morris USA, Inc., 327 F. Supp. 2d 21