OUTSOURCING
LAW GROUP
Outsourcing has become an essential management tool
for all businesses. Attorneys at
Bierce & Kenerson, P.C. have been called upon by both outsourcing customers
and service providers to advise on structuring and negotiating contracts that
manage the risks inherent in such relationships.
We work hard to develop close relationships with our clients to
understand and promote their particular needs, constraints and goals.
Our experience in representing both service providers and customers in
different service sectors enables us to deliver unique lateral-thinking
insights.
Vertical
Industry Sectors
Our understanding of outsourcing across several
industry domains allows us to provide added value in supporting our clients’
interests. Our attorneys have
advised a wide range of public and private companies in diverse sectors.
These include, for example:
- banking and financial management services.
- insurance.
- pharmaceuticals and health services.
- manufacturing and heavy industry.
- power industry, including mining, petroleum and natural gas for
retail, trading and generation.
- accounting and financial advisory management services.
- consumer goods.
- human resources.
- transportation and logistics.
- publishing.
- not-for-profit associations.
- educational services for profit.
Outsourcing
involves the transfer of a business function or process to a service provider
under a carefully negotiated contract. Our
attorneys have helped clients in the
·
ITO: information
technology management, such as:
o
computing infrastructure, including mainframes, distributed computing
and Internet and systems integration.
o
software, including systems development, enterprise resource planning,
software maintenance and upgrades and website development and operations;
open-source software and its relationship to proprietary software and services.
o
services, including security, disaster recovery, project management
office, help desk, e-commerce website hosting and transactions processing,
security management, content management, business process management.
o
telecommunications services.
·
BPO: managed
business processes, such as:
o call centers and customer relationship management
o
accounting and receivables management.
o
mortgage origination and issuance.
o
engineering design services for aerospace manufacturing.
o
financial modeling services for financial institutions.
o
subrogation receivables management.
o
third-party administration of healthcare services.
o
publishing and membership administration services for non-profit
organizations.
o
hedge fund compliance support services.
·
HRO: human
resources management and IT-enabled administrative support services, involving
o
employment life cycle administration (recruitment process outsourcing,
on-boarding, administration of promotion and terminations, post-separation
relationship management).
o
training and human capital management.
o
payroll processing.
o
medical and welfare benefits plan administration for current employees
and retirees.
o
supervision of other HR services providers ranging from employee
relocation to ERISA fund administration.
o
workforce planning, sourcing and selection, rewarding and retaining,
development and counseling/ compliance and performance management, redeployment
and retirement, and information vendor management.
Roles
As attorneys, we remain flexible in the roles that we
offer to support our clients’ business endeavors.
In outsourcing, we have acted in the following capacities:
- lead
counsel and chief contract negotiator, and coach to client’s in-house
legal team or, where it has no in-house legal team, its regular external law
firm.
- co-counsel
with foreign legal counsel.
- specialist co-counsel supporting the client’s normal external law
firm.
- co-counsel to:
- outsourcing service provider’s specialized in-house legal team.
- customer’s non-specialist in-house legal team.
- coach and legal consultant to:
- experienced in-house legal services team, acting in the background
without appearing as negotiator.
- in-house sales and services delivery teams, as part of the launch
of a new suite of managed services.
- legal compliance project management, including:
- review, reporting and technical issues in compliance with
statutory, regulatory, standards and contracts; compliance reporting
techniques and tools.
- due diligence advisor to private equity investors and venture
capitalists to:
- identify alignment of outsourcing contracts to the stated
business model.
- propose improvements in the portfolio company’s service model.
Recent
Projects
The
following list of projects is a sample of the kind of services that we render.
We have done many more.
Multinational
HRO Services.
As the telecommunications industry consolidates and the tasks of its
personnel are redeployed across the globe, telecommunications service providers
need flexibility to administer their employment relationships in a flexible
manner. We successfully
negotiated a four-country Americas agreement that allowed the telecom employer
to achieve fixed per capital variable pricing based on variable headcount,
discounts for economies of scale, and local accountability and control by the
telecom employer's affiliates over the life cycle of recruitment, on-boarding,
compensation administration, benefits administration, severance and retirement
administration.
Multinational
HRO Services.
A global producer of household and commercial cleaning supplies wanted to
hire an HR service provider to facilitate post-merger consolidation.
We successfully negotiated a multinational agreement including North
American and European countries for management of SAP applications.
Scope included planning services, common processes, common service, service center, application services,
personnel
administration, benefits and payroll.
ICT
Infrastructure Management for Global Intergovernmental Organization.
A global intergovernmental organization, with operations in over 160 countries,
wanted assistance in managing its IT and communications infrastructures.
We advised the organization in its successful completion of negotiations
with a single service provider.
ICT Infrastructure Management. We have advised enterprise
customers and service providers on management of IT and communications
infrastructures. For
a group purchasing organization, we negotiated a transaction for multiple
services including mainframe data
center, LAN, WAN, help desk, telecommunication management and desktop. As
an interim “emergency” measure, we negotiated a separate support agreement
involving temporary assignment of key vendor personnel to manage operations and
certain applications, and to develop certain new applications.
Similarly, for a mining company, we advised on strategic outsourcing and
cost-based outsourcing issues involving the entire information technology
infrastructure. Also, for a county
government, we advised legislators on outsourcing substantially the entire IT
services department
ICT
Web Publishing for Global Membership Organization.
One of the largest scientific publishing companies hired Bierce &
Kenerson, P.C. to structure and negotiate print and Web publishing and
fulfillment services for a foreign membership organization with thousands of
members. Complex issues of
international privacy and legal compliance required special attention.
IT
Infrastructure for “Greenfield” Outsourcing for New Entrant into U.S.
A foreign publicly-traded company in a regulated industry hired Bierce
& Kenerson, P.C. to structure and negotiate a contract with a global
information technology services provider with specialized industry expertise.
Our client was entering the U.S. market without prior infrastructure and
chose to hire a service provider rather than create their own.
BPO
- Banking.
A U.S. retail bank hired a foreign service provider to manage the process
of loan origination, approval and servicing of mortgage loans that fit within
specified parameters. Scope also
includes retail banking and support of a foreign affiliate of the U.S. bank.
The foreign service provider's role was to offer a suite of services, on
various pricing models, for staff augmentation or managed infrastructure support
for the bank's foreign affiliate. We
advised the service provider on negotiations, compliance and intercompany issues
as well as rules applicable to the U.S. bank.
BPO - Insurance. For a publicly-traded
insurance company, we advised on third-party administration of sales,
underwriting, claims processing and other “non-core” functions.
As a result, the client was able to adopt new risk management procedures
and had a strategy for renegotiation.
For another insurance company, we advised in-house legal counsel on
recent changes in the laws governing foreign sourcing of technology services.
In a third deal, we negotiated a recruitment process outsourcing
agreement for the recruitment and hiring of about 4,000 exempt and non-exempt
U.S. employees for a leading international insurance company.
BPO
- Foreign Staff Augmentation.
For various U.S. publicly-traded companies, we have advised on
establishing, marketing and operating foreign operations to support U.S. and
European customers. Our
client’s offered services in staff augmentation, project management and other
human resources management services.
BPO
– Inauguration and Initial Operation of Turnkey Captive Subsidiary for
Insurance Company in India.
For a global services provider, we advised on structure and negotiated a
service agreement whereby the services provider assisted a Fortune 100 insurance
company in establishing and running its foreign captive services center.
The transaction involved complex tax, regulatory, intellectual property
and operational allocations of responsibility arising from the concept of
"turnkey" captive formation, recruitment, training and supervision and
performance obligations using teams of employees from both the service provider
and the insurance company's Indian subsidiary.
Business
Process Transformation and New Ventures from Internal Service Operations.
For a public utility, we assisted in converting the business process from
providing maintenance services for internal consumption to a customer-facing new
line of business in maintenance and administrative services for electrical
substation facilities for municipal utilities and private energy generators.
We advised a global pharmaceutical company on how to convert from a
similar in-sourced internal market function to a customer-facing new line of
business in the importation of FDA-regulated drugs.
Finance
and Accounting Outsourcing. For
a foreign service provider, we negotiated and concluded a multi-year services
agreement to provide passenger revenue accounting, including inter-airline
accounting and accounts receivable and payable administration, to a global major
U.S. airline. We have also
provide similar services for finance and accounting for a top consumer products
company in the field of home improvement products and a major financial advisory
services company.
IT
- Foreign Software Development.
For a publicly-traded mining company with specialized applications,
we advised on sourcing of software development, conversion and support services
to a foreign services provider.
IT - Shared Services Unit of a Joint Venture Subsidiary.
For two independent banks that jointly owned a common service company
providing information technology, we separately negotiated independent
outsourcing agreements to enable each bank to have its needs met by a separate
vendor. This involved the
simultaneous divestiture of the service functions to the vendors.
We did both transactions in a record time, thereby avoiding loss of
functionality by either bank during the transition period.
IT - Internet. For a leader in the health
care supply industry, we advised on outsourcing of internet functionality,
including extranets and supply chain integration among vendors, the client and
customers. We also advised on a
number of Internet Web site hosting agreements.
International
Projects
As
business becomes irrevocably globalized, executives and their in-house legal
counsel require niche advisory services on the design and implementation of a
global services network. Bierce
& Kenerson, P.C. has assisted both globalizing service providers and
customers.
In
such transactions, in conjunction with foreign law firms we have provided advice
on matters such as:
·
structuring of service offerings to U.S. customers.
·
establishing and operating U.S. sales subsidiaries, including
o
international tax and corporate planning;
o
human resources planning and labor law;
o
immigration and work visas for senior executives, investors and traders;
o
incentive compensation structures for senior American sales executives
to support foreign service delivery businesses;
o
corporate governance for foreign enterprises in the pre-IPO phase; and
o
regulatory compliance for U.S. laws and regulations governing
international outsourcing.
· establishing foreign sales subsidiaries for U.S. service providers.
·
joint ventures between U.S. service providers and foreign service
providers.
·
U.S. laws on privacy, data protection, human resource management,
exports, imports, finance, taxation, bankruptcy, securities and specialized
regulation of specialized services contracts.
·
international treaties, conventions and other sources of law.
·
liaison with foreign legal counsel on business planning and compliance
with foreign laws, including Europe and Asia.
Trends
for 2006 - 2007
As
experienced legal advisors on the business of outsourcing and outsourcing
transactions, we regularly comment on developing trends.
Consistent with some 2005 mega-deals and our experience in the mid-sized
and smaller deals, we anticipate that enterprise customers will pursue emerging
trends, which we have been advising on:
- multi-silo
sourcing, covering different types of services through one master provider.
- "multi-sourcing"
transactions, in which customers are negotiating with multiple service
providers to provide mini-competitions for individual statements of work.
- conflicts
of law and extraterritorial application of domestic law and domestic
operational principles, all of which require careful design, due diligence,
planning and execution of international outsourcing transactions.
- an
executive push to develop a contractual framework for an ongoing outsourcing
relationship before all the details are being resolved, which involves
selection of one or more service providers first and definition and
allocation of tasks second.
- acceleration of establishing foreign captive service centers, using outsourcing service providers to incubate them and ensure quality control and service level compliance before handing over new service centers to the enterprise customer on a turnkey basis.
Publications
and Industry Leadership
Bierce & Kenerson, P.C. attorneys are
industry leaders in the advancement of the theory and practice of outsourcing
worldwide. We deliver accredited
Continuing Legal Education seminars in international outsourcing to educate
other lawyers, particularly in-house lawyers, and business executives.
Our newsletter “Outsourcing Law & Business™” is the leading
e-letter on outsourcing law. For
some time, our website www.outsourcing-law.com has been
“number 1” under “outsourcing law” (and number 10 under
"outsourcing") at www.google.com
and www.yahoo.com.
We have been recognized by industry awards and press
coverage. One of our attorneys was
nominated for the Outsourcing World Achievement Award in 2000, was highlighted
as one of the top five lawyers in human resources outsourcing by HRO
Today magazine in 2003 and was awarded "HR Outsourcing Lawyer of the
Year" by the HR Outsourcing Association.
We have been quoted or referenced on outsourcing issues in The
New York Times, the Wall Street
Journal and the Financial Times, among
other leading publications.
One of our attorneys is extensively quoted (as an expert on international
outsourcing) by Lou Dobbs in his book Exporting
America (2004), and has appeared on CNN on international trade in
services. In the Chambers USA
2005 Guide to Preeminent Lawyers and Law Firms, we are listed among the top 10
nationwide law firms in the field of Business Process Outsourcing.
Staffing
Our typical engagement involves one or two senior
attorneys. We consult with
specialists and foreign lawyers as necessary.
We have developed a team of senior BPO lawyers available across the
United States, in California, Florida, Illinois, New York and Texas, as well as
Toronto, London, Sydney and other international capitals. We have professional
relationships with law firms in many countries where service providers are
seeking to support U.S. enterprises, such as Brazil, China, India, the
Philippines and Russia. We will
gladly discuss staffing options with prospective clients.
For
further information, or for a free copy of one of the White Papers listed at www.outsourcing-law.com/store,
contact Bill Bierce at 212 867 0033.
TM and © 2003-2006 Bierce Kenerson, P.C. All rights reserved.
v.2006-01-
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