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OUTSOURCING LAW & BUSINESS JOURNAL (TM)

OUTSOURCING LAW & BUSINESS JOURNAL (TM): Strategies and rules for adding value through strategic alliances, joint ventures, shared services and cost-effective, durable and flexible sourcing of services.

Insights by Bierce & Kenerson, P.C. www.outsourcing-law.com

Vol. 5, No. 3 (March 2005)

1.  Litigation:  Failed Deals, Bankruptcy and Class Action Securities Fraud in Global Outsourcing: In re Alcatel Securities Litigation.

2.  Securities Law:  Summary for Outsourcing: Securities Frauds by Enterprise Customers or their Service Providers.

3.  HR Outsourcing:  Consolidation of Service Providers in HR Outsourcing:
What Impact on Customers?

4.  News from India: Foreign companies having joint ventures in India no longer require the Indian partner’s consent to enter into new ventures.

5.  News from China (sort of): Lenovo's Private Equity Investors.

6.  Privacy Laws Affecting Outsourcing: U.S. 2005 Legislative Agenda, as of March 15, 2005.

7.  Humor
       
8.  Survey Question of the Month

9.  Seminars & Conferences

10.  Calling All International Outsourcing Lawyers

11.  White Papers

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1.    Litigation:  In a pre-Sarbanes-Oxley time, the hyper-growth Dot.Com era disintegrated into "Dot.bomb" implosions.  Reciprocal deal-making in speculative ventures was almost the norm, particularly in telecommunications.  The litigation aftermath of failed deals, bankruptcy and class actions for securities fraud is reaching resolution.  This short case study provides a synopsis of some key points of failure in reciprocal transactions, with a focus on telecom. For more, see: www.outsourcing-law.com/litigation/securitiesfraud/alcatellitigation.2005.03.21.htm


2.    Securities Law:  Summary for Outsourcing: Securities Frauds by Enterprise Customers or their Service Providers.  When can an investor sue a company and its "control persons" for securities fraud relating to outsourcing?  This article outlines U.S. federal securities law for a typical "garden variety" securities fraud claim.  In this discussion, we are addressing U.S. federal law for companies whose securities are registered with the Securities and Exchange Commission for trading on a securities exchange in the United States.  This could include foreign issuers who register American Depositary Receipts for trading of interests in foreign company shares held by a U.S. trustee. For more, see: www.outsourcing-law.com/SecuritiesLaw.2005.03.21.htm


3.    HR Outsourcing: Consolidation of Service Providers in HR Outsourcing:
What Impact on Customers? IBM's acquisition of PricewaterhouseCoopers' consulting practice for $3.5 billion a few years ago has triggered a wave of recent mergers. For more, see: www.outsourcing-law.com/ServiceProviderConsolidation.2005.03.21.htm


4.    News from India: Foreign companies having joint ventures in India no longer require the Indian partner’s consent to enter into new ventures. We have the following information from an Indian law firm that addresses joint ventures between Indian and foreign owners.  Effective December 12, 2004, new rules govern the rights of foreign members of an Indian joint venture. 
For more, see: www.outsourcing-law.com/IndianVentures.2005.03.21.htm

5.    News from China (sort of): Lenovo's Private Equity Investors. A news report from the Wall Street Journal of March 23, 2005 identifies three new private investors in Lenovo Group Ltd., the purchaser of IBM's PC division.   Why now?
For more, see: www.outsourcing-law.com/ChinaNews.2005.03.21.htm


6.    Privacy Laws Affecting Outsourcing: U.S. 2005 Legislative Agenda, as of March 15, 2005. In February and March 2005, some major data aggregators/resellers, including ChoicePoint Inc. and LexisNexis, allegedly suffered massive fraudulent intrusions into data bases that contained personally identifiable information including the Social Security numbers of thousands of people. Congress has been aware of a need for privacy legislation and a number of new bills are under consideration. For more, see: www.outsourcing-law.com/privacylaw.htm

7.    Humor: 

"Miss Piggy" Clause, n.   (1) contractual provision drafted to give unilateral advantage to one party, such as "Party X can change the deal without paying extra"; (2) a contractual provision that might transgress the implied covenant of good faith in the implementation of contracts, defeating the basic rule pacta sunt servanda (contracts are for implementation), such as "in case of dispute, the parties will negotiate in good faith, but if that fails, Party X has the deciding vote"; (3) my kind of bargain; (4) litigation fodder.

Laptop Dancing, n.  (1) simultaneous management of multiple documents while away from the office using high speed Internet; (2) road warrior entertainment.

Amerishoring, n. (1) performing services in the United States; (2) moonlit stroll.

"Lift and Shift," n.  (1) migration of processes from customer's service delivery environment to the service provider's service delivery environment; (2) structure for a pure wage arbitrage, geographical diversification or customer's exit from a business function; (3) cousin of "pump and dump;" (4) outsourcing with transformation.

8.    Survey Question of the Month:

Should either party ever have the unilateral right to change important elements of an outsourcing agreement? Go to: http://outsourcing-law.com/survey.asp?ID=80


9.   Seminars & Conferences:

Gartner Outsourcing Summit 2005, April 4-6 2005, Los Angeles, CA. Get unbiased, road-tested strategies for setting sourcing objectives, evaluating and selecting the right services providers, managing relationships and delivering profitable outcomes. Ensure that your IT and business-process outsourcing (BPO) initiatives are designed and implemented to deliver sustainable value. And get proven best practices and practical advice from the world's leading sourcing experts. For more, go to: www.gartner.com/2_events/conferences/std8.jsp

The HRO World 2005 Conference and Exhibition, April 11-14th. HRO World is part of NY HR Week 2005, the nation's second largest HR Forum, and features six great events. In addition to HRO World Conference & Exhibition, NY HR Week is made up of the HR/NY Solutions Conference (local NYC SHRM Chapter), TecHRWorld, The HRO/FAO Executive Summit, The HROA General Assembly Membership Meeting and HR-XML's Consortium's Quarterly Meeting. With over 200 exhibits and 100 conference sessions, NY HR Week is a must attend event for the HR Executive/Professional. HRO World 2005 keynote speakers include: Lea Soupata, Senior Vice President, HR, UPS; John Sculley, Chairman, Verified Person, and former CEO Pepsi & Apple Computer, and Rick Perry, Governor of Texas. Also back for the second year is the extremely popular HRO Provider Presidential Debate. For an entire agenda or to register today please visit www.nyhrweek.com. For exhibiting information, please contact niannotta@unicomm.org. Outsourcing-Law.com is a Media Sponsor of HRO World 2005. Bill Bierce will be a panelist and has been nominated for same.

Outsourcing Summit, April 17-19, 2005, Phoenix Marriott, Mesa, AZ. Outsourcing is being recognized by savvy executives as a key strategy for helping companies focus on their core capabilities and achieve bottom-line benefits. This Summit will bring together leading outsourcing service providers with Chief Procurement Officers, CFOs and CIOs to discuss the latest trends and developments. The Summit Program will follow three tracks: Corporate, Federal Government and Information Technology and will feature keynote, R. Glenn Hubbard, Chairman of the Economic Council of Advisors.

Key topics will include:
- Change management: alleviating the risk of employee resistance
- Safeguarding your data
- Nearshore or offshore? Making the right choice
- Intellectual property protection
- A buyer's guide to getting a fair price for your IT outsourcing solution

For more info, go to: www.outsourcing-summit.com or email finance&legal@marcusevansbb.com or phone 246.417.5326.

10.    Calling All International Outsourcing Lawyers: 

Are you a creative non-U.S. lawyer with significant experience in international outsourcing? Do you know anyone who fits this description? If so, we would like to get to know you. Please contact Ed Fortune at efortune@biercekenerson.com about the types of services that you have helped outsource, whether you focus on service providers or enterprise customers (or both), and any deal structures that you have found particularly useful. 

Please send us your newsletters on outsourcing-related topics and advise us on your policy regarding republication in Outsourcing Law & Business Journal™ and www.outsourcing-law.com. Thanks you.


11.    White Papers: Informative, Timely, Comprehensive. Purchase our exclusive White Papers and Articles now:

• Business Process Transformation: Legal and Business Issues in Business Renewal and Sourcing Strategy. 
  

• Impact of New Sarbanes-Oxley-Based Disclosure Rules on Business Process Outsourcing: 
  

• Limitations on Liability Article: Public Policy Exceptions Under New York Law

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