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Outsourcing Law & Business Journal™: June 2010

June 30, 2010 by Bierce & Kenerson, P.C.

OUTSOURCING LAW & BUSINESS JOURNAL (™) : Strategies and rules for adding value and improving legal and regulation compliance through business process management techniques in strategic alliances, joint ventures, shared services and cost-effective, durable and flexible sourcing of services.  www.outsourcing-law.com. Visit our blog at http://blog.outsourcing-law.com for commentary on current events.

Insights by Bierce & Kenerson, P.C., Editors.  www.biercekenerson.com

Vol. 10, No. 6 (June 2010)
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1.  U.S. Discrimination against Foreign Call Centers: Sen. Schumer’s Personal Trade War.

2.  Business Method Patents for Business Process Sourcing : Strategies for Hedging Your Bets when Strategies for Hedging Weather Futures are Unpatentable under U.S. Supreme Court’s Bilski Decision.

3.  Humor.

4.  Conferences.

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1.  U.S. Discrimination against Foreign Call Centers: Sen. Schumer’s Personal Trade War. Call center operations can be conducted anywhere in the world without U.S. regulation, unless the activities involve regulated business services such as mortgage banking, consumer credit and lending, broker-dealer securities brokerage, life insurance sales and the regulated professions such as public accounting, the practice of law, engineering and architecture.  The Democrats and the Obama Administration appear to want to control call center operations more than the mere directive in the TARP program, which forbids the use of any federal funds by TARP stimulus recipients for foreign call centers.  Now comes Sen. Charles Schumer (D., N.Y.) with a proposal to tax all foreign call center calls at $0.25 per call, but exempt all U.S. call center calls from this tax.  For the complete article, click here:  http://www.outsourcing-law.com/2010/06/u-s-discrimination-against-foreign-call-centers/

2.  Business Method Patents for Business Process Sourcing : Strategies for Hedging Your Bets when Strategies for Hedging Weather Futures are Unpatentable under U.S. Supreme Court’s Bilski Decision. Business process outsourcing (BPO) has led many entrepreneurs and their investor cousins (sometimes called “patent trolls”) to seek patent protection for their business methods.   The long-awaited decision of the U.S. Supreme Court in Bilski v. Kappas, 561 U.S. ___ (June 28, 2010) was anticipated to lay down the groundwork for defining the parameters of patentable business methods.  Its decision disappoints the more than 60 parties that filed briefs on both sides of the debate over what is patentable.  Read more by clicking here:  http://www.outsourcing-law.com/2010/06/business-method-patents-for-business-process-sourcing/

3.  Humor.

Patent, n. (1) a legal monopoly until it is declared illegal, invalid, obvious or not useful; (2) bargaining chip for a standard agreement; (3) public declaration of what you do in private.

Patent troll, n. (1) non-operating owner of a business method that everyone uses; (2) sheriff deputized for highway robber.

4.  Conferences.

July 14-16, 2010.  IQPC Presents Shared Services for Finance and Accounting, Chicago, Illinois. The SSFA 2010 Summit brings together leading financial shared services experts to network, benchmark and learn through keynote presentations, interactive roundtables, case studies and discussion panels. This program will help you improve internal accounting processes, maximize your efficiency with less resources, make smarter sourcing decisions, and drive continuous value through your financial services.  For more information, visit http://www.sharedservicesfa.com/Event.aspx?id=314126

September 13-15, 2010.  5th eDiscovery for Pharma, Biotech and Medical Device Industries, Philadelphia, Pennsylvania.  Presented by IQPC, this event will bring together industry leaders from in-house eDiscovery teams, expert judges and outside counsel as they discuss:

• How the new Pension Committee decision will effect eDiscovery professionals in the life science industries
• The unique challenges biopharmaceutical and medical device companies face with respect to social media content
• Preparing and responding to FDA inquiries, patent issues, and other types of pharmaceutical litigation
• A progress report on the 7th circuit eDiscovery pilot program and its implications for Pharma and Biotech
• Reducing patient privacy risks and unnecessary disclosures due to indiscriminate document retention
• Discovering new technologies to reach your goal of gaining proactive control over all your data

To register and view the whole program, click here.

September 26-28, 2010.  IQPC Shared Services Exchange™ Event, 2nd Annual, to be held in The Hague, Netherlands. Shared Service Centres have long been seen as the cost saving centre of HR, Finance & Accounting and IT processes, but with changing employment trends and global challenges facing organisations, how can SSC’s continually offer service value?

Unlike typical conferences, the Shared Services Exchange™, which will be co-located with the Corporate Finance Exchange™, focuses on networking, strategic conference sessions and one-on-one meetings with solution providers. The Exchange invites strategic decision makers to take a step back from their current operations, see what strategies and solutions others are adopting, develop new partnerships and make investment choices that deliver innovative solutions and benefits to their businesses.

To request your complimentary delegate invitation or for information on solution provider packages, please contact: exchangeinfo@iqpc.com, call +44 (0) 207 368 9709, or visit their website at http://www.sharedservicesexchange.co.uk/Event.aspx?id=263014

October 21-22, 2010, American Conference Institute’s 5th National Forum on Reducing Legal Costs, Philadelphia, Pennsylvania.

The essential cross-industry forum for corporate and outside counsel who are truly motivated to create value and reduce legal costs through innovative fee arrangements, enhanced relationships, and streamlined operations

Come join senior corporate counsel responsible for cost-reduction success stories, as well as leaders from law firms that have pioneered the use of alternative fee arrangements and other innovative cost-reduction initiatives, as they provide a roadmap for navigating the complexities of keeping legal department costs in check. Now in its fifth installment, this event offers unique networking opportunities with senior practitioners from around the nation, including in-house counsel from a wide range of companies and industries.

Reference discount code “outlaw” for the discounted rate of $1695!  To get more information, visit www.americanconference.com/legalcosts

October 25-27, 2010, The 8th Annual HR Shared Services and Outsourcing Summit, Orlando, Florida. This will be a gathering for corporate HR & shared services executives from companies across North America to exchange ideas, develop new partnerships and discuss the latest tools, technologies and strategies being employed in the profession to enhance departmental efficiencies and propel corporate growth. The event will focus on the most current topics in the HR shared services industry including metrics, automation, outsourcing, globalization, compensation & rewards, benefits and an overall focus on the new strategic role of HR shared services.  We will review how to tackle change management, analyze current and future projects and further develop the instrumental key areas within HR shared services. Outsourcing Law contacts can receive 20% off the standard all access price when they register with the code HRSS5. Register by calling 212-885-2738. View the program brochure for more details by clicking here.

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FEEDBACK: This newsletter addresses legal issues in sourcing of IT, HR, finance and accounting, procurement, logistics, manufacturing, customer relationship management including outsourcing, shared services, BOT and strategic acquisitions for sourcing. Send us your suggestions for article topics, or report a broken link at: wbierce@biercekenerson.com. The information provided herein does not necessarily constitute the opinion of Bierce & Kenerson, P.C. or any author or its clients. This newsletter is not legal advice and does not create an attorney-client relationship. Reproductions must include our copyright notice. For reprint permission, please contact: wbierce@biercekenerson.com . Edited by Bierce & Kenerson, P.C. Copyright (c) 2010, Outsourcing Law Global LLC. All rights reserved.  Editor in Chief: William Bierce of Bierce & Kenerson, P.C. located at 420 Lexington Avenue, Suite 2920, New York, NY 10170, 212-840-0080.

U.S. Discrimination against Foreign Call Centers: Sen. Schumer’s Personal Trade War

June 30, 2010 by Bierce & Kenerson, P.C.

Call center operations can be conducted anywhere in the world without U.S. regulation, unless the activities involve regulated business services such as mortgage banking, consumer credit and lending, broker-dealer securities brokerage, life insurance sales and the regulated professions such as public accounting, the practice of law, engineering and architecture. The Democrats and the Obama Administration appear to want to control call center operations more than the mere directive in the TARP program, which forbids the use of any federal funds by TARP stimulus recipients for foreign call centers. Now comes Sen. Charles Schumer (D., N.Y.) with a proposal to tax all foreign call center calls at $0.25 per call, but exempt all U.S. call center calls from this tax.

Schumer’s Discriminatory Foreign Call Center Bill. By Press Release dated June 2, 2010, Sen. Schumer unveiled a “bill to rein in outsourcing of call center jobs to foreign countries” and to “maintain thousands of jobs in New York and the U.S.” and “provide incentive for jobs to return” home. The bill would have two key features:

o Disclosure of Foreign Call Center Activity. Call center agents at the other end of the line would have to disclose to the caller what country they are from, as well as in which countries the confidential customer data of American customers is kept. The disclosure requirement also forces companies to annually certify to the Federal Trade Commission (FTC) that they are complying with this requirement. Companies that fail to certify they are fully disclosing call transfers would be subject to civil penalties that the Federal Trade Commission (FTC) would prescribe.

o Taxation of Foreign Call Centers. Companies that transfer domestic calls to foreign countries would have to pay a per-call excise tax. US companies would be required to disclose quarterly, and in their annual reports, how many customer service calls they received, and how many are sent overseas.

“If we want to put a stop to the outsourcing of American jobs, than we need to provide incentives for American companies to keep American jobs here,” said Schumer. “This bill will not only serve to maintain call center jobs currently in the United States, but also provide a reason for companies that have already outsourced jobs to bring them back.” He noted that exported call center activity is most prevalent in India, Indonesia, Ireland, Canada, the Philippines, and South Africa.

“This bill will go a long way toward keeping American jobs right here at home,” continued Schumer. “If we want to stop the exporting of American jobs than we need to make it less beneficial for companies to layoff American workers and send jobs overseas and we can do that by providing disclosure as to where calls are being routed and less financially more beneficial to send them abroad.”

Sen. Schumer’s press release omitted any statistics of the number of jobs affected, the proportion of call center agents that handle foreign local customers, the turnover (attrition) rates for domestic vs. foreign call centers, or the types of services rendered by domestic vs. foreign call centers. According to the Associated Press (May 30, 2010), a 2007 Cornell study found that most call centers servicing American customers were located in the United States. The omission of any statistical analysis underscores how emotional this issue has become.

Smoot-Hawley and WTO. Sen. Schumer has taken a position that clearly violates American trade obligations. Indeed, House Financial Services Committee Chairman Barney Frank (D., Mass.) said as much of this proposal to prohibit TARP recipients from increasing their use of foreign call centers. Rep. Frank’s comments underscore that Sen. Schumer’s policies are not universally accepted, and that Congress should think twice.

But I do want to point out a difficulty that Members of this House should contemplate. We run the risk here that this may violate our obligations under the World Trade Organization. As someone who voted against joining, and I say that without any embarrassment, I would say to Members who will be joining, I believe, virtually every Member of this House in supporting the gentlewoman’s amendment that perhaps it should lead them to rethink to having so enthusiastically subscribed to the WTO agreement without some changes. It certainly seems to us that while we do know the government is directly involved, spending its own money, you can have a requirement for domesticity. It is unclear what the interpretation will be here. The interpretation [might] be not be purely an American one. It will be in the dispute resolution procedures of the WTO.

So as we go forward in this Congress and we are told about the advantages of a multilateral approach to trade, and I agree that, properly done, that is very advantageous, I hope Members who more enthusiastically than I embraced this principle will stop to think about it.

Some of us who were worried about the job impact of international economic relations have been derided as the reincarnation of Smoot and Hawley. Well, I guess Smoot and Hawley would have been with us on this one because it says companies who do business in America cannot go overseas for hiring. That’s not trade in the old way because they didn’t have the option of doing this in the old way with technology. But it is a restraint on international economic activity. It is the government’s saying to the market you may not do this because it will have a negative impact on our employment.

Now, I think that’s legitimate, especially here, since it will only apply to companies that are receiving this assistance. But understand the principle. Those who say it’s always a good thing to allow the market to totally run because it will enhance capacity are agreeing that in this case, because we have the hook on which to hang it, we can undercut that.

But the fact that we have the hook in the TARP doesn’t change what the economics would be. So I welcome what I think is a renewed recognition for some and a belated recognition for others that a regime in which none of these considerations of local employment can be considered is not necessarily in our best interest. SOURCE: Cong. Rec. p. H 408 (Jan. 21, 2009), on debate on Tarp Reform and Accountability Act Of 2009.

GATS. Senator Schumer appears not to have reviewed the policy of “national treatment” under Article XVII of the General Agreement on Trade in Services (GATS), a WTO agreement that is legally binding on the U.S. by reason of American ratification under President Bill Clinton. That text states:

“In sectors described in its schedule [of adhesion to the agreement], and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favorable than it accords to its own like services and suppliers.”

Clawback. Protectionist laws lead to counter-protectionist laws by trading partners. History has many examples of trade retaliation where the producers of apples suffer new foreign retaliatory tariffs because producers of oranges got a protectionist deal by having a $0.25 per unit excise tax advantage. Those of us American who sell services — such as professional services, consulting services, business advisory services, customer service, IT service, etc – and those who export goods or licensed technologies — will be exposed to retaliation by foreign countries who believe such an excise tax violates the US obligations under GATS. In other scenarios, U.S. producers of unrelated services and goods could be the subject of retaliatory and discriminatory foreign tariffs and taxes. This is old news (click here to read more on this subject).

Rule of Law. Sen. Schumer’s approach to legislation is an abuse of international public law. If Sen. Schumer wants to abrogate U.S. treaty obligations, he should say so and simply seek to abrogate the WTO agreements that give U.S. exporters national treatment in foreign markets. Such an idea may be permitted under U.S. constitutional provisions that allow a later law to abrogate a prior treaty.

Fair Trade. Hillary Clinton, as a Presidential candidate in 2008, actually had a more novel approach that explains why she is Secretary of State. She proposed “Fair Trade,” not “Free Trade.” She promoted a bilateral review of trade benefits (contrary to the multilateral approach of the WTO) and a renegotiation of U.S. trade obligations and termination for those countries that breached their WTO obligations of openness, transparency and national treatment. Sen. Schumer’s protectionist approach would not bother with such formalities, without mentioning the probability of foreign disrespect for American trade rights. Hillary Clinton was smarter about “fair trade” in her campaign. She at least understood existing law. Read more

International Outsourcing: Legality of Xenophobia in Outsourcing

October 9, 2009 by Bierce & Kenerson, P.C.

Summary:

In the United States, layoffs during the downward economic cycle following the dot.com bubble and then the 9/11 attack have had a severe impact on the local economies.  In the resulting legislative debate over the impact of outsourcing, some state legislators have proposed a reversion to the “Buy American” principle that conflicts with international trade under the World Trade Organization.  This issue underlines an emerging internal public policy debate on the desirability of international outsourcing.

NOTE: Posted in 2003, this seminal article could be updated for more recent manifestations of xenophobia in outsourcing.

“Buy American” in State Government Contracting.

In March 2002, a New Jersey State Senator, Shirley Turner, introduced a bill that would impose a “Buy American” rule on all purchases in the state.

N.J. Sen. No. 1349, 210th Legislature, intro. Mar. 21, 2002, passed in the Senate (40-0), Dec. 16, 2002.

The bill was inspired by the fact that “Recent published reports have indicated that telephone inquiries by welfare and food stamp clients under New Jersey’s Families First Program were being handled by operators in Bombay, India after the contractor moved its operations outside of the United States as a cost-cutting measure.”  The bill was intended to ensure that State funds are used to employ people residing in the United States and to prevent the loss of jobs to foreign countries.

As a “mini-Buy-American” Act, this legislation does not provide any exception for:

• a determination that a domestic procurement is “not in the public interest,”
• a determination that the cost of a domestic procurement is “unreasonable,” or
• a determination that the particular goods or services being procured are not available in such commercially available quantities or quality as are available abroad.

All of these are exceptions under the federal “Buy American” act.

If enacted, such laws would apply only to government procurement.  But such legislation could have repercussions on the image of offshore outsourcing throughout the United States.

The bill does not address issues of cost, or availability of local American services in the particular procurement.

Legality for Governmental vs. Private Purchases of Foreign Services.

As a matter of law, “Buy American” (or “Buy Local”) laws are illegal under the World Trade Organization’s General Agreement on Trade in Services (“GATS”) when they relate to purchases by private buyers.  But for governmental buyers of services, the GATS allows such favoritism to local service providers.

Impact on International Outsourcing by Private Customers.

Legislation limiting government procurement to local service providers should not have any impact on the right of private companies, as customers, to hire any service provider worldwide to render any service.

• Freedom of Contract.
  In our view, nothing in the various laws of individual states in the United States that currently are in consideration could validly overcome such freedom of contract.
• War.
  In case of a war involving Iraq or other country, the United States federal government could validly adopt rules to safeguard its economy from foreign interests.   As discussed below, this raises risks for contracting parties, but such risks may be surmounted through customary technical means for security, business continuity planning, redundancy and disaster recovery.

Buy American – Revival of the Past.

The “Buy American” legislation was originally adopted by the Federal government as a means of promoting local business.  This legislation, at 41 U.S.C. 10a, is limited to the purchase of goods:

This law has been rendered largely moot by the Government Procurement Agreement adopted at the Uruguay Round of the General Agreement on Tariffs & Trade.  See Agreement Establishing World Trade Organization, Annex 4, Plurilateral Agreements, Government Procurement Agreement.

More recently, state legislatures in the United States have considered imposing some restrictions or prohibitions on the use of foreign service providers for contracts involving payment of  state or local funds.  In New Jersey, State Senator Shirley K. Turner introduced a bill that would prohibit any contracting or subcontracting to foreign service providers where the work could be done by American citizens or lawful permanent resident aliens.  Similar legislation is reportedly under consideration (as of February 2003) in Connecticut, Maryland, Missouri and Wisconsin.

Policy Debate: Validity vs. Wisdom of Xenophobia.

As a matter of public policy, we must distinguish between law and policy.  Would such legislation be lawful?  Under the World Trade Organization (WTO) General Agreement on Trade in Services (“GATS”), it would appear valid for government procurement of services.  As a “beggar-thy-neighbor” policy of keeping jobs at home, such legislation would help generate employment at a time of economic decline, reducing the costs of public welfare and other social costs.

Would such legislation be good public policy?  Such legislation would deprive local governments of purchasing services at the cheapest price.  It would hurt local taxpayers as consumers of government services.

World Trade Organization: No “Non-Tariff Barriers” for Private Trade.

Free trade under the World Trade Organization (formerly known as the General Agreement on Tariffs and Trade, or GATT) is based on certain fundamental principles:

• national treatment of foreign suppliers of goods and services, where each member state must “accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favorable than that it accords to its own like services and service suppliers.”   General Agreement on Trade in Services, Art. XVII(1), MTN/FA II-A1B, p.19).
• transparency of the laws and regulations governing international trade (subject to the supervening principle that disclosure is not required where it “would impede law enforcement or otherwise be contrary to the local public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.”   See, e.g., Agreement on Trade-Related Investment Measures, Art. 6, MTN/FA II-A1A-7, p. 3.)
• non-discrimination.

Market Access to Foreign Services Providers under GATS.

The WTO’s General Agreement on Trade in Services embodies the principle that, in sectors where a member state undertakes to grant market access to service providers from another member state, that market access cannot be restricted either nationally or regionally.    Specifically, it is a violation of GATS for a member state to impose any restriction on market access in any of the following forms:

• Number of Service Providers: limitations on the number of service providers (such as in the form of numerical quotas, monopolies, exclusive services providers or the requirement of a “economic needs” test as a condition of market access).
• Value of Service Transactions: limitations on the total value of service transactions or assets (in the form of numerical quotas or the requirement of an “economic needs” test).
• Quantity of Services Provided or Service Operations: limitations on the total number of service operations or on the total number quantity of service output expressed in terms of designated numerical units, in the form of quotas or the requirement of an “economic needs” test.
• Number of Employees: limitations on the total number of natural persons who may be employed in a particular service sector or that a service provider may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test.
• Type of Legal Entity or Joint Venture: measures that restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.
• limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholdings or the total value of individual or aggregate foreign investment.

General Agreement on Trade in Services, Art. XVI(2), MTN/FA II-A1B, p.18.

Exceptions to GATS Protections.

Several exceptions expressly permit a member state to disregard its obligations on trade in services.
Services Supplied in the Exercise of Governmental Authority.

By definition, the GATS does not apply to “services supplied in the exercise of governmental authority.”  General Agreement on Trade in Services, Art. I(3)(c), MTN/FA II-A1B, p.14). In some countries, “governmental authority” involves the performance of functions that are considered commercial or otherwise not “in the exercise of governmental authority.”

In the United States, for example, in November 2000, President George W. Bush’s administration adopted regulations requiring that all governmental functions be evaluated and classified as governmental or non-governmental, and non-governmental functions are to be contracted out to outsourcers (or possibly even privatized).

National Security.
National and international security considerations take precedence over trade in services under GATS. In particular, member states may take actions that they may deem necessary to protect “essential security interests” relating to services for provisioning military establishments, nuclear fuels or their materials, or any other action “taken in time of war or other emergency in international relation.”   As a procedural matter, the member state must notify the WTO’s Council for Trade in Services when such “security exceptions” have been adopted and when they have been terminated.  General Agreement on Trade in Services, Art. XIV bis, MTN/FA II-A1B, pp.16-17.

War.
As a “national security” measure, a member state might impose an embargo on trade in services with one or more other WTO member states during a time of war.  The exception applies “in time of war.”

This “war” exception leaves open a number of vital questions about the legality and viability of discrimination, trade embargos and other acts normally prohibited by GATS.  The “war” exception does not specify that the embargo must only apply to another member state that is at war with the buying member state.  But it is not clear whether the right to impose an embargo applies to a country that is perennially in a “state of emergency” or has never entered into a formal cessation of armed hostilities with a particular other member.

In a sense, this exception could arguably serve as the basis for a member state’s attempt to circumvent the WTO principles of free trade in services.  In our view, such an attempt could invite trade reprisals and dispute resolution before a WTO dispute tribunal.

Deceptive and Fraudulent Practices; Contract Default and Enforcement of Rights.
Under GATS, member states may adopt and enforce measures of a general, non-discriminatory nature relating to “the prevention of deceptive or fraudulent practices or to deal with the effects of a default on service contracts.   Accordingly, laws governing enforcement of rights and remedies under contract breach are not subject to GATS rules, so long as the laws are “not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services.”   General Agreement on Trade in Services, Art. XIV(c)(i), MTN/FA II-A1B, p.15.

Data Protection.
Similarly, under GATS, member states may adopt and enforce non-discriminatory laws for “the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of the confidentiality of records and accounts.”  General Agreement on Trade in Services, Art. XIV(c)(ii), MTN/FA II-A1B, p.15).

Safety.
Laws governing safety are also generally exempt from the rules of GATS, except if they are discriminatory or disguised trade restrictions.  General Agreement on Trade in Services, Art. XIV(c)(iii), MTN/FA II-A1B, p.15.

Collection of Taxes.
Laws for the “equitable or effective imposition or collection of direct taxes,” or for the avoidance of double taxation under a tax treaty, may be somewhat discriminatory against foreign service providers.  General Agreement on Trade in Services, Art. XIV(d) and (e), MTN/FA II-A1B, p.15).

Government Procurement.
Exceptionally, under GATS, the WTO principles of most-favored-nation treatment, market access and national treatment do not apply for governmental procurement of services. General Agreement on Trade in Services, Art. XIII(1), MTN/FA II-A1B, p.14). (The other principles, such as the “transparency” duty to publish applicable laws and regulations, remain unaffected.)   The Government Procurement Code, adopted prior to the GATS, relates to trade in goods and does not require any treatment different from GATS.

Safeguard the Balance of Payments.
This exception allows a government to escape from GATS requirements to open its economy to free trade in services in order to safeguard the country’s balance of payments “in the event of serious balance-of-payments and external financial difficulties or threat thereof.”  General Agreement on Trade in Services, Art. XII(1), MTN/FA II-A1B, p.12). This exception is not directed at measuring bilateral trade imbalance between two countries that are trading partners.  Rather it focuses on multilateral trade and generalized imbalances in the balance of payments.

Conclusions for Outsourcing Services Providers.

If you are promoting the sale of your services from a foreign country, you should focus on the practical economic benefits of your service.  This may include:

• abundant labor supply.
• rapid deployment of a large pool of skilled workers for early completion of a complex project.
• high quality standards, such as the Software Engineering Institute Capability Maturity Models for both software and services.
• low cost to the taxpayers whose governments are acting as purchasing agents.
• local presence in the host country, and the role of the host country employee pool for the service provider.

Conclusions for Purchasers of Transborder Services.

There are undoubtedly substantial risks of force majeure in outsourcing.  But the WTO principles of national treatment for private-sector transactions and other fundamental protections of international trade in services are well established.  Legislation by state legislators is not likely to have any impact on your ability to procure services at low cost under a clear outsourcing contract. Despite the risks and problems, using technological methods as well as legal contracts, you can protect your investment in foreign services.

Conclusions for National Governments.

The opening of borders to “free trade” under WTO principles leaves everyone exposed to the risk of loss of value of their knowledge in a rapidly changing information economy.  Governments should focus on building a workforce that is skilled in knowledge tools.

Outsourcing Law & Business Journal™: April 2009

April 27, 2009 by Bierce & Kenerson, P.C.

OUTSOURCING LAW & BUSINESS JOURNAL (™) : Strategies and rules for adding value and improving legal and regulation compliance through business process management techniques in strategic alliances, joint ventures, shared services and cost-effective, durable and flexible sourcing of services. www.outsourcing-law.com. Visit our blog at http://blog.outsourcing-law.com for commentary on current events.

Insights by Bierce & Kenerson, P.C., Editors.  www.biercekenerson.com

Vol. 9, No. 4 (April, 2009)

Special Notice

WEBINAR ON LAW AND POLICY IN GLOBAL SERVICES: Pending U.S. Legislative Challenges to Global Services and Captives.

A Webinar, New Date, Thursday, May 14, 2009, 11:00 – 11:45 A.M. Eastern Daylight Time U.S.

Speakers:

• William B. Bierce, Esq., Bierce & Kenerson, P.C. – outsourcing lawyer
• Caren Z. Turner, Esq., Turner Govt. and Public Affairs – registered lobbyist and political analyst
• Congressional staff, invited.

This webinar will identify and analyze a number of early indicators of the Obama Administration’s and the Democratic-controlled Congress’s policies that will have a major impact on buyers and sellers of outsourced and captive services, both domestically and offshore. In this seminar, you will hear about:

• Pending legislation that could facilitate unionization and reduce outsourcing opportunities.
• Executive Orders and Proclamations that may violate NAFTA and WTO obligations, and the potential impact on “free trade” and “protectionism” abroad.
• Environmental legislation that could impair local manufacturing in the U.S.
• Trends in Presidential and congressional policies affecting sourcing practices and costs.
• Prognostications on passage of legislation and adoption of Presidential actions.
• Strategies for risk management and development of new opportunities.

This webinar is by invitation only. To register, please click here.

___________________________

1. Social Networking and Cybersquatting in Outsourcing: Legal Conflicts where BPO Meets SaaS.

2.  Humor.

3.  Conferences.
___________________________

1. Social Networking and Cybersquatting in Outsourcing: Legal Conflicts where BPO Meets SaaS. Social networking on the Internet depends on that part of information technology that is called “software as a service” (“SaaS”). SasS offers a form of outsourced infrastructure for relationship management. SaaS works for virtually any business processes delivered as a service.Social media offer efficient marketing tools for new ventures and transforming long-existing businesses. Social networking media enable professionals to identify, target and interact directly with qualified business prospects, using tags such as geography, interest category, company or any other affinity class. Social networking allows online interactions between individuals and sharing of ideas, photos, audio, video and aspirations. Marketers love social media as a vehicle for (i) efficiently opening new conversations, (ii) inviting engagement by asking for “status updates,” (iii) developing brand goodwill, (iv) creating personal trademarks for self-appointed gurus leading new discussion groups and (v) serving highly targeted and affordable advertising. Social networking marketing can even be outsourced. For the full article, click here.

2. Humor

Social networking, (n). (1) electronic platform for displays of appropriate body language, virtual smiles, rubbing shoulders and interactive listening; (2) asocial interaction; (3) bi-directional spam engine.

3. Conferences

April 27-29, 2009, IQPC’s 7^th Annual e-Discovery Conference, San Francisco, California. Join this year’s conference to learn more about managing the process of electronic discovery files and to explore options that are available for this task. Proactive e-discovery solutions are more critical to legal departments yet the solutions for costs, implementation, and management are still widely unknown. This conference will provide strategies for e-discovery success including proactive strategies for record management; global privacy issues, data security laws, regulations; specific cost control options; judicial perspective; and cutting edge software solutions. For more info, click here.

April 29-30, 2009, WRG’s Corporate IP Counsel Summit:  Crafting an IP Strategy to Match Corporate Goals, New York, New York. This inaugural event comes at a pivotal time for Corporate IP Counsel across industries. Not only will the new administration be in office but also we will begin to see the repercussions from the upswing in Supreme Court and Federal Circuit cases in 2008 that will affect IP in 2009 and on. Difficult economic times call for thinking outside the box and sharing of best practices. This event is the premier forum to hear about solutions that your IP peers have implemented to maximize their existing IP assets, avoid costly litigation, create and maintain efficient infrastructure, fully integrate IP strategy into business plans, prepare for anticipated patent law changes, and more.  Save $500 off the current registration rate!   Mention promo code BDQ764 when registering.  To register, call World Research Group at 800-647-7600 or visit our website.

May 5-6, 2009, 7th Annual HRO World^™ Conference & Expo at NY HR Week^™ , New York, New York. Offering timely solutions for organizations that are considering outsourcing, or that are already engaged in the process, to ensure successful change management and positive business outcomes. Hear from the HR outsourcing industry’s most respected practitioners, analysts and vendors. You’ll take away solutions for the strategic and operational challenges associated with HR outsourcing and retained functions. With a dozen breakout sessions, presentations from leading organizations including US Postal Service, Textron, Qualcomm and Hertz Europe, as well as an Industry Leaders’ Panel, you’ll find solutions to your most pressing outsourcing challenges. Register online or call 1-800-727-1227.

May 11-14, 2009, 9th Annual European Shared Services and Outsourcing Week, Budapest, Hungary. Featuring the annual global Shared Services Excellence Awards, where the shared services and sourcing world shapes its future. Novotel Budapest Congress, Hungary. This event iis the European arm of a global series of regional flagship events designed to bring together everybody who’s anybody in the combined worlds of captive shared services and outsourcing. SSOW is the largest gathering of Shared Services professionals in Europe and home to the annual Shared Services Excellence Awards. This multifunctional programme covers transformation strategies for all back office functions from Finance, HR, IT, procurement – through to multifunctional hubs. Whatever scale and whatever size of the organisation, if you’re pushing back office efficiency through a captive, outsourced, or mixed model route, this is the must attend event for your continent. Join over 60 contributors. To register for a limited 2-for-1 offer (for practitioners only, terms and conditions apply), quote code MP16. For more information: Email: enquire@SSOWeek.com, Tel: +44 (0) 207 368 9300 or visit our website.

May 18-20, 2009, 6th Annual HR Shared Services & Outsourcing Summit, Chicago, Illinois. SSON’s HR Shared Services Summit is the most important event of the year for HR leaders seeking to re-align their services with the strategic requirements of the business. New highlights for 2009 include 25+ HR thought leaders, brand new, truly strategic content on HR Outsourcing & HR Transformation, Interactive roundtable
discussions and the introduction of the VP Think Tank, which enables exclusive networking with senior HR leaders.  From “101” style topic introductions for those new to shared service structures, to detailed case studies on truly transformational programs, it’s the only event that guarantees a return on your time out of the office: whatever the maturity level of your HR service offerings. Contact Kim Vigilia at kim.vigilia@iqpc.com for any questions. Click here for more info.

June 7-9, 2009, The 3^rd Annual Shared Services Exchange, Miami, Florida. This is an invitation-only gathering for VP and C-Level senior executives made up of highly crafted, executive level conference sessions, interactive “Brain Weave” discussions, engaging networking opportunities and strategic one-on-one advisory meetings between solution providers and delegates.  With a distinguished speaking faculty from Coca-Cola, CIGNA, American Electric Power, AOL and Safeway, amongst others, the seats at the 2009 Exchange are limited and filling up quickly.  We have limited complimentary invitations available for qualified delegates for a limited time. Please give us your reference ‘Outsourcing-Law’ when inquiring. There are solution provider opportunities also available for companies who want to be represented. You can request your invitation at exchange@iqpc.com or call us at 1866-296-4580. Visit our website.

June 23-25, 2009, SSON’s Launching and Managing Shared Services, Houston, Texas. This is the only conference in the US specifically focused on management and technology tools needed for a successful SS center. Developed in conjunction with an expert advisory board, the conference features extended interactive sessions on key activities needed to optimize a shared services strategy. Whether you’re building the business case, designing a governance model, implementing an ERP system, or agreeing on a series of performance standards with the business, Launching and Managing Shared Services delivers the exact information you need to proceed with confidence. Join other senior business leaders on giving your shared services center the best possible chance of success in a challenging economic environment. We’re proud to highlight this event’s outstanding speaker faculty of Shared Services experts from companies including MICROSOFT, COORS BREWING, CARGILL, APPLIED MATERIALS, and ASTRAZENECA. Contact Kim Vigilia at kim.vigilia@iqpc.com for any questions. For more info, click here.

July 27-29, 2009, IQPC’s 7 th Annual Procure-to-Pay Summit, Boston, Massachussetts. Leveraging current opportunities around corporate spend management whilst minimizing the impact on A/P, the 7th Procure-to-Pay Summit is expanding on its previous success and featuring new additions to the program, including: in-depth coverage of various AP optimization approaches: centralization, outsourcing and automation; new emphasis on strategic sourcing and global procurement; new techniques and tools for maximizing supplier relationships in procurement and efficiently expediting supplier payments in AP. For more information, please click here.

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FEEDBACK: This newsletter addresses legal issues in sourcing of IT, HR, finance and accounting, procurement, logistics, manufacturing, customer relationship management including outsourcing, shared services, BOT and strategic acquisitions for sourcing. Send us your suggestions for article topics, or report a broken link at: webmaster@outsourcing-law.com The information provided herein does not necessarily constitute the opinion of Bierce & Kenerson, P.C. or any author or its clients. This newsletter is not legal advice and does not create an attorney-client relationship. Reproductions must include our copyright notice. For reprint permission, please contact: publisher@outsourcing-law.com . Edited by Bierce & Kenerson, P.C. Copyright (c) 2009, Outsourcing Law Global LLC. All rights reserved.  Editor in Chief: William Bierce of Bierce & Kenerson, P.C. located at 420 Lexington Avenue, Suite 2920, New York, NY 10170, 212-840-0080.

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