karnika seth, managing partner seth associates advocates and legal consultants © seth associates,...
TRANSCRIPT
Karnika Seth Managing Partner
SETH ASSOCIATES ADVOCATES AND LEGAL
CONSULTANTS
copy Seth Associates 2007 All Rights Reserved
LEGAL PROCESS OUTSOURCING IN INDIA-AN INSIGHT INTO THE GROWING INDUSTRY
ICFAI National Seminar on lsquoProspects and opportunities in
Knowledge Servicesrsquo 9th July2007Sirifort Auditorium
New Delhi
Presentation Plan Introduction to the LPO business Scope of ldquoServicesrdquo rendered Preference for destination-India Different Models of Outsourcing Potential of growth in the LPO Industry Important Indian Government Initiatives Identifying major Issues in dealing with foreign clients in
an LPO business Ensuring data protection-Case study-Mphasis BPO
Fraud Practical experience amp suggestions
Outsourcing is the contracting out of a companys non-core non-revenue producing activities to specialists
It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best ndash its core competencies
Three common types of outsourcing are Information Technology (IT) outsourcing legal process outsourcing (LPO) and Business Process Outsourcing (BPO) BPO includes outsourcing related to accounting human resources benefits payroll and finance functions and activities All these activities fall under broad category of Knowledge process outsourcing (KPO)
What is OutsourcingWhat is Outsourcing
What lsquoLPOrsquo meansWhat lsquoLPOrsquo means
LPO or Legal Process Outsourcing is is a a kind of high value added BPO service kind of high value added BPO service involving legal work that industry vendors involving legal work that industry vendors or in-house departments of organizations or in-house departments of organizations outsource from off-shore areas where it is outsource from off-shore areas where it is costly to perform costly to perform
Services rendered may involve Services rendered may involve low skilled quantitative tasks or or high end qualitative tasks
Nature of ServicesNature of Services High end High end The Qualitative tasks includeThe Qualitative tasks include Intellectual Property Rights Intellectual Property Rights
Patent Search Patent Search Patent Application Drafting Patent Application Drafting IPR Portfolio ManagementIPR Portfolio Management
TM and Copyright Registration TM and Copyright Registration Legal ResearchOpinion workLegal ResearchOpinion work
Document Review and AnalysisDocument Review and Analysis
Intelligence ServicesIntelligence Services
Contracting and AdministrationContracting and Administration
Low endLow endThe Quantitative tasks includeThe Quantitative tasks include
Paralegal Services Paralegal Services
Legal Transcription Legal Transcription Legal Memo Development Legal Memo Development Medical Transcription Medical Transcription
Document Management Document Management Corporate Secretarial Services Corporate Secretarial Services
Litigation SupportLitigation Support Legal CodingLegal Coding Data entryData entry
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Presentation Plan Introduction to the LPO business Scope of ldquoServicesrdquo rendered Preference for destination-India Different Models of Outsourcing Potential of growth in the LPO Industry Important Indian Government Initiatives Identifying major Issues in dealing with foreign clients in
an LPO business Ensuring data protection-Case study-Mphasis BPO
Fraud Practical experience amp suggestions
Outsourcing is the contracting out of a companys non-core non-revenue producing activities to specialists
It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best ndash its core competencies
Three common types of outsourcing are Information Technology (IT) outsourcing legal process outsourcing (LPO) and Business Process Outsourcing (BPO) BPO includes outsourcing related to accounting human resources benefits payroll and finance functions and activities All these activities fall under broad category of Knowledge process outsourcing (KPO)
What is OutsourcingWhat is Outsourcing
What lsquoLPOrsquo meansWhat lsquoLPOrsquo means
LPO or Legal Process Outsourcing is is a a kind of high value added BPO service kind of high value added BPO service involving legal work that industry vendors involving legal work that industry vendors or in-house departments of organizations or in-house departments of organizations outsource from off-shore areas where it is outsource from off-shore areas where it is costly to perform costly to perform
Services rendered may involve Services rendered may involve low skilled quantitative tasks or or high end qualitative tasks
Nature of ServicesNature of Services High end High end The Qualitative tasks includeThe Qualitative tasks include Intellectual Property Rights Intellectual Property Rights
Patent Search Patent Search Patent Application Drafting Patent Application Drafting IPR Portfolio ManagementIPR Portfolio Management
TM and Copyright Registration TM and Copyright Registration Legal ResearchOpinion workLegal ResearchOpinion work
Document Review and AnalysisDocument Review and Analysis
Intelligence ServicesIntelligence Services
Contracting and AdministrationContracting and Administration
Low endLow endThe Quantitative tasks includeThe Quantitative tasks include
Paralegal Services Paralegal Services
Legal Transcription Legal Transcription Legal Memo Development Legal Memo Development Medical Transcription Medical Transcription
Document Management Document Management Corporate Secretarial Services Corporate Secretarial Services
Litigation SupportLitigation Support Legal CodingLegal Coding Data entryData entry
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Outsourcing is the contracting out of a companys non-core non-revenue producing activities to specialists
It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best ndash its core competencies
Three common types of outsourcing are Information Technology (IT) outsourcing legal process outsourcing (LPO) and Business Process Outsourcing (BPO) BPO includes outsourcing related to accounting human resources benefits payroll and finance functions and activities All these activities fall under broad category of Knowledge process outsourcing (KPO)
What is OutsourcingWhat is Outsourcing
What lsquoLPOrsquo meansWhat lsquoLPOrsquo means
LPO or Legal Process Outsourcing is is a a kind of high value added BPO service kind of high value added BPO service involving legal work that industry vendors involving legal work that industry vendors or in-house departments of organizations or in-house departments of organizations outsource from off-shore areas where it is outsource from off-shore areas where it is costly to perform costly to perform
Services rendered may involve Services rendered may involve low skilled quantitative tasks or or high end qualitative tasks
Nature of ServicesNature of Services High end High end The Qualitative tasks includeThe Qualitative tasks include Intellectual Property Rights Intellectual Property Rights
Patent Search Patent Search Patent Application Drafting Patent Application Drafting IPR Portfolio ManagementIPR Portfolio Management
TM and Copyright Registration TM and Copyright Registration Legal ResearchOpinion workLegal ResearchOpinion work
Document Review and AnalysisDocument Review and Analysis
Intelligence ServicesIntelligence Services
Contracting and AdministrationContracting and Administration
Low endLow endThe Quantitative tasks includeThe Quantitative tasks include
Paralegal Services Paralegal Services
Legal Transcription Legal Transcription Legal Memo Development Legal Memo Development Medical Transcription Medical Transcription
Document Management Document Management Corporate Secretarial Services Corporate Secretarial Services
Litigation SupportLitigation Support Legal CodingLegal Coding Data entryData entry
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
What lsquoLPOrsquo meansWhat lsquoLPOrsquo means
LPO or Legal Process Outsourcing is is a a kind of high value added BPO service kind of high value added BPO service involving legal work that industry vendors involving legal work that industry vendors or in-house departments of organizations or in-house departments of organizations outsource from off-shore areas where it is outsource from off-shore areas where it is costly to perform costly to perform
Services rendered may involve Services rendered may involve low skilled quantitative tasks or or high end qualitative tasks
Nature of ServicesNature of Services High end High end The Qualitative tasks includeThe Qualitative tasks include Intellectual Property Rights Intellectual Property Rights
Patent Search Patent Search Patent Application Drafting Patent Application Drafting IPR Portfolio ManagementIPR Portfolio Management
TM and Copyright Registration TM and Copyright Registration Legal ResearchOpinion workLegal ResearchOpinion work
Document Review and AnalysisDocument Review and Analysis
Intelligence ServicesIntelligence Services
Contracting and AdministrationContracting and Administration
Low endLow endThe Quantitative tasks includeThe Quantitative tasks include
Paralegal Services Paralegal Services
Legal Transcription Legal Transcription Legal Memo Development Legal Memo Development Medical Transcription Medical Transcription
Document Management Document Management Corporate Secretarial Services Corporate Secretarial Services
Litigation SupportLitigation Support Legal CodingLegal Coding Data entryData entry
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Nature of ServicesNature of Services High end High end The Qualitative tasks includeThe Qualitative tasks include Intellectual Property Rights Intellectual Property Rights
Patent Search Patent Search Patent Application Drafting Patent Application Drafting IPR Portfolio ManagementIPR Portfolio Management
TM and Copyright Registration TM and Copyright Registration Legal ResearchOpinion workLegal ResearchOpinion work
Document Review and AnalysisDocument Review and Analysis
Intelligence ServicesIntelligence Services
Contracting and AdministrationContracting and Administration
Low endLow endThe Quantitative tasks includeThe Quantitative tasks include
Paralegal Services Paralegal Services
Legal Transcription Legal Transcription Legal Memo Development Legal Memo Development Medical Transcription Medical Transcription
Document Management Document Management Corporate Secretarial Services Corporate Secretarial Services
Litigation SupportLitigation Support Legal CodingLegal Coding Data entryData entry
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Paralegal servicesParalegal services
Image and Document coding Indexing and Tagging Legal transcription Archiving Deposition and Testimony summarization DocumentEvidence Review
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Spheres of lawSpheres of law
LitigationLitigation ArbitrationArbitration ADRADR Banking Banking SecuritiesSecurities IPRIPR Mergers and acqMergers and acq
Real estate Real estate TaxationTaxation General business General business
lawslaws InsuranceInsurance Corporate Corporate
consultancyconsultancy
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Major International clients ndashsource Major International clients ndashsource of workof work
The in-house legal departments of MNCs The in-house legal departments of MNCs Legal research firms Legal research firms International law firms International law firms Legal publishing companies Legal publishing companies Independent attorneys Independent attorneys
Work inflow is observed to be more from USA Work inflow is observed to be more from USA Australia UK France Japan ChinaAustralia UK France Japan China
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Preference for destination -IndiaPreference for destination -India
Experienced Legal professionals Experienced Legal professionals Communication and education advantage-English languageCommunication and education advantage-English language professionals skilled in use of ITprofessionals skilled in use of IT Presence of IT Infrastructure and Government facilitated schemes Presence of IT Infrastructure and Government facilitated schemes
for ITES sector better telecommunication initiatives power and for ITES sector better telecommunication initiatives power and transport facilitiestransport facilities
Exposure to foreign lawsExposure to foreign laws Foreign qualifications in legal streamForeign qualifications in legal stream Cost reductionCost reduction Advantage of time zoneAdvantage of time zone Efficacy at workEfficacy at work Staffing 24x7Staffing 24x7 Supports regional assignmentsSupports regional assignments
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Preference for destination-IndiaPreference for destination-India Laws Governing International Contracts Proper Law of the Contract When the parties in the Contract make an express choice of
law Indian Courts have always recognized such choice of proper law Under Indian Law parties are free to stipulate their terms of contract
and lay down the law by which the Contract is to be governed Courts in India have held that the intention of parties would decide the law of which country would govern the Contract and which Court would have jurisdiction Sections 13 15 and 44A of the Indian Civil Procedure Code and Section 41 of the Indian Evidence Act govern the conclusiveness and enforcement of foreign judgments in India
The parties may also choose a foreign venue for arbitration A Foreign arbitral award would be recognized in India if the country of venue has signed either the New York or Geneva conventions and has been notified as having reciprocal relations with India in the matter of enforcement of foreign awards A foreign arbitral award would generally be more easily enforced in India than a foreign court judgment
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Preference for destination-IndiaPreference for destination-India
India has ratified the World Trade India has ratified the World Trade Organization (WTO) Agreement which Organization (WTO) Agreement which came into force on January 1st 1995 and came into force on January 1st 1995 and has also become a party to the Agreement has also become a party to the Agreement on Trade Related Intellectual Property on Trade Related Intellectual Property Rights It has made several amendments Rights It has made several amendments to its laws concerning Intellectual Property to its laws concerning Intellectual Property to suit the international standards to suit the international standards
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Models of International IT-Enabled Models of International IT-Enabled OutsourcingOutsourcing
Out-tasking model export a task and upon completion import it for use in home country
724 model maintain a continuous work schedule by having teams in various time zones
Foreign local subsidiary model outsource tasks in support of operations in that country
Global model establish data and service center overseas to support global operations
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Different Categories of LPO Different Categories of LPO PlayersPlayers
BPOITES Players Providing LPO Services eg Office eg Office tigerPangea3tigerPangea3
Law Firms Providing LPO Services eg Seth Associates eg Seth Associates J sagar Associates Kocchar amp CoJ sagar Associates Kocchar amp Co
Third Party Units (Single-Focus LPO Excluding Patents (Single-Focus LPO Excluding Patents Services) eg Lexadigm MindcrestServices) eg Lexadigm Mindcrest
Third Party Units (Single-Focus Patents Services)- eg (Single-Focus Patents Services)- eg EvalueserveEvalueserve
KPO Players Providing LPO Services eg Evalueserve eg Evalueserve IntegreonIntegreon
Captives of Law Firms lex sphere Atlas legal research lex sphere Atlas legal research Captives of Corporate Legal Departments eg GE eg GE
DupontDupont
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Survey Reports predicting future of Survey Reports predicting future of LPO business in IndiaLPO business in India
According to a study by the United States-based Forester Research the current annual value (2004-05) of legal outsourcing which is worth $80 million can rise up to $4 billion and can fetch 79000 jobs in India by 2015
The National Association of Software and Service Companies -- Nasscom -- also projected that legal processing outsourcing (LPO) providers in India will soon rise to $3-4 billion industry
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Potential of growthPotential of growth ValueNotes a Pune based research firm released a
survey report ldquoOffshoring Legal Services to Indiardquo claiming Legal Process Outsourcing is expected to be a $640 million by end of 2010 as against $146 now
Number of people employed in this sector will go up to 32 000 from 7 500 now in next three years
The frontrunners are leading due to their strong capabilities onshore offshore presence growth strategies and the strength of their brand in the global LPO market
Rising demand vendor maturity and capability to offer higher value services has led to the 50 growth in this sector in 2005-06
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Important Indian Government Important Indian Government InitiativesInitiatives
Foreign Direct InvestmentForeign Direct Investment (FDI) for 100 percent of the equity in BPO (FDI) for 100 percent of the equity in BPO companies companies -options to foreign companies to engage independent service -options to foreign companies to engage independent service provider branch office set up JV or wholly owned subsidiary provider branch office set up JV or wholly owned subsidiary acquire exiting companyacquire exiting company
Foreign Investment Regulations Foreign Investment Regulations Software development and BPO services is now under the Software development and BPO services is now under the automatic route and no foreign investment approvals are required to automatic route and no foreign investment approvals are required to set up a wholly owned subsidiary only certain filings need to be set up a wholly owned subsidiary only certain filings need to be made after receipt and issue of share capital However acquisition made after receipt and issue of share capital However acquisition of shares in an existing Indian company may still require a prior of shares in an existing Indian company may still require a prior foreign investment approval foreign investment approval
Most foreign corporations set up their subsidiaries as private limited Most foreign corporations set up their subsidiaries as private limited companies with liability limited by share capital companies with liability limited by share capital
Duty-free imports of capital goods (under the Export Promotion of Duty-free imports of capital goods (under the Export Promotion of Capital Goods scheme)Capital Goods scheme)
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Important Indian Government Important Indian Government InitiativesInitiatives
100 Income tax exemption for export of services 100 Income tax exemption for export of services
according to CBDT the exemption would embrace the according to CBDT the exemption would embrace the following (few) services following (few) services
bull Back-office Operations bull Back-office Operations bull Content Development or Animation bull Content Development or Animation bull Engineering amp Design services bull Engineering amp Design services bull Human Resource Services bull Human Resource Services bull Insurance Claim Processing bull Insurance Claim Processing bull Legal Databases bull Legal Databases
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Important Indian Government Important Indian Government InitiativesInitiatives
Promotions of STPs which provide ready-to-plug IT and telecom Promotions of STPs which provide ready-to-plug IT and telecom
infrastructure infrastructure
Indian tax laws have recently included provisions relating to transfer pricing Indian tax laws have recently included provisions relating to transfer pricing requiring pricing of transactions between associated enterprises to be at requiring pricing of transactions between associated enterprises to be at arms length arms length
allows repatriation of profits calculated in accordance with approved accounting rules
National Venture Fund for the Software and IT Industry with a corpus of Rs National Venture Fund for the Software and IT Industry with a corpus of Rs 100 crore100 crore
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Government Incentives in Government Incentives in infrastructure segmentinfrastructure segment
The government has been continuously The government has been continuously
improving infrastructure with better roads improving infrastructure with better roads setting up technology parks opening up setting up technology parks opening up telecom for enhanced connectivity telecom for enhanced connectivity providing uninterrupted power to augment providing uninterrupted power to augment growthgrowth
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Tax Incentives-Infrastructure sectorTax Incentives-Infrastructure sector The tax incentives offered to the investors by the Government of India The tax incentives offered to the investors by the Government of India
are a boon for firms involved in IT outsourcing to India The incentives are a boon for firms involved in IT outsourcing to India The incentives that facilitate economic growth and development are that facilitate economic growth and development are
1 Infrastructure 1 Infrastructure A 10 years tax holiday to ventures engaged in developing and or A 10 years tax holiday to ventures engaged in developing and or
maintaining and operating an infrastructure facilitymaintaining and operating an infrastructure facility 2 Power 2 Power 10 years tax holiday to undertakings which generate and or 10 years tax holiday to undertakings which generate and or
distribute powerdistribute power 3 Telecom 3 Telecom 5 years tax holiday for companies providing telecom services 5 years tax holiday for companies providing telecom services
including Internet services and broadband services Also 30 including Internet services and broadband services Also 30 deduction from profits for the next 5 years in any 10 continuous years deduction from profits for the next 5 years in any 10 continuous years out of first 10 years is also offered out of first 10 years is also offered
4 Industrial Parks and Special Economic Zones4 Industrial Parks and Special Economic Zones 10 years tax holiday is applicable to ventures that develop and or 10 years tax holiday is applicable to ventures that develop and or
operate or maintain in notified IT parks and special economic zones operate or maintain in notified IT parks and special economic zones
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Tax IncentivesTax Incentives 5 Other Industries5 Other Industries 5-year tax holiday is available for new industrial units to 5-year tax holiday is available for new industrial units to
be set up in backward states and districts be set up in backward states and districts 6 Incentives for Exports6 Incentives for Exports No Tax is deducted on exporters profits for unit set up on No Tax is deducted on exporters profits for unit set up on
EPZs STPs EHTPs FTZ and SEZs EPZs STPs EHTPs FTZ and SEZs 7 Other Incentives7 Other Incentives Tax concessions are allowed for FTI and a weighted Tax concessions are allowed for FTI and a weighted
deduction of 150 for scientific research and deduction of 150 for scientific research and development expenditure have been offered 10 years development expenditure have been offered 10 years tax holiday is available for RampD companies engaged in tax holiday is available for RampD companies engaged in scientific and industrial researchscientific and industrial research
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Government Incentives in Government Incentives in SEZSEZ
In India units are allowed to be set up in SEZ for rendering of services as well The units in the zone are required to be a net foreign exchange earner
The units in SEZ set up during the financial year 2005 will get the following exemptions 100 exemption of profits and gains from business for the first 5 years 50 exemption of profits and gains from business for the next first 5 years 50 exemption to the extent that such amount is reinvested in the SEZ Special Reserve
Account Losses falling under the heads ldquoProfits and gains from Business or professionrdquo and ldquo Income
from Capital Gainsrdquo can be carried forward set off as long as such loss is related to the business of the SEZ unit
Exemption from Central sales tax on inter-state sale or purchase of goods
Facility to retain 100 exchange earnings in EEFC account ( exchange earners foreign currency account)
Exemption from Service tax Export proceeds to be realized within 12 months
SEZ units may import or procure from the domestic sources duty free all their requirements of capital goods raw materials consumables spares packing materials office equipment DG sets etc for implementation of their project in the Zone without any licence or specific approval
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
The Key issues-dealing with International The Key issues-dealing with International
clients in LPO businessclients in LPO business
Your Market presence
How you introduce your organization
IT amp systems in place
Understanding cultural differences
Due diligence
Establishing credibility
endorsement of values
Exhibit experience
Addressing IPR amp data protection issues
Clear terms of engagement
Competence amp Manpower
Promptness amp Quality Control
Payment arrangements
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Approaching
Introduce LPO Discussing work
possibilities
Understanding Differences in
culture
Scrutiny Background Check
EstablishingCredibility
IPR amp Data protection issues
Steps in Dealing with an International Client
Agreement CompetencePayment Services amp Quality
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
The Six Fundamental lsquoValue lsquo The Six Fundamental lsquoValue lsquo ParametersParameters
Parentage
Presence
People
Product
Professional
Promise
Global leader more than 5 decades of Global leader more than 5 decades of customer loyalty amp servicecustomer loyalty amp service
Continuous onsite and global support to Continuous onsite and global support to handhold and troubleshoot immediatelyhandhold and troubleshoot immediately
Professionally qualified hands-on industry Professionally qualified hands-on industry experience specific domain expertise amp experience specific domain expertise amp proven delivery capabilities proven delivery capabilities
Most user friendly futuristic design easy Most user friendly futuristic design easy scalability zero vendor dependence scalability zero vendor dependence technology backingtechnology backing
Continuous commitment on-time delivery Continuous commitment on-time delivery reliability amp flexibilityreliability amp flexibility
Guaranteed successGuaranteed success
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
LPO Industry lsquos prime LPO Industry lsquos prime challengeschallenges
High attrition rates High attrition rates Unpredictability in regular flow of workUnpredictability in regular flow of work High cost of training and infrastructure High cost of training and infrastructure
investment investment Ensuring information security and confidentiality Ensuring information security and confidentiality
especially under varying privacy laws especially under varying privacy laws Abdication of responsibility Abdication of responsibility Risk managementRisk management Quality assurancesQuality assurances
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Quality related accreditationsQuality related accreditations
International Standards Organization (ISO) 9000 International Standards Organization (ISO) 9000 series series bullSix Sigma bullSix Sigma bullCMMi Model (Capability Maturity Model) bullCMMi Model (Capability Maturity Model) bullSEI-CMM Model bullSEI-CMM Model bullPeople Capability Maturity Model (People-bullPeople Capability Maturity Model (People-CMM) CMM) bulle Services Capability Model (eSCM) bulle Services Capability Model (eSCM)
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
LPO Literature
PrintedOnline directory
Past Experience of
The firm
Experience of key personnel
Advertisement Website
Mediapress conferences
Publications
References
Givinghosting Seminars
Approaching a clientApproaching a client
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Agenda for discussion Agenda for discussion with a foreign clientwith a foreign client
Exchange of Goals CommitmentUnderstanding Relationship Agreement
Earliest contacts Earliest contacts should include a should include a detailed exchange detailed exchange aimed at aimed at achieving long achieving long term goalsterm goals
A thorough A thorough understanding understanding of the clientrsquos of the clientrsquos business business objectives in objectives in the context of the context of political political economic and economic and social systems social systems in the local in the local jurisdictionjurisdiction
An An understanding understanding of how of how different different business business practices practices customs and customs and etiquette can etiquette can affect the affect the relationship relationship between the between the firm and its firm and its foreign clientforeign client
An An agreement agreement recording recording terms of terms of engagement engagement issues-IPR issues-IPR Data Data protection protection tax issuestax issues
To avoid To avoid unverified unverified assumptions assumptions and to and to address address issues when issues when they arisethey arise
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Working out detailed strategies amp plansWorking out detailed strategies amp plans
Appreciate Clientrsquos goalsAppreciate Clientrsquos goals Tune your Business objectives and strategyTune your Business objectives and strategy Risk Implications of the clientrsquos position in the Risk Implications of the clientrsquos position in the
home markethome market Domestic Market place ndashSafeguarding LPO Domestic Market place ndashSafeguarding LPO
Reputation in the local jurisdictionReputation in the local jurisdiction ndash ndashconfidentiality security concernsconfidentiality security concerns
Agree on policies and standards for Agree on policies and standards for assignment management and client serviceassignment management and client service
Collect feedback on client satisfactionCollect feedback on client satisfaction
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Understanding common Understanding common cross border differencescross border differences
Professional precedence and deferenceProfessional precedence and deference
CommunicationsCommunications
HolidaysHolidays
Adjusting to inevitable time gapsAdjusting to inevitable time gaps
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Ready for Scrutiny Ready for Scrutiny
TEAMTEAM
INFRASTRUCTUREINFRASTRUCTURE
CAPABILITYCAPABILITY
RELIABILITYRELIABILITY
SKILLSSKILLS
RELEVANT APPLICABLE RELEVANT APPLICABLE LAWLAW
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
What is indispensable to a What is indispensable to a Foreign ClientForeign Client
A trustworthy amp value adding partnerA trustworthy amp value adding partner - that ensures Quality amp service- that ensures Quality amp service Reliability Reliability -that ensures success-that ensures success Values Values - that goes beyond words- that goes beyond words Experience Experience - that holds Client in good stead to make right - that holds Client in good stead to make right
decisionsdecisions
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
What Clients look forWhat Clients look for
ExpertiseExpertise
- that provide accuracy- that provide accuracy
InfrastructureInfrastructure
- that can ably support amp value add to Customer- that can ably support amp value add to Customer
QualityQuality
- that assures you error-free and timely project - that assures you error-free and timely project deliverydelivery
SupportSupport
- that ensures success- that ensures success
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Establishing Establishing credibilitycredibility
Fully skilled Team
Strong infrastructure
Previous tasks
Completed Task
Appreciation from the client
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Background Check on Background Check on a New Clienta New Client
Conduct due diligence incase of new client Conduct due diligence incase of new client Website checkWebsite check Personality analysis over phone discussions Personality analysis over phone discussions Verify the identity of the company with the corresponding Verify the identity of the company with the corresponding
Countryrsquos embassygovernmentcountry records Countryrsquos embassygovernmentcountry records Confirm that the signatory is authorized to sign on behalf Confirm that the signatory is authorized to sign on behalf
of the company of the company Verify that the company is legal and doing real business Verify that the company is legal and doing real business
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Collate detailed Collate detailed InformationInformation
Firms must maintain procedures and obtain satisfactory evidence of identity for all new clients
Confirm the Clientrsquos Identity
If the official name of the company
exists in the corporate records of the state or region
in which the contract needs to be enforceable
If the signatory signing on behalf of a legitimate company
is listed as an authorized signatory of that company
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Due diligence techniquesDue diligence techniques
Check The Clients BackgroundCheck The Clients Background find some history about the company in the public find some history about the company in the public
corporate records corporate records consultants who specialize in checking out consultants who specialize in checking out
company backgrounds company backgrounds credit reporting companies (like Equifax) credit reporting companies (like Equifax) corporate credit and information bureaus (like corporate credit and information bureaus (like
Dunn amp Bradstreet) Dunn amp Bradstreet) consolidated information sources (like consolidated information sources (like knowxcomknowxcom))
Identity procedures should not be an end in themselves
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
IdentityIdentity AddressAddress
IndividualIndividual Birth Certificate Birth Certificate Record of home visitRecord of home visit
Photo driving license Photo driving license Council tax rent demandCouncil tax rent demand
Passport Passport Utility billUtility bill Photo card (Corgi Photo card (Corgi CIS) CIS)
Inland revenue document Inland revenue document
Government identity Government identity card card
Entry on electoral role Entry on electoral role
Residence permit Residence permit State benefit entitlement State benefit entitlement
Firearms certificate Firearms certificate Paper driving license Paper driving license
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
CLIENT IDENTITY CLIENT IDENTITY VERIFICATIONVERIFICATION
Persons Persons Identity evidenceIdentity evidence
Business or entityBusiness or entity ProprietorProprietor Utility bill Utility bill
Bank Bank signatories signatories
registration certificate registration certificate
Inland revenue document Inland revenue document
Bank details Bank details
Tax returns Tax returns
Business records Business records
Professional registrations Professional registrations
Personal visit Personal visit
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Legal IssuesLegal Issues
Issues relating to the ownership of intellectual property
Liability for failures and limitation of liability
The right of termination-exit route
Prohibition on hiring the otherrsquos employees
Data Protection confidentiality-contractually enforceable Art 21 of constitution common lawfiduciary duty breach of trust-criminal offence ndashboth IPC and IT Act
1
5
4
3
2
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Types of security related risksTypes of security related risks Three types of security related risksThree types of security related risks 1048576 1048576 Theft of Data and InformationTheft of Data and Information 1048576 1048576 Natural DisastersNatural Disasters 1048576 1048576 External Acts like virusesExternal Acts like viruses The National Association of Software Services The National Association of Software Services
Companies or Nasscom is working with the government Companies or Nasscom is working with the government to ensure that Indias data privacy legislation is more in to ensure that Indias data privacy legislation is more in line with the US It also intends to have the security line with the US It also intends to have the security practices of all its 860 members audited by international practices of all its 860 members audited by international accounting firms A cyber crime unit which NASSCOM accounting firms A cyber crime unit which NASSCOM initiated in Bombays police department where officers initiated in Bombays police department where officers were trained to investigate data theft is planned in nine were trained to investigate data theft is planned in nine other cities other cities
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Create strong confidentiality Create strong confidentiality protection regimesprotection regimes
Dedicated teams to maintain strict security info -Dedicated teams to maintain strict security info -access and staffing rulesaccess and staffing rules
Secure transmission and storage of informationSecure transmission and storage of information Processes to be streamlined ndashrsquoonly if need to Processes to be streamlined ndashrsquoonly if need to
knowrsquo principle be adoptedknowrsquo principle be adopted NDA adopt foreign data protection principlesNDA adopt foreign data protection principles IP of projects belongs to clientIP of projects belongs to client Client ndashattorney priviledgeClient ndashattorney priviledge Quality assurance accrediation Quality assurance accrediation
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Data Protection-UKData Protection-UK
The Data Protection Act 1998 came into force on 1 The Data Protection Act 1998 came into force on 1 March 2000 March 2000
Under the Data Protection Act anyone processing Under the Data Protection Act anyone processing personal information must comply with eight personal information must comply with eight principles of good information handling principles of good information handling fairly and lawfully processed fairly and lawfully processed processed for limited purposes processed for limited purposes adequate relevant and not excessive adequate relevant and not excessive accurate and up to date accurate and up to date not kept longer than necessary not kept longer than necessary processed in accordance with the individuals rights processed in accordance with the individuals rights secure secure not transferred to countries outside the European not transferred to countries outside the European
Economic area unless there is adequate protectionEconomic area unless there is adequate protection
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
IT Act 2000 delineates both civil and IT Act 2000 delineates both civil and criminal liabilities for -criminal liabilities for - ldquoldquocyber contraventionsrdquo[S43(a) to (h)] and cyber contraventionsrdquo[S43(a) to (h)] and ldquoldquocyber offencesrdquo[Ss65-74]cyber offencesrdquo[Ss65-74]
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Legal Provisions dealing with data Legal Provisions dealing with data protection under the IT Act2000protection under the IT Act2000
Sec 2(1)(o) of IT Act 2000 defines Sec 2(1)(o) of IT Act 2000 defines ldquoDatardquo-ldquoDatardquo- A representation of information knowledge A representation of information knowledge
facts concepts or instructions which are facts concepts or instructions which are being prepared or have been prepared in a being prepared or have been prepared in a formalized manner and is intended to be formalized manner and is intended to be processed is being processed or has been processed is being processed or has been processed in a computer system or processed in a computer system or computer network and may be in any form computer network and may be in any form or stored internally in the memory of the or stored internally in the memory of the computercomputer
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Legal Provisions dealing with Legal Provisions dealing with data protection under the IT data protection under the IT
Act2000Act2000Computer database[ S43 Exp (ii)-Computer database[ S43 Exp (ii)-
A representation of information A representation of information knowledge facts concepts or knowledge facts concepts or instructions in text image audio instructions in text image audio video that are being prepared or have video that are being prepared or have been prepared in a formalized manner been prepared in a formalized manner or have been produced by a or have been produced by a computer computer system or computer computer system or computer network and are intended computer network and are intended for use in a computer computer for use in a computer computer system or computer networksystem or computer network
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Cyber ContraventionsCyber Contraventions
Deals primarily in with unauthorized Deals primarily in with unauthorized access to computer computer system or access to computer computer system or computer networkcomputer network
May result in civil prosecutionMay result in civil prosecutionLiable to pay for damages by way of Liable to pay for damages by way of
compensation not exceeding one crore compensation not exceeding one crore rupees to the person so affectedrupees to the person so affected
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Cyber OffencesCyber Offences
Deals with computer computer system or Deals with computer computer system or computer network related ldquoseriousrdquo computer network related ldquoseriousrdquo offences such as hacking (Section 66)offences such as hacking (Section 66)
May result in criminal prosecutionMay result in criminal prosecution IT Act 2000 has identified ldquooffencesrdquo IT Act 2000 has identified ldquooffencesrdquo
which are punishable with imprisonment or which are punishable with imprisonment or with fine or bothwith fine or both
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Arms ActOnline sale of Arms
Sec 383 IPCWeb-Jacking
NDPS ActOnline sale of Drugs
Sec 416 417 463 IPCEmail spoofing
Sec 420 IPCBogus websites cyber frauds
Sec 463 470 471 IPCForgery of electronic records
Sec 499 500 IPCSending defamatory messages by email
Sec 503 IPC Sending threatening messages by email
Computer Related Crimes under IPC and Special Laws
50
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Case Study- BPO Data TheftCase Study- BPO Data Theft
The recently reported case of a Bank The recently reported case of a Bank Fraud in Pune in which some ex Fraud in Pune in which some ex employees of BPO arm of MPhasis Ltd employees of BPO arm of MPhasis Ltd MsourcE defrauded US Customers of Citi MsourcE defrauded US Customers of Citi Bank to the tune of RS 15 crores has Bank to the tune of RS 15 crores has raised concerns of many kinds including raised concerns of many kinds including the role of Data Protection the role of Data Protection
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Case Study (contd)Case Study (contd) The crime was obviously committed using Unauthorized Access to
the Electronic Account Space of the customers It is therefore firmly within the domain of Cyber Crimes
ITA-2000 is versatile enough to accommodate the aspects of crime not covered by ITA-2000 but covered by other statutes since any IPC offence committed with the use of Electronic Documents can be considered as a crime with the use of a Written Documents Cheating Conspiracy Breach of Trust etc are therefore applicable in the above case in addition to section in ITA-2000
Under ITA-2000 the offence is recognized both under Section 66 and Section 43 Accordingly the persons involved are liable for imprisonment and fine as well as a liability to pay damage to the victims to the maximum extent of Rs 1 crore per victim for which the Adjudication Process can be invoked
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Case Study (contd)Case Study (contd) The BPO is liable for lack of security that enabled the commission of The BPO is liable for lack of security that enabled the commission of
the fraud as well as because of the vicarious responsibility for the the fraud as well as because of the vicarious responsibility for the ex-employees involvement The process of getting the PIN number ex-employees involvement The process of getting the PIN number was during the tenure of the persons as Employees and hence the was during the tenure of the persons as Employees and hence the organization is responsible for the crime organization is responsible for the crime
Some of the persons who have assisted others in the commission of Some of the persons who have assisted others in the commission of the crime even though they may not be directly involved as the crime even though they may not be directly involved as beneficiaries will also be liable under Section 43 of ITA-2000 beneficiaries will also be liable under Section 43 of ITA-2000
Under Section 79 and Section 85 of ITA-2000 vicarious Under Section 79 and Section 85 of ITA-2000 vicarious responsibilities are indicated both for the BPO and the Bank on the responsibilities are indicated both for the BPO and the Bank on the grounds of Lack of Due Diligence grounds of Lack of Due Diligence
At the same time if the crime is investigated in India under ITA-At the same time if the crime is investigated in India under ITA-2000 then the fact that the Bank was not using digital signatures for 2000 then the fact that the Bank was not using digital signatures for authenticating the customer instructions is a matter which would authenticating the customer instructions is a matter which would amount to gross negligence on the part of the Bank (However in amount to gross negligence on the part of the Bank (However in this particular case since the victims appear to be US Citizens and this particular case since the victims appear to be US Citizens and the Bank itself is US based the crime may come under the the Bank itself is US based the crime may come under the jurisdiction of the US courts and not Indian Courts) jurisdiction of the US courts and not Indian Courts)
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
The Outsourcing cycleThe Outsourcing cycle
Memorandum of Understanding (MOU) Agreement Negotiations
Outsourcing Agreement amp engagement letter Service Commencement
Service Improvement
Renewal or termination
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Points to be addressed in the Points to be addressed in the engagement letterengagement letter
Availability and accessAvailability and access ResponsivenessResponsiveness Working language(s)Working language(s) Status reportsStatus reports Delegation of legal workDelegation of legal work Communications with the foreign clientrsquos home office and Communications with the foreign clientrsquos home office and
local subsidiarieslocal subsidiaries Communications with third partiesCommunications with third parties Conflict and unfair competition issuesConflict and unfair competition issues Staff sustitutionStaff sustitution Billing Billing Expenses and disbursementsExpenses and disbursements PaymentPayment Applicable law amp settlement of disputes Applicable law amp settlement of disputes
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
IMPORTANT CONSIDERATIONS-Service IMPORTANT CONSIDERATIONS-Service Level AgreementLevel Agreement
QualityQuality - The client should be able to get out of the contract if he finds the quality - The client should be able to get out of the contract if he finds the quality
below par below par QuantityQuantity
- volume of work to be done in an hourdayweekmonth as per agreed- volume of work to be done in an hourdayweekmonth as per agreed ConfidentialityConfidentiality
- assurance that all the information and data would be not be disclosed - assurance that all the information and data would be not be disclosed to any third partyto any third party
Pay CyclePay Cycle- how to remit professional fees- how to remit professional fees
Price IncreasesPrice Increases- dependence of the client-ensure that for large long-term projects - dependence of the client-ensure that for large long-term projects once the vendorrsquos personnel have acquired experience on the client once the vendorrsquos personnel have acquired experience on the client projects the vendor does not result in unreasonable price increases or projects the vendor does not result in unreasonable price increases or replacement of key employees replacement of key employees
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
BillingBilling
How often will fees be billed How often will fees be billed
How much detail does the client require on How much detail does the client require on the invoice the invoice
Billing practices vary considerably A foreign Billing practices vary considerably A foreign client who is used to itemized detailed hourly client who is used to itemized detailed hourly billing might take exception to the summary billing might take exception to the summary form of invoice that is customary for the firmrsquos form of invoice that is customary for the firmrsquos local clients local clients
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Billing ratesBilling rates Depending upon the type of services being delivered the Depending upon the type of services being delivered the
billing charges range from US$ 10 to 150 Mainly in the billing charges range from US$ 10 to 150 Mainly in the industry three kinds of standards are prevalent in terms industry three kinds of standards are prevalent in terms of charging the clientsof charging the clients
One the flat rate fee ndash the clients have to pay the fixed One the flat rate fee ndash the clients have to pay the fixed amount of charges for the entire monthrsquos working amount of charges for the entire monthrsquos working Second the packaged fee ndash wherein the clients pay for Second the packaged fee ndash wherein the clients pay for buying the entire package of services like patents prior buying the entire package of services like patents prior art search would cost them around US$ 900 for 12 art search would cost them around US$ 900 for 12 hours Third on hourly basis High-end jobs would cost hours Third on hourly basis High-end jobs would cost more than even US$ 100 The value for money has to be more than even US$ 100 The value for money has to be given by keeping prices relatively reasonablegiven by keeping prices relatively reasonable
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Billing ratesBilling rates The billing charges are as follows The billing charges are as follows
Area Amount (USD per hour) Area Amount (USD per hour) Telemarketing 5-12 Telemarketing 5-12 Transaction Processing 10-14 Transaction Processing 10-14 Tech Support (inbound) 11-12 Tech Support (inbound) 11-12 Printing Support Services 15-25 Printing Support Services 15-25 Basic Back Office 15-25 Basic Back Office 15-25 FampA 15-35 FampA 15-35 Document Management Document Management Services 30-50 Services 30-50 Research amp Analysis 40-90 Research amp Analysis 40-90 Patent Drafting amp Patent Drafting amp Legal Research 150 Legal Research 150
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Per-transaction pricePer-transaction price
A norm in the US and the concept is fast gaining popularity among top Indian firms
PTP for the uninitiated is a form of pricing where a firm company is paid only on the basis of completed transactions
The client pays a portion of the value that he gains from outsourcing rather than a fixed cost based on the number of seats or hours of effort that a service provider uses to deliver the solution This ensures that the client pays only for the benefits that he derives and not for inefficiencies of the service provider
Transaction-based pricing requires high degree of domain specialization especially for high end work ndash a firms credibility and proven track record that today is not widespread
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Expenses and Expenses and disbursementsdisbursements
The range of expenses and disbursements that are accepted as reimbursable can vary considerably from country to country
What is customary in one jurisdiction might be viewed as bordering on dishonesty in another
Unless reimbursement of expenses and disbursements is discussed and agreed at the start the firm should expect the foreign client to challenge some of these charges
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Payments provisionsPayments provisions Amounts to be paid-(i) Lump sum contractAmounts to be paid-(i) Lump sum contract
(ii) Time based contracts(ii) Time based contracts (iii) Success fee based contract(iii) Success fee based contract (iv) Percentage contract(iv) Percentage contract (v) Indefinite delivery contract(v) Indefinite delivery contract
Schedule of payments- Schedule of payments-
Payment procedures shall be indicated in the draft contract and agreed upon during Payment procedures shall be indicated in the draft contract and agreed upon during negotiationsnegotiations
Payments may be made at regular intervals (as under time-based contracts) or for Payments may be made at regular intervals (as under time-based contracts) or for agreed outputs (as under lump sum contracts)agreed outputs (as under lump sum contracts)
Payments for advances if any should normally be backed by Bank Guarantee The Payments for advances if any should normally be backed by Bank Guarantee The limit for advance payment will be as prescribed by GFR Normally it should not limit for advance payment will be as prescribed by GFR Normally it should not exceed 10 of the cost of the contract exceed 10 of the cost of the contract
Payments shall be made promptly in accordance with the contract provisionsPayments shall be made promptly in accordance with the contract provisions
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Three words of Three words of Caution-Payment Caution-Payment
It may be the custom in the foreign clientrsquos country to age professional services invoices for up to 90 to 120 days A demand for payment within 30 days might be viewed as distrusting and insulting to the clientrsquos integrity
Law firms must also be very careful about attempting to charge interest on accounts that are more than 30 days old In some countries interest payments especially to providers of trusted professional services are considered highly improper or even immoral
Litigation to collect a fee is considered to be a breach of professional ethics in some countries Even though these professional rules might not apply to a law firm outside the clientrsquos home jurisdiction even the suggestion of possible legal action to collect a fee could be viewed as highly offensive by the client especially if the client feels that there are unresolved service issues
Cus
tom
sLi
tigat
ion
Inte
rest
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Key Performance Key Performance Indicators (KPIs)Indicators (KPIs)
Average Data Value (Sales and Reservations Only) Average Data Value (Sales and Reservations Only) Customer Satisfaction Customer Satisfaction Service Level Service Level Abandoned Percent of DataAbandoned Percent of Data Cost Per DataCost Per Data Errors and Rework Errors and Rework Forecast Work-load to Actual Forecast Work-load to Actual Scheduled Staff to Actual Scheduled Staff to Actual Adherence to Schedule Adherence to Schedule Average Handling Time Average Handling Time Reviewing strategies for increasing performance levelsReviewing strategies for increasing performance levels
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Dealing with a complaintDealing with a complaint
If the complaint is in writing acknowledge it immediately If the complaint is in writing acknowledge it immediately Tell your client who will be dealing with the complaint and what Tell your client who will be dealing with the complaint and what
the likely timescale is for dealing with it the likely timescale is for dealing with it Keep your client informed of the complaintrsquos progress if it is Keep your client informed of the complaintrsquos progress if it is
unlikely to be resolved quickly unlikely to be resolved quickly Note what the client expects from the complaints process and Note what the client expects from the complaints process and
whether those expectations are reasonable whether those expectations are reasonable If your client asks for a meeting try to arrange one as soon as If your client asks for a meeting try to arrange one as soon as
possible possible Open a complaint file and keep a record of what steps you take Open a complaint file and keep a record of what steps you take
towards resolving the complaint towards resolving the complaint Finally remember that speedy resolution of complaints helps to Finally remember that speedy resolution of complaints helps to
maintain client goodwill and is frequently the most cost-effective maintain client goodwill and is frequently the most cost-effective solution for you solution for you
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
ADVOCATES AND LEGAL CONSULTANTSNew Delhi Law Office C-116 Daryaganj New Delhi-110002 IndiaTel+91 (11) 55352272 +91 9868119137Corporate Law Office B-10 Sector 40 NOIDA-201301 NCR IndiaTel +91 (120) 4352846 +91 9810155766Fax +91 (120) 4331304E-mail mailsethassociatescom
Thank YouThank You
copy Seth Associates 2007 All Rights Reserved
SETH ASSOCIATES
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