Editor's Box - Inside outsourcing

The decision to outsource is a major strategic one for most companies, as it involves weighing the potential cost-savings against the consequences of a loss in control over the product or service.

Sure, the decision to outsource isn’t a hot topic, but the growing complexity of outsourcing is.
International outsourcing can cause headaches from a social-responsibility perspective — child labour, terrorism, animal rights, breaches of privacy, etc. — and can put a company’s reputation at stake.

In this month’s feature “Outsourcing grows in complexity” (see page 18) InHouse explores the multitude of outsourcing deals gone sour to uncover best practices for renegotiation of contracts or switching providers altogether.

Theo Ling, a partner at Baker & McKenzie LLP in Toronto, states that: “Most people in the outsourcing world would say the nature of outsourcing is it’s an organic beast. It’s not static; it’s a relationship.”

Also on the topic of outsourcing and organic relationships is this month’s cover story, “A collaborative, cost-effective connection” (see page 12).

In an effort to maintain high-level legal services for the lowest cost, Fred Crooks, CLO of Bell Aliant, devised a model where Bay Street’s Blake, Cassels & Graydon LLP and Halifax’s Cox & Palmer act as one firm on Bell Aliant’s files — deciding amongst themselves who will do what in an move to provide seamless services.

When interviewing Crooks for the article, he mentioned that he sees a trend towards obtaining legal services outside of Toronto as a way of controlling costs.

“I think people are looking at — even within the national firms — maybe the Ottawa office or the Montreal office or other offices that perhaps don’t have the overhead and can bill out in accordance with the local market at lower rates and still provide high-quality service and degree of specialization,” Crooks tells InHouse.

One way to keep costs down is to consider, and take advantage of, the lower rates of Atlantic Canada, say lawyers in the region. In a recent conversation I had with Peter Forestell, managing partner of Cox & Palmer’s New Brunswick offices, he mentioned the increased volume of legal work coming to the East Coast.

He mentioned a recent client, based in Ontario, who was doing a deal in Atlantic Canada where “it was the type of deal they didn’t necessarily have to use us, but they did,” he says. “When all was said and done, the client said, ‘You know, I was concerned at the beginning about the geographical distance, but when I think about it, I

don’t go to my lawyer’s office down on Bay Street any more than I go to your office.’”

In other news, I will be leaving the editorship of InHouse to pursue other interests. I’ve greatly enjoyed the last eight years in the world of legal journalism, especially from the corporate-counsel perspective.

Interestingly enough, my decision to move on was highly influenced by many of the in-house counsel I have interviewed. Oftentimes, conversations about personal success or leaving private practice or the genesis of huge deals centred on the topic of taking risks and reaping the rewards.

One quote in particular that springs to mind is when I was talking to David L. McAusland, formerly of Alcan, for the February 2008 cover story. “You can’t make money without taking risk, right? If you could then, well, we’d all be rich,” he laughed. While my decision isn’t about becoming rich, I realize that what I want out of life won’t come to me without taking some risks.  

Here’s hoping you’re right, David.

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