Legal Structures Of Outsourcing

Various US business communities have realized and accepted the great opportunity of being able to slash down their operation costs by outsourcing part of their works and processes to cheaper but good quality labor countries. If you are a company in the US and want to outsource to India, China, the Philippines or any other Asian locations, what are the different options that are available? What are the different legal structures that make offshore outsourcing possible? To get into outsourcing, there are three possible legal structures that the outsourcing company can choose from;

• Sign a contract with a third party for getting the services
  
• Start your own subsidiary in that country and contract for services with it
  
• Third party contracting with the intention of acquiring it in the future

If one is just starting out on BPO (business process outsourcing) for the first time, it is better to choose out the independent third party contractor which usually will have its own infrastructure and manpower in the offshore country from where the service is executed. Starting a subsidiary and acquisition etc must be done later. The initial advantages of letting a third party do all the work will mean lower risk and freedom from all the hassles of startup costs and infrastructure development.

However some US based corporate do choose to open their own offshore subsidiary straight away so that they can enjoy the advantage of better control and get a better level of security for all sensitive data and intellectual property. However today most of the outsourcing service providers located in the US has realized that the need of the day is to give clients the assurance of a high level of security. It is equally important to consistently maintain a good level of interaction and communication with the clients irrespective of their global locations.

The author of this article is John Kessel of Managed Outsource Solutions, a US based company that offers legal outsourcing services in Legal Outsourcing, Legal Transcription for clients across the US.