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Does Possible Recession Favor Outsourcing?

Published by on February 25, 2008

As business publications mull over whether we face an imminent recession here in the United States, the question comes up as to whether a recession would increase or decrease outsourcing activity.  Opinions are mixed. Some think a recession would benefit Indian outsourcing companies or HR outsourcing companies.  A Business Week article reports that Indian IT […]

As business publications mull over whether we face an imminent recession here in the United States, the question comes up as to whether a recession would increase or decrease outsourcing activity.  Opinions are mixed.

Some think a recession would benefit Indian outsourcing companies or HR outsourcing companies.  A Business Week article reports that Indian IT companies are preparing for the effects of a U.S. recession.

Of course, outsourcing carries its own host of legal issues:  labor and employment law issues in both countries; intellectual property protection; protection of trade secrets; document management issues; taxation; jurisdictional issues in the event of a dispute.  There are also a host of practical issues to deal with, including finding the outsourcing vendor, disaster recovery plans and the actual contractual terms between the parties.  Given the complexities of outsourcing, it will not be the solution for all U.S. firms challenged by an economic downturn.

P.S.  Lawyers are not immune from outsourcing either.  For several years now, law firms have been outsourcing legal work to India (and according to this post, to the Midwest!).

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