Corporate Governance & Business Ethics Case Study

Legal Process Outsourcing - Privacy Outsourced?

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Abstract:
In May 2008, the US firm Newman, McIntosh & Hennessey filed a lawsuit, against its outsourcing partner in India and the President of the US, in which it argued that the US constitutional guarantees that protect confidential communications between lawyers and clients, may not apply when legal work is transmitted abroad. While there was a tremendous growth in the legal process outsourcing (LPO) industry in India, over the period 2005 to 2008, there is also a growing concern about the protection of personal privacy by these firms, amongst US clients. Constitutional guarantees and professional ethics rules are similar in India and the US, but the implementation and administrative aspects of privacy protection in India has many loopholes. Indian LPOs tried to reassure their US clients by providing stringent physical security measures, as they faced stiff competition from countries like China and the Philippines. But a convincing answer to this important concern from the industry, as well as from the Indian government, is the need of the hour. If not, there is every chance that this would result in slowing down the pace of growth of the Indian LPO industry.

Pedagogical Objectives:

The case attempts to achieve the following pedagogical objectives:

• To understanding the LPO industry and its key concerns.
• To analysing the challenge to the industry raised by privacy concerns.
• To comparison of privacy laws in the US and India.
• To explaining the industry and legislative measures required to solve the security issues to data privacy.
• To analysing whether there can be a solution to this problem through a better legislative framework.

Keywords : Outsourcing, Legal process outsourcing, Right to privacy, Legal ethics, American Bar Association, Bar Council of India, Constitution, Article 21, Fourth Amendment, Physical security, Data Protection, Legislation, India, United States