or even pollution," she points out. "It's the company's reputation that's at stake." She agrees outsourcing is by no means a surefire means to
reduce expenses. "If you're looking at outsourcing to save costs, there are all
kinds of hidden costs that pop up," Abe says. She says one of her clients is trying to wind down its deal with an outsourcer in China after a major breach in privacy that resulted in lost trade secrets and the theft of intellectual property. "So it's not just the cost of getting the service cheap. What's
the cost of losing trade secrets or the intellectual property, and what's the cost of bringing the operation back?" For her corporate clients, Abe provides a detailed inventory
of issues and challenges that a company needs to know well in advance of drafting a contract. They range from the preparation
of economic forecasts in developing countries and knowing the application of local laws to understanding differences in culture, business, political, and legal climates that can have implications on how contracts and covenants are negotiated. In a paper entitled "International outsourcings give rise to
unique legal and business challenges," she notes that a typical international outsource often has affiliates and subcontractors in multiple jurisdictions that also must be subjected to the cli- ent's contractual requirements. "To address this, the parties have to create a deal structure
that ensures the rights and obligations of all parties involved in the outsourcing are adequately protected and liability risks are appropriately limited," she writes. "Privity of contract and enforceability become a key issue." In deals that involve the movement of resources, data, and
C ANADIAN Lawyer INHOUSE A UGUST 2008 19
