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CCCA_V2No2_Outsourcing-FIN.qxd:CCCA_V1No1_DriversSeat-FIN.qxd 5/1/08 2:59 PM Page 21 Cover ssuming a key role in an intricate business process outsourcing (BPO) transaction was a chal- lenge John Cairns had never previously tackled during his eight years as Chubb Insurance ACompany of Canada’s general counsel. Yet even though Cairns, who’s also the firm’s vice-president and secretary, says the company’s recent BPO deal was “fairly small-scale from a Canadian perspective,” he has no lack of appreciation for the work involved in completing such a transaction.“Even though it wasn’t a major part of the business that was outsourced, it was still quite complex and very involved.” Chubb Canada — along with a much bigger sister firm based in the United Kingdom — outsourced vari- ous back-office functions to a major, well-known, reputable operation in India.Although the British firm took the lead in the transaction, it was still a “strenuous due diligence project,” Cairns says, because his role was “to ensure that the legal protections were in place [and that] any legal issues were adequately addressed.” For many corporate counsel, this role is one they’re getting, or had better get, used to as offshore BPO — the contracting of a specific business task to a third-party service provider in a foreign jurisdiction — becomes com- monplace in Canada’s business landscape. BPO Bonanza By Pablo Fuchs How it all began companies the ability to send data anywhere in the world instan- BPO began to infiltrate the business community in the 1960s in taneously, took off. the information technology (IT) context. This happened for a Already used to outsourcing their IT functions, companies variety of reasons, says Richard Austin, chief legal advisor for IT began to realize that it’s a short step to outsource an entire busi- firm EDS Canada Inc. inToronto.“Business mainframes were dif- ness process, because “any corporate function must have an IT ficult to use, operate and manage, so companies were more than component,” says Daniel Paul, a partner with Davis LLP’s happy to rely on a provider with a special expertise,” he says. Montreal office who focuses on major outsourcing transactions. Once companies started depending on outsourcers, it was In addition, big companies began to consolidate at a much almost like a light went on in people’s heads, Austin adds: greater pace during this period.The resultant super-entities then “Companies that used IT outsourcers started to see opportunities started to “look at things holistically, and began to splice process- for efficiencies and service improvements by focusing on their es that could be commoditized,” says Joel Ramsey, a senior asso- core business activity and outsourcing [other functions] to a serv- ciate in the technology group at McCarthy Tétrault LLP’s ice provider.” Toronto office who also focuses on major outsourcing transac- However, the practice of outsourcing key business processes tions. “There are lots [of business processes] that could be done PAUL EEKHOFF didn’t take off until the 1990s, when a combination of fortuitous anywhere, by anyone at any time.”This was further strengthened by the shift in companies’ primary focus to customer service and circumstances spurred its growth. First, the use of technology their core competencies, adds Austin. became widespread, and the Internet, which gave people and ÉtÉ 2008 CCCA Canadian Corporate Counsel Association 21