MUMBAI: A rise in the number of deals in software and business process outsourcing (BPO) services has led to Indian companies seeking specialised legal help from a new breed of experts –– lawyers specialising in outsourcing.

These ‘outsourcing’ lawyers help companies build business deals, both mid-sized (between $10m to $20m) and large ($50m and above). Apart from advising on risk mitigation factors and highlighting tax implications, these legal experts ensure that companies adhere to labour laws in the US and UK if there is a possibility of moving jobs to India.

Most outsourcing lawyers are hired on a retainer basis and provide their expertise despite the presence of a legal department in most companies. Some Indian law firms, not wanting to miss out on the opportunity, have set up separate subsidiaries focusing on the outsourcing sector.

They liaison with law firms in the US and UK to understand the laws in those countries in cases of cross border deals between an Indian company working for a US-based customer. “It is becoming increasingly common for Indian software companies to seek legal advice when it comes to identifying complex issues and build familiarity with laws in foreign countries,” said Sandeep Farias, head, corporate and securities law practice group, Nishit Desai Associates.

Though the final decision is taken by a lawyer in the foreign country since Indian law firms have a license to practice only in India, the outsourcing lawyers help by providing a local perspective to the case and undertaking contract negotiation work. “Companies are getting more savvy and want to determine the implication of foreign laws such as the English law or the French law,” Farias said.

According to iGate Global Solutions’ marketing head Jessie Paul, firms have realised the importance of seeking legal help from outsourcing lawyers to ensure that human resource rules are not flouted. “Third-party legal expertise helps companies construct outsourcing deals and minimise pitfalls associated with the business,” Paul said. iGate Global Solutions has sought legal help while bidding for business in the US market.

“At a time when there is pressure against outsourcing and moving jobs to low-cost locations, companies need to sort out issues related to employee compensation, Intellectual Property (IP), risks involved in a business contract and hidden costs and liabilities,” Infosys Technologies president, CEO and managing director, Nandan Nilekani said.

Factors such as adherence to labour laws, security issues, confidentiality and non-compete clauses also need to be considered before signing on the dotted line, Mr Nilekani said. Infosys has sought legal help in the past. However, details on specific deals are not available.

“If a sizeable business deal goes southwards, companies would need legal representation. At times, certain services need to confirm to separate independent laws in each state and that also calls for local legal help,” said Forrester’s group director, research, John McCarthy. Experts usually make it easier by preparing companies on what to expect when it comes to dealing with tax issues and local labour laws.