Offshoring—law firms
Offshoring—law firms

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Offshoring—law firms
  • What is offshoring?
  • Key risks of outsourcing services
  • Transferring data outside the EEA
  • What can be done to minimise the risks?
  • Outsourcing IT services

This Practice Note identifies and explains key compliance issues relevant to taking outsourced services offshore and discusses managing risks. It focuses primarily on outsourcing of services to an offshore service supplier outside the EEA.

What is offshoring?

Offshoring is simply outsourcing services or support functions outside England and Wales.

There are three basic models of offshoring services:

Captive Some firms move certain aspects of their operations offshore to take advantage of lower labour costs and other financial benefits but still maintain direct control over the overseas operation by engaging all staff as direct employees or those of a foreign affiliate. This can be very attractive to law firms as a means of more effectively maintaining control, particularly where confidentiality and regulatory compliance are paramount
Third party Firms may outsource services to an offshore service supplier that uses its own workforce to perform the relevant services
Hybrid or split This model uses aspects of the captive and third party models, eg using a third party model for set up and implementation but the firm having the option to operate the service later on

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