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California Labor Code Violations Produce Big Damages Through Private Attorney General Act [PAGA]

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A Fictional Account of Labor Code Violations

Disclaimer: This story is completely fictional without reference to any particular person, company or employee. Any resemblance or name approximating a real individual or company is purely coincidental.

A Background Story of Multiple Labor Code Violations Leading to Penalties.

Melinda worked for Busy-Body Industries to clean homes. Busy-Body had a written employment agreement with Melinda and 2,000 other home cleaning persons in California. The agreement provided that all the Busy-Body employees were confirm their appointments the previous day by calling customers on a schedule delivered to the employee at the beginning of the week. The employees were also to call in just before and after each cleaning. Busy-Body required its employees to have mobile phones, and to subscribe to unlimited minutes through the wireless provider of their choice. Busy-Body paid a standard $2.00 per day to each employee for what Busy-Body designated as Mobile Phone Expenses.

Melinda and all other housecleaners used their mobile phones at least six times per day for Busy-Body related business. Melinda’s monthly unlimited mobile phone service cost $130.00 per month. Using her phone for company calls did not increase her bill.

Busy-Body also required its employees to purchase their cleaning supplies, and paid them a standard 40.00 per month as a set reimbursement based on a 12 month historical average for its 2000 employees. However, some employees worked in areas where the square footage of a luxury home required more cleaning agents than persons cleaning middle class neighborhoods.

Busy-Body collected the cleaning person’s tip as part of the pre-paid pricing and charged the employee a $5.00 per transaction fee for collecting the tips. Employees were not permitted to receive tips directly from customers. Busy-Body used this method to track tips in order to make individual tax withholdings and contributions for each employee.

Busy-Body also required each of its employees to launder and press their uniforms Employees not maintaining dress codes. As proof that uniforms were properly clean and pressed, Busy-Body required employees to scan and deliver a separate cleaning bill each week, but did not reimburse for these expenses. An employee not submitting an expense voucher for cleaning was fined a $15.00 “failed inspection” fee.

Also, Busy-Body employees are required to pay for their own vacuum cleaners and replacement bags. They are allowed to use the vacuum cleaners for personal use. Busy-Body considers the vacuum cleaner a tool of the trade, similar to tools owned and used by a carpenter.

A cleaning person when dispatched left his or her home to go directly to her first appointment of the day. There was no Busy-Body “home office” that cleaning people drove to or from when making their appointed calls. The Busy-Body corporate office is located in Tulsa, Oklahoma, with no office locations elsewhere in the country. Once a month, employees were required to attend a tele-conference which provided training, company news updates, and company feedback on customer demands, expectations, and satisfaction levels. Employees were expected to attend these conferences after their regular work hours while at their home computers, usually after 6:00 p.m. They were not compensated for this time, or the phone and internet expense incurred as part of these monthly meetings.

When Melinda questioned the Company practice of being fined for the “failed inspection” fee when she cleaned and pressed her uniforms at home on her own time, her manager said to her, and all on the conference, that the dry cleaning service was the only way the company could track that the company “brand” was being presented by each employee.

“Then we should be paid for the expense of the dry-cleaning,” Melinda said.

“You paid for the uniforms, and can wear them for personal use. It is not a company expense,” her manager had told her during the phone conference.

“Melinda was upset with this answer, and didn’t back down: But you picked the clothing, and it has our company logo on the shirts.”

“The logo is very attractive,” her boss told them. You should be proud to wear it for personal use.

Within a week after her comment, Melinda’s employer called her to say her services were no longer needed, and tor return her company documents and uniform. Melinda pressed for an answer why she was being terminated.

“I’ve never been written up. My customers all love me. This isn’t fair.”

“You’re an at-will employee,” the H.R. Director told her during the phone conference. “We don’t have to have a reason.”

STORY ANALYSIS TO IDENTIFY THE CALIFORNIA LABOR CODE VIOLATIONS and “PRIVATE ATTORNEY GENERAL ACT” [“PAGA”] IMPLICATIONS:

California Labor Code Violation: Personal Cell Phone Use for Business on An Unlimited Plan

This issue has been resolved in California by the Cochran decision. The employer cannot defend itself by the argument that it cost no more for the employee to use the phone. The court shifted focus to the benefit received by the employer, and required a factual inquiry into the average likely ratio of personal to employer use of the airtime. The employer owed the employees a percentage reimbursement of personal expenses incurred for the employer’s business.

Then the question is whether $2.00 per day for every employee is a fair and reasonable calculation of the likely personal to business use ratio. An employer is allowed in California to use an optional method of estimating costs instead of paying the exact dollar amount based on individual expense reports but there must be a close approximation based on evidence of real costs. An employer may want to follow this optional approach because of the difficulty and time associated with individual reporting.

In this instance, if the unlimited plan costs $80.00 per month, and the employees use their personal plans between 30% to 50% of the time for business, and a random check of business calls on the phone records support that range, then 40% could be a reasonable and fair reimbursement, as any one employee in any one month could use the phone more or less than the midpoint.

Melinda’s typical use is six times per day business use at 10 minutes each or 60 minutes per day. She uses the phone for personal reasons about 10 times per day at 20 minutes each or 200 minutes. The ratio of business to personal is 60:200 or 30%. At $130.00 flat fee, she should be getting $39.00 per month reimbursement. $2.00 per month is clearly inadequate.

California Labor Code Violation: Cleaning Supplies and Equipment.

Busy-Body pays a standard reimbursement rate $40.00 per month for cleaning supplies based on a 12-month historical average for its 2000 employees. Is this formula supportable by evidence showing that individual employees are being adequately compensated?

The cleaning cost appears reasonable based on the depth of the data over 12 months, but Busy-Body may need to sub-classify its employees into the “big home” neighborhood group and the “moderate home” group, as each set of homes will have its own “cost of supplies.” The more refined and specific the formula, the more likely it will be upheld as a legally sufficient approximation of actual costs.

The vacuum cleaners are tools owned by the employees who retain them in their personnel possession and are free to use them for personal purposes as well. They likely are not reimbursable expenses. But what about replacement bags and belts related to wear and tear for employer benefit? Those costs are arguably reimbursable because the volume of bag use for business is so much greater than for personal use. Busy-Body employees, for example, routinely use and dispose of at least one bag per home cleaning. Each employee cleans between 1 or 2 homes per day five days per week. Busy-Body could be left holding the bag for unreimbursed expenses owed to 2000 employees, including penalties, and attorney’s fees.

California Labor Code Violation: Imposing Costs for Collecting Tip Income

Passing this cost onto the employee would be illegal. In California, tips belong exclusively to the employee. Businesses routinely collect and distribute these tips. Most customers add the tip not as a separate payment to the employee, but as a component of the overall authorized card charge. Tip collection and administration is a cost of business to be absorbed without offset to the employee. Moreover, Busy-Body is required by law to treat the tip income as regular wages and subject to UI, ETT, SDI, and PIT withholdings. Busy-Body must therefore include the deductions in its paystub itemization. This itemization would include a category of “tip income,” or like wording. Failure to report, distribute and withhold all have tax and California Labor Code penalties for non-compliance.

California Labor Code Violation: Work Clothing Laundry Expenses

California employers who require their California employees to wear apparel unique to the employer’s brand by such features as color, style, design, or logo are must pay the costs to obtain and maintain the work related clothing. If the employee advances the cost, the cost must be promptly reimbursed.

In California, uniform cleaning and maintenance other than simple home laundry must be reimbursed to the employee. If the employee is required to spend time at home to meet specific care requirements of the employer, such as ironing, the “reasonable value of the time” used can be paid as an extra pay “allowance.” If the employee is required to incur outside laundry and pressing services, as might be the case with a dry cleaner, the actual employee expense must be reimbursed.

Busy-Body employees are required to wear clothing having the company logo, and are required to pay a “fine” if the clothing is verified as clean and pressed by a drycleaner. Busy-Body is required to reimburse these costs. Further, imposing a “fine” for non-compliance is an improper deduction from wages unrelated to an employee’s willful or grossly negligent damaging of company property. The fine operates as a “charge back” against earned wages in violation of Labor Code Sec. 221.

California Labor Code Violation: Travel and Commuting Expenses

Busy-Body employees have no “home-base,” that is, no place they predictably report to work, such as a staging area or corporate office. Instead, their schedule takes them from their private homes to a scheduled customer location often different each work day. The usual rule is that commuting expenses are not reimbursable travel expenses, but Busy-Body employees have no “commute” from home to first work location. All their work related driving expenses are therefore reimbursable. To reinforce this conclusion, the Busy-Body corporate office is out of state with no satellite offices.

There are 2000 Busy-Body employees across the country, each with a different set of distances actually traveled. Busy-Body must reimburse actual individual travel expenses, portal to portal, for each employee based on expense vouchers submitted. California case law recently allowed employers the option to pay a standard travel expense payment without regard to specific recorded expenses but only if the formula has a rational and proximate relation to actual expenses. Most companies use the prevailing IRS mileage reimbursement rate as an acceptable rate to cover gas, insurance, and maintenance. This rate, coupled with data showing the average travel range in various regions of the country (requiring Busy-Body to sub-classify its employees) could satisfy California law and reduce employer administrative costs.

Melinda’s Case for Wrongful Termination — Retaliation

Melinda is an employee “at-will” but that status is irrelevant to the likely reason for her firing in this case. She had a good work record. Her first friction with Busy-Body was when she questioned the propriety of laundering Busy-Body required uniforms. She was fired a week later with no explanation. The firing was illegal because Melinda protested an issue covered as a “fundamental right” in California: payment of wages and expenses. California allows this “cause of action” to be heard by a jury if Melinda reasonably believed the violation of law occurred, and in some manner complained to the employer about the illegal practice. The short time between between complaint and firing, coupled with her good work record, is strong circumstantial evidence that Busy-Body’s motive was to punish or silence Melinda.

Strength in Numbers: California’s Private Attorney General Act [PAGA].

California has a unique law that appoints private attorneys to prosecute cases on behalf of the State of California, Department of Industrial Relations, Labor and Workforce Development Agency. This Act is labeled California’s Private Attorney General Act [PAGA].

PAGA is so powerful because it gives an enforcement energy that was almost completely lacking given limited agency resources. This lack of resources, and the widespread scope of abuses, led the California legislature to basically allow private attorneys to be “Attorneys General” for the good of the public. A powerful incentive of the law is that these private attorneys can recover penalties from employers, and recover attorney’s fees incurred in prosecuting the case. The recovered penalties are divided between the State and the employees.

But one aspect of the case unlike a state action is that an employee brings the suit on behalf of multiple other employees who are invited to join the lawsuit. The corpus of money recovered is then held to be claimed by the employees after the State gets its share. Many PAGA cases will settle before trial, and the State is often willing to compromise its share of the total recovery to less than the statutory 75% in order to facilitate the settlement.

The Private Attorney General must notify the Labor and Workforce Development Agency [“LWDA”] in detail concerning the nature of the proposed civil action, and the employer must be notified before suit with the opportunity to correct the alleged violations. If the LWDA declines to sue on the matter, and the employer does not present timely “cure” of the violations or conditions, then the individual employee represented by private counsel may proceed on behalf of the State of California and the employees to collect the penalties. Labor Code Section 2699 defines a hefty penalty: for most employers the fine is $200.00 for each aggrieved employee for each pay period in which a violation occurred. There is a one-year statute of limitations from the date of the last violation in a series to collect penalties. 26 pay-periods times $200 = $5,000 per year per employee X 2000 employees =$10,400,000.00.

The Technical Issues Related to a PAGA Case.

Multiple questions have been raised by defendant Employers and the Courts concerning the interpretation and future of PAGA. Some of the more pressing ones:

  1. Does PAGA have to meet class certification requirements applicable to the standard Class Action case.
  2. Can Courts require a PAGA employee named in the action to go to arbitration to determine the merits of his individual action to determine if he is a typical representative of the issues to be addressed in the PAGA case. [Undecided by a Court of Appeal, but Trial Courts are in fact “managing” PAGA cases this way.]
  3. How much discovery is required at what stage of a PAGA case for a court to determine the scope of the PAGA claims? [It appears that the Courts are following the trend begun in class action certification motions to include evidence obtained in an individual arbitration proceeding to determine the probable merits of the claims, but there has been no appellate decision published on this question as yet.] Discovery will be accelerated on the individual claim to meet the burden of proving that claim in Arbitration.
  4. What is the effect of the 2015 California Supreme Court decision [Valencia] on the future of PAGA cases? If the Federal Arbitration Act applies to require an individual to arbitrate his individual claim and to waive class action participation, does that same pre-emption by federal law apply to a PAGA case? Employees argue not: that it is the State of California, and not the employee, who is represented by the “Private Attorney General.”
  5. What is the standard of proof for PAGA damages when each employee may have been damaged somewhat differently, but within a probable range of minimum to maximum loss? The answer has been given in the “Duran” case. Statistical evidence is admissible to arrive at an acceptable probable amount of damages despite individual employee variations if the probable number is arrived at an expert following generally accepted statistical methods with adequate sampling. Whatever the method adopted by the Court, it must allow the Defendant fair opportunity to attack the methods used or the sampling relied upon by the employees.

Conclusion

Busy Body will have a busy time in Court. The list of its employee rights violations is long: unpaid mobile phone expenses; wrongful assessment of employee penalties to reduce wage payments, failure to reimburse uniform laundry expenses, unpaid expenses for supplies needed to do the work; unpaid travel expenses, failure to deduct and itemize tips and taxes withheld; unpaid work hours for mandatory training. Each of these violations carries penalties set by statute, and if fully assessed against Busy-Body, will result in tens of millions of dollars in damages if the Court allows the case to proceed as a PAGA case, or if the case qualifies as a class action unrestricted by an arbitration agreement. The freedom to proceed with a PAGA case is under attack by the employer community. To the extent the courts are inclined to impose class action case management tools in a PAGA case, the freedom to proceed subject only to the PAGA notification requirements seems at risk currently. Still, Melinda and Busy-Body may well have a complex and costly battle that will end with millions paid or lost. Melinda herself will proceed on her own case for wrongful termination because of retaliation when she opposed some of these illegal practices.

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Top 10 Tips For Beginners And Veterans – Escape From Tarkov

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Top 10 Tips For Beginners And Veterans - Escape From Tarkov

New at the legendary Escape from Tarkov? Or have you been playing it for quite a while now? In either case, a little help never hurts.

You might be unfamiliar with specific tactics that could enhance your game and make you better. But what are those? To know more about these ways to ace your game, visit Battlelog. Escape from Tarkov hack from their team is the best way to master the game. Plus, we also have these 10 tips and tricks for EFT below that you can check out!

1.  Master Maps One-by-One

Being a trader of all crafts and master of none never benefited anyone. And if you do that with Escape from Tarkov, you’ll never improve your skill. As a beginner, try not to divert your attention to various maps unless you’ve mastered one or two.

When you start playing EFT, begin by trying maps like Customs and Interchange. These maps aren’t too tricky and familiarize you well with the game. Once you’ve mastered them, move on to improving your fighting skills. But remember, learning maps one by one is the best way to become an expert.

2.  Pro-tip: Practice Offline

You’re an EFT pro, but that doesn’t mean you don’t need practicing occasionally. In fact, the more you practice, the better you’ll become. But practicing in the online mode isn’t a wise option. Because you will keep losing health and spend your money unnecessarily.

So to practice, switch to offline mode. It’s the best way to learn how to fight Scavs well, how the maps work, and where extraction points are located. Keep polishing up your skills in the offline mode.

3.  Insurance Works in EFT too

Insurance isn’t just for your car and home anymore. In EFT, you can insure your weapons and belongings. This doesn’t mean that if the enemy loots you, you’ll get compensation for them. But it’s still advantageous because it often lets you have your weapons even after you die.

If you’re an experienced player, insuring your weapons is even better. If the enemy who loots it from you later dies, you can claim your weapons back. This way, you don’t lose those precious guns and rifles after a challenging game.

4.  Be Careful After Killing

You might be tempted to loot an enemy as soon as he dies. Even experienced players often do it. But this isn’t always a wise move.

When you kill someone, there might be some other enemy lurking around. And in your fit to loot the dead, you might not even pay attention to the enemy who’s hiding nearby. So after you kill, wait for a little to see if anyone surfaces or makes a sound. If you feel like the territory is safe, proceed to loot and move on.

5.  Be a SCAV friend when playing as a SCAV

Escape from Tarkov often lets you play as a SCAV. When you do, you don’t have weapons of your own. But you also don’t carry any liabilities. So even if you die in the game, you won’t lose essential weapons.

But here’s something every pro player knows that a beginner should too. As a SCAV, you shouldn’t attack other SCAVs. But why? Isn’t that foolish? Well, not really. In fact, doing that will attract negative attention to you and make the game difficult.

6.  Complete Quests – Lots of Them

Completing quests in a shooting game might sound lame to you. But it is an excellent way to gain experience and some other perks.

In Escape from Tarkov, you can complete various quests to get rewards and gear. Of course, some quests don’t reward you as much, and the items they grant aren’t helpful. But you can always trade them or sell them to stock up on weapons. Use the Flea Market for trading such goods.

7.  Go to Dorms

This tip isn’t really for beginners. But for experienced players, it makes the game thrilling and more rewarding.

Dorms are a dangerous location because they often contain the best loot in EFT. They are also home to the SCAV boss, and many players frequent this place looking for loots. But when you’re feeling up to it, raid a dorm to get the best loot possible.

8.  Switch between passive and aggressive style

This rule works for any combat game, but for EFT, it does wonders. As a player, you should have enough instincts to know when to play passively and go aggressive.

As a rule of thumb, be as passive as possible unless you’re faced with an opponent. Move around sneakily and make as little sound as possible. But once you’re in a fight, don’t shy away from landing a few hard blows of your own.

9.  Have a CMS Kit

In Escape from Tarkov, it will be too difficult to win if your limbs are dead or wounded. You have to reach an extraction point without your feet working properly. But recently, the makers added a surgical kit called the CMS to the game.

With the CMS kit, you can get your limbs healed quickly. It is a significant investment, and whenever you plan to go for combat, keep this one handy.

10.Know Your Sounds

EFT has an excellent sound mechanism. You can hear your enemies, and they can listen to you. In fact, everything from aiming a gun to moving makes a sound. So you have to be highly conscious.

While trying to ambush or kill someone, aim at them from as far as possible. This way, there’s little chance of them hearing you. Similarly, move stealthily to make fewer sounds. And no matter what, pay attention to enemy sounds too.

Conclusion

Whether you’re an expert veteran or a newbie at the game, you will benefit aplenty from these 10 EFT tips. Comment down below which one helped you the most in your game.

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Work Breakdown Structure and Outsourcing

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Every outsourcing project should create and make a WBS available to all its outsourcing staff. What is a WBS and how can it help you manage your outsourcing project? All projects consist of small tasks and quality control procedures. A Work Breakdown Structure (WBS) breaks down all the tasks that must be performed on the project and estimates timing and resources for each task as well as the order the tasks should be done in. It pays to have a clear and effective WBS in all your outsourcing projects.

An effective Work Breakdown Structure starts with high level activities (these may be your milestones) and breaks these activities down into lower and lower levels until you’ve covered every conceivable step in the process. Before you ever begin work on a project, also confirm with your outsource staff that they understand the overview and the individual components of your WBS and give them the opportunity to ask questions. It is never helpful to assume that they have it all under control. It is preferable that if any questions or problems arise they do so before the project has even started.

An example of a WBS is if one of your milestones is submission of the first draft of chapter one of a book someone is ghostwriting for you. You would then break that down into its smaller steps, like research, outlining, and writing. These steps would then, in turn, be broken down into even smaller steps, like types of research, verification of facts, and so on.

For each low-level task, estimate time needed for completion, start and end dates, human resources required, and in what order each task should be completed. Obviously, facts can’t be verified until the research is done but you get the gist.

If you have the knowledge and background to begin a WBS during the planning stages for your project, please do so. Regardless of whether or not you’ve already started the WBS, work with your provider to nail down the details and finalize the breakdown.

A well thought out Work Breakdown Structure is of immense help to any project, small or large. It enables your freelance staff to work with confidence and it enables you to know that your outsourcers can carry out the work competently. A good Work breakdown Structure will also minimize hiccups, saving time, money and energy.

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Potential Cost Savings Associated With Legal Outsourcing

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“How much can I save?” “What is the cost of legal work done offshore?” “Please give me a quote for 100 hours per month for legal work done in India.” “What is your hourly rate?” “How much do you charge for ______?” These are the questions and requests directed my way at the beginning of conversation when someone contacts me about sending certain legal tasks offshore for completion.

Regularly I advise potential clients that the first question to be asked, either of a lawyer or someone potentially assisting in the outsourcing of a legal project, is not “how much?” Instead, at the outset, determination should be made whether those who would work on the project have the skills, training and experience to complete the assignment(s) in a quality fashion. This necessarily involves a clear delineation of the proposed undertaking and the expectations of the outsourcer. Further, what are the assurances of confidentiality? Can the time deadline for completion be met? What about conflicts of interest? These questions should be asked of every U.S. lawyer whose services might be retained. Likewise, they should be asked of every person or entity involved in outsourcing legal assignments. It should be noted that offshore lawyers are not licensed in the U.S. and do not provide “legal services” or advice. Foreign attorneys, working offshore, complete assignments under the supervision and review of qualified U.S. attorneys in generally the same manner as paralegals, summer law clerks or junior associates in the U.S. Indeed, the Code of Professional Conduct requires such supervision.

Cost savings achievable from outsourcing, however, seems to be the burning issue of the day. Large law firms, in particular, are looking for ways of cutting costs to maintain profitability or to even survive in challenging economic times. Dan DiPietro, client head of Law Firm Group of the Citi Private Bank, offered Storm Warnings (American Lawyer, Dec 2007) in observing “for the first time since 2001, expense growth actually outpaced that of revenue from January through June, depressing profit margins.” Sounding an ominous note, DiPietro observed that the biggest expense increases were in associate salaries and in occupancy and technology costs. His warning proved prophetic, as a number of old-line law firms closed their doors in 2008 including Heller Ehrman, Thelen LLP, and Thacher, Proffitt & Wood. Other large law firms are reducing staff and lawyers, including de-equitizing partners. Corporate clients are cutting the number of outside firms they engage, while pushing them to become more efficient. It is becoming increasingly apparent that difficult decisions are on the horizon for many law firms and their clients. Law firms want to retain their rainmakers, secure the best legal talent available and keep their profits per partner high. Clients want their overall costs for outside counsel reduced. How will these issues be addressed, particularly in a difficult economic climate? Outsourcing is one way of potentially confronting the challenges. Thus, the question, how much can I save?

Assuming the proper initial inquires have been made and adequately addressed, what are the cost savings reasonably attainable by an outsourcing U.S. law firm and its clients? Answering that question necessarily involves a comparative analysis of revenue and expenses. Suppose a large U.S. law firm wishes to consider outsourcing work that might otherwise be performed by one U.S. associate working exclusively for one of the law firm’s corporate clients. The junior associate bills 2000 hours annually at the lawyer’s hourly billable rate of $200.00, for a total annual cost to the corporate client (and income to the law firm) of $400,000. The law firm’s expenses chargeable against the income produced by its associate include the lawyer’s base salary ($160,000) and bonus (say $20,000) plus the associate’s share of overhead expenses for occupancy, support staff, benefits, marketing, recruitment, technology and other expenses. In its 2006 survey, Altman Weil, the well-regarded legal consulting firm, estimated average annual law firm expense per lawyer at $161,893. (Doubtless those expenses have increased since 2006, but, for the purposes of conservatism, we will use Altman’s 2006 number in our example.) Altman’s breakdown included promotion ($7,136), reference ($4,655), equipment ($9,299), occupancy ($25,879), staff ($55,147), paralegal ($17,911) and “other”($41,866). In the Altman survey, “other” includes malpractice insurance premiums and settlements, payments to former partners, recruiting costs, and other expenses not shown separately. Adding the associate’s share of expenses ($161,893) to the associate’s total earnings ($180,000) it is apparent that it costs the law firm a total of $341,893 to produce $400,000 in associate income. Let’s call it a $60,000 law firm profit attributable to the associate’s efforts. Put in other terms, it costs the law firm $171 per billable hour of the associate’s time to produce $60,000 of profit.

Now, assume the same 2000 hours were produced offshore at a cost of, say, $75 per hour instead of $171 per hour. (Higher end outsourced work such as legal research or writing might cost in the range of $75.00 per hour, while other kinds of work such as document review would likely be less. For purposes of our analysis, we estimate the overall offshore costs toward the higher end.) The actual cost to the law firm for 2000 offshore hours at $75 per hour would be $150,000 instead of $341,892. Further, the law firm’s client could be billed, say $240,000, for this work instead of $400,000. (Recent bar association ethics advisory opinions allow for a reasonable supervisory fee by the law firm, providing the client is advised of the off shoring and the Code of Professional Conduct, particularly Rule 1.5, is followed). The client would happily achieve a savings of 40%, while the law firm’s profit would also likely increase. Moreover, the law firm would require fewer associates at the ever-escalating salary structure (now starting at $160,000 base) for lawyers from top tier law schools. Because of overall lower costs and a fewer number of new associate hires, the firm would be able to more effectively compete for a reduced number of premier U.S. attorneys it decides to hire. Over time, partner equity and distributions would be shared with a fewer number of individuals. Thus, an outsourcing program for selected legal assignments, carefully implemented and supervised, can potentially result in greater client satisfaction and retention as well as enhanced law firm profitability.

In 2007 Mayer Brown, a 1500 lawyer Chicago based law firm, purged 45 equity partners. While denying any sort of crisis, James Holzhauer, chairman of the firm, commented on the move: “It’s necessary to manage a law firm like you manage any kind of big business and make sure you have the right staffing going forward.” Outsourcing, seen by some law firms as the enemy of law firm profits, may in fact be the opposite. Without doubt, even if some law firms are reluctant to change the traditional ways, their clients are not. In August of 2007 Bloomberg.com observed that “clients are pushing firms like Jones Day and Kirkland & Ellis to send basic legal tasks to India.” It is significant that this “push” came well before the global financial collapse of the last quarter of 2008. Regarding law firms, Holzhauer cautioned in March of 2007: “This (law business) is to a certain extent a fragile business. Our greatest asset is our people. If you’re not economically strong so that you can retain your best people and attract other strong people from elsewhere, a fragile business can have problems.”

Corporate clients are on a mission to reduce legal costs. Some of those clients would prefer to supervise the outsourced work in house, while others apparently are content with their chosen outside U.S. counsel overseeing the offshore work. Irrespective, legal outsourcing is on the table for consideration of cost control. “How much can I save?” is a question being asked by those who, a few short years ago, never imagined entertaining the concept of legal assignments being completed offshore.

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ICT Outsourcing Definitions and Types

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ICT outsourcing can be said as one of the current trends for companies around the world to do their business processes. It is estimated that ICT outsourcing starts in the early 1990s where Kodak uses external partner to handle its ICT resources. As Kodak does not have the expertise in ICT, they hire another company to help them handle the ICT resources. This phenomenon occurs because companies would like to concentrate their core business functions among other benefits. After merely 20 years, outsourcing is now needed by a lot of companies mostly at customer support and also back-office processes and this affects Malaysia as well. Currently, Malaysia is known as a main outsourcing hub for the world, where it is currently ranked third globally behind China and India in the outsourcing industry. This shows how significant outsourcing is to developing countries in Asia.

Outsourcing Definition

Outsourcing is defined as a concept of contracting out part of the organization’s business process to a third party that has the specific skills and services. The third party must have the skills needed by the organization so that the outcome of the outsourced job is as expected. Outsourcing can also be explained as the movement of one or many business functions of a company including its assets to an outside service provider who gives a defined service for an agreed duration of time and payment on a written agreement.

From these two definitions, we can see that outsourcing can be defined with the following characteristics:

1. A company transferring one or many business process to a third party.

2. A third party has the skills and services required for the business process.

3. Has an agreement or contract between the two parties on the price and expected outcome.

Types of Outsourcing

Outsourcing can be separated into two types, namely total outsourcing and selective outsourcing.

The first one is total outsourcing, where the IT budget being used to pay the external vendors is approximately 80% or more than the total. For outsourcing activities that only took less than 80% from the total IT budget, it will be called as selective outsourcing. It is named as ‘selective’ because the company will select only one or several IT functions to be outsourced to a third party.

Aside from these two main outsourcing types, there are also other types of outsourcing that are usually the sub-division from these two main types like insourcing and transitional outsourcing.

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Medical Transcription Outsourcing – The Great Advantages

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If you haven’t started outsourcing your medical transcription work, it may be time you start considering this option. This process includes taken information that is dictated and putting it into a text format so the information can be put into records for patients. You’ll actually find that there are many advantages to going with medical transcription outsourcing. Here is a look at a few of these advantages that your medical facility will appreciate.

One of the main advantages to going with medical transcription outsourcing is the time that you will save. There are many types of reports that must be done in clinics and hospitals, such as consultation notes, discharge summaries, physical reports, lab reports, and more. Having to take care of these files on your own can take a lot of time. Instead of doing this in-house, you can simply send files to a transcription company and once they are transcribed they can be sent back via the web. Outsourcing gives medical facilities the ability to focus more on core activities that are important, such as patient care.

High end security is yet another of the benefits of going with medical transcription. When you send these files to the company, they are sent securely on the web. Then they are transcribed into a format like HTML, ASCII forma, MS Word, or other formats. Then the files are going to be returned through a process that is password protected so only those who are authorized are able to access these files.

When you choose a company to take care of this for you, you can be assured that the transcriptionists working on your projects are highly skilled in the profession and they have a good understanding of the rules for producing these records. Transcriptionists that understand the terminology helps to ensure that your reports are done error free.

Of course, the cost is definitely a big advantage that you’ll enjoy when you go with medical transcription outsourcing. There are many companies that provide you with low cost outsourcing, which can save your medical facility a lot of money. Instead of trying to take care of transcription within your facility, hiring the work out can save money and ensure you get your records completed as quickly as possible.

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How to Succeed With Business Process Outsourcing (BPO)?

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As outsourcing becomes an indispensable part of corporate business strategy, especially during economic downturns, BPO (Business Process Outsourcing) has emerged as an important driver of IT Enabled Services. In very recent years, it has progressed from being considered for limited peripheral activities to encompassing very critical business activities that contribute to strategic advantage.

Though traditionally cost reduction has been the key driver for all outsourcing activities, other drivers such as speed of development, flexibility, expert skills and political maneuvering are equally important, if not more.

To succeed with Business Process Outsourcing (BPO), you must first research and determine if outsourcing should be pursued at all – an initial understanding of the expected size and nature of the deal is a must at this stage. This phase is known as the Assess phase as the involved parties try and establish senior stakeholder expectations at this stage. At the end of this phase, stakeholders should have clarity on the expected benefits, costs and risks of the potential engagement.

Next comes the Prepare phase which encompasses the vendor selection process. More often than not, organisations roll out RFPs (Request for Proposal) documents to find the right outsourcing partner. Fundamental elements of all other phases are defined and agreed upon in this Phase.

Evaluate phase is the third stage of the outsourcing lifecycle and it focuses on structured and thorough evaluation of the proposals received from vendors. At the end of this phase, you should be able to negotiate with selected vendors.

This phase paves the way for the Commit phase which is essentially the pre-contract stage. The Commit phase is by far the most resource intensive and commercially crucial phase as the deal design is finalized and the transition plan is developed in this phase.

Next comes phase 5 which is the Transition and Transform phase. In this phase, a robust transition plan is implemented. In addition, a reporting mechanism is also brought in place at this stage of the outsourcing lifecycle.

The Optimise phase, which comes next, focuses on managing the vendor relationship efficiently, tracking the vendor fees against the original proposal and monitoring contractual obligations. In principal, this phase is an ongoing one until the contract is renewed, renegotiated or exited.

When implemented properly, outsourcing contracts are likely to bestow immense benefits on organisations. No wonder that BPO is seen as a disruptive force that has huge impact on the cost-structure of nearly any industry and that is why it is not easy for organisations to ignore it. The hype around BPO may subside soon, but the business advantages that come with it are here to say as it enables many enterprises to succeed.

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Payroll Outsourcing

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Payroll outsourcing is a very common and growing practice these days. Payroll is an important business function that deals with the process of paying employees for services rendered. Payroll outsourcing can be defined as the accomplishment of a payroll task by some external agency. There are many reasons why companies outsource payroll, but the most prominent benefit lies in the fact that it often saves money. Basic payroll outsourcing services include calculating paycheck and tax obligations for each employee, printing and delivering checks, and providing management reports.

Every business owner knows that handling payroll can be a headache. Preparing payroll internally can cost valuable hours of employee time every pay period, and require expensive accounting software and training. Besides, the person handling payroll of an organization internally needs to keep up to date with changes in personnel, deadlines, and tax requirements on an ongoing basis. Payroll outsourcing is an affordable way to take away these burdens, because it is a time-saving and cost-effective alternative to internal payroll processing.

Payroll actually commences with the worker signing up with a company. A typical payroll report contains items such as gross hourly wages and gross salaries, bonus payments including stock given as a bonus, overtime pay, severance pay, per diem and travel allowance, and contributions to deferred compensation by employees.

Today, payroll outsourcing is a vital part of an organization’s payroll and benefits functions. This will improve employee satisfaction and enable the organization to focus its assets on mission-critical areas. The market for payroll outsourcing services is competitive and there are a number of key points, such as speed, accuracy and ease of use, to consider when opting to use a payroll company.

Though payroll outsourcing may prove highly valuable for many organizations, it also has many drawbacks. It is essential that every company precisely assess its requirements to determine if outsourcing is a feasible alternative.

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Why Hire an SEO Content Outsourcing Firm?

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Every small and big company has a website today. A website has all the information about the products and services a specific company has to offer. Websites make the selection process easy for the customers. But what if the customers are not able to access or find the website? This can ruin the company’s business, bringing in losses. Exposure can really help a company sail through.

There are some major elements which can be added to a website to make it more popular, user-friendly and search engine friendly. These elements include the right animation, pictures, colors and content. Content is one of the most important elements of a website. SEO based content can bring in amazing results. A good SEO content outsourcing firm can help you earn more money. Along with this, it can:

· Help in search engine optimization of your website

The search engine optimization process depends on the website’s content to a great extent. An SEO content outsourcing firm can make your website’s content rich and interesting. Along with this, its experts put a lot of relevant content in the website to make it search engine friendly. SEO content writing also includes producing keyword rich content which helps in the link building campaigns. The usage of latest keywords related to your products and services can help search engines read your website’s content more often. This will make the search engines display your company’s website in the first few search results when a user types in a related keyword.

· Help in link building campaigns

The SEO content writing firms offer an array of services today. These services include SEO content writing as well as article writing. The latter basically helps a website get more exposure. The articles written by the experts of these companies are submitted on various article submission websites. This helps in the process of your website’s link building. Article writing services can help your website receive more traffic which can ultimately help you get more customers.

· Help people to know your company better

A good SEO content outsourcing firm can help people understand your company better. The website content and company related articles can be used to express your mission and vision. You can even use these platforms to share the background of your company. All these things may help the customers connect with your company.

SEO content writing and article writing services can help you earn people’s trust. They can bring in huge traffic, high conversion rate and many other benefits. You can use these services to set up your company’s rapport and to make it even more popular internationally. So, hire an established SEO content outsourcing company and gear up to earn the profits!

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Things to Consider When Outsourcing Support Functions of Your Organization

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Outsourcing is defined as hiring a third party provider to take care of certain non-core areas of business like technical support and customer care support. By outsourcing support functions of a company, one can save on a lot of skilled manpower that can be used to develop core areas like business development while at the same time cutting costs by outsourcing without compromising on the standards of excellence of the company. Technical support and customer care support are the two main areas where large companies or even relatively new startups outsource.

Usually, technical or IT support is outsourced to other countries to cut costs. This can prove beneficial to the company in the perspective of a long term contract. But at the same time, this requires a lot of careful planning and research. Some of the main points to be bare in mind while outsourcing these tasks are outlined briefly below.

In the extremely competitive business environment of today’s world, outsourcing supportt especially customer support is a crucial factor in determining the position of a company among its peers. While outsourcing customer support services to a service provider, one should always research the credentials and client history of the company. This gives a fair idea of the company’s standing and what you can expect from it. Also, one needs to determine whether the company holds regular accent training classes to make its employees familiar with the language they are required to speak in.

Outsourcing support of the technical kind is a very lucrative option for companies since many countries offer highly skilled technical expertise which can be utilized to further the company’s prospects in a global environment. But you should always do a thorough background search on the level of competence in technical areas of a business and the best way to do it is to visit the place personally and get a first hand account of the way things are done. Also, one can ask the service providers to complete a few projects on a trial basis and a fair judgement of the service can be done to analyze their potential.

Before outsourcing support of any business process the first factor to be considered is whether it is a viable option for the company. Sometimes, certain companies spend more on outsourcing than on the core areas of the business like business development. A detailed analysis of the company should be done and after considering the various risk factors and the benefits, a final decision should be taken in the light of the company’s future plans.

Another point to be taken into account is the commitment of the service provider in executing the projects in time. There is a difference in the time between any two countries which could lead to a lot of confusion in the setting of the deadlines. The company should have a strict policy in case of assignments submitted late or projects not done satisfactorily. If all factors are kept in mind, then the company can have a very lucrative future due to outsourcing support.

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TPF Outsourcing – What Does It Mean And Why Are More Businesses Doing It

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When was the last time that your made a major purchase or even a small purchase for that matter? Do you remember what took up most of the businesses actual man hour time when you made the purchase? If you stop to think about for a moment, it was when you were completing the transaction or paying for what you were purchasing that occupied the most amount of time of the person or business that you were dealing with.

TPF – Transaction Processing Facility

TPF stands for “transaction processing facility” and this, in simple terms means anywhere in a business where the actual money and paper work is changing hands. This, in most businesses that you visit on a daily basis would be the main focal point of their operation many times. It is the “front office” or the “check out counter”.

It All Makes perfect Sense

TPF outsourcing is the means by which a business hands the responsibilities of this mundane task to a source that is outside of the main business operation. If you stop to think about it, it makes perfect sense, because once a customer or client has made the decision to patronize an establishment, the job of the business should then shift to finding more customers or clients and also servicing the customers or clients that are active.

TPF Outsourcing for the Travel Industry

The travel industry is one area where TPF outsourcing has began to take hold in a big way for a number of reasons. One of the big reasons this is so, is because unlike other business where the customer or client leaves after they have made a purchase. In the travel industry the client has to be dealt with after the purchase is made. In simple terms TPF outsourcing in the travel industry frees up the businesses to fly the planes instead of manning the ticket counters.

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