Taking Issue

Misleading. At best.

Law.com reported today on Kroll Inc.'s annual survey on corporate fraud. And for some reason law.com used the following headline:

"Legal Pitfalls of Outsourcing May Outweigh Benefits, Says New Survey"

Except, that's not at all what Kroll's report says.

The first sentence of law.com's post reads:

Companies that choose to outsource work to save money may be buying themselves more legal trouble than it's worth. That's one conclusion from Kroll Inc.'s annual global corporate fraud survey released Monday.

Except, um, that's not even close to any conclusion reached by the survey.

Based on that headline (at a legal-based web site) and that opening sentence, you might think the survey discussed Legal Outsourcing. It doesn't.

Based on the headline and that opening sentence, you might think the survey discussed the legal ramifications of other types of outsourcing. It doesn't.

The second paragraph of law.com's post opens with:

Asking if outsourcing is really worth the risk, the survey says companies often make the decision "without a thorough assessment of the risks involved in determining what is to be outsourced, and to whom."

The quote from the Kroll's report is pulled from a section solely dedicated to the discussion of IT Outsourcing. The title of that section is IT Outsourcing: Is it Worth the Risk?

But not even in this section are legal ramifications discussed. The intent of this section of the report -- in the report's own words -- is to present "a strong reminder that technology companies, including IT outsourcing ones, are vulnerable to the same common frauds - such as internal financial fraud, vendor or procurement fraud, and the theft of physical assets - that can occur in any other business."

The survey never intimates that the risks outweigh rewards. The survey simply says do your due diligence. Just like you would do in any other business capacity.

What does the report actually have to say?

It says that the financial services industry has been hit the hardest by fraud.

It also says that the professional services sector (which includes legal services and legal outsourcing) reported the lowest level exposure to fraud.

So, at the end of the day, the report says that while the internet has expanded business services, it has also created additional sources of potential fraud. Nothing earth shattering there. The report says to make sure that any vendor or business partner has proper data security safeguards in place.

Again, business as usual.

But nowhere in the survey does it conclude that legal pitfalls may outweigh the benefits of outsourcing.