Knowledge Services

There has been a paradigm shift due to reliance on computers and electronic information. The attorneys involved in litigation try their best to understand the policies and practices that have been put in place by the IT department to restore electronic data. Given the complexities of modern litigation and the wide variety of information, electronic discovery often requires IT professionals from both the parties in litigation and the attorneys' offices to communicate directly to tackle technology incompatibilities and agree on production formats. Failure to get expert advice often leads to additional time and unexpected costs in acquiring new technology or adapting to accommodate the collected data. It is an imperative business prerequisite that one craft and deploy a good record retention policy. The key ingredient of the policy is how and where the information will be stored so as to facilitate trouble-free restoration of the information as per business exigencies. To avoid severe legal penalties one must be able to demonstrate the existence of a well designed retention policy.

Posted by Kodaneth Sunil Kumar Nair at 10:24 AM | Permalink | Comments (0) | TrackBacks (0)

The US economy is shaping up for a moderate recovery largely through inventory draw-down and (now quite lately) consumer spending. This has prompted market observers to discuss the monetary policy rate hike timing by the Federal Reserve and many believe that hikes were round the corner but has been delayed keeping in mind the European sovereign debt crisis. A part of this is not untrue. However, if we look closely, consumer spending has not been contributing anywhere close to what it has done historically. Partly, this is because of the ongoing deleveraging after the asset price slump and partly it is because of the high unemployment. This time around the US employers were fast to off-load sizable chunk of employees in relatively quick time, and together with historically lowest level of industrial capacity utilization it provided the Fed enough room to carry on with their seriously accommodative monetary policy. Plainly speaking, the economy needs to be on a self-sustaining route (a phase which necessarily comes before overheating) and the inflation expectations should be seen as rising beyond "comfort zone" to provoke a hike. 

It would take quite some time before the economy would see overheating as far as the gap between actual and potential GDP is concerned. Currently the gap is around 6% of potential real GDP and would remain positive for most of next couple of years (or perhaps three years). The monetary policy operates with a lag (or as said sometime that it is "forward looking") and the transmission mechanism takes about 12-24 months. Therefore if the overheating starts in 2012 end, Fed should start raising rates in early 2011. Nevertheless, Fed may hike rates sooner if it finds inflationary pressure building in the economy. The biggest source for the underlying inflationary pressure comes from the level of utilization (both labor and capacity). (To prevent the abrupt course change, Fed avoids basing its stance on normal measure of inflation and prefers instead a set of "core" prices) In fact, and if we go by the history, fed waits for some substantial fall in unemployment rate before it assumes that the economy is on right path. With present shape of the domestic demand (and foreign demand too) it would take long before the economy achieves a significant reduction in the unemployment rate. Therefore, Fed would take another 6-9 months to raise the rates if at all unemployment falls below 9% in next 2-3 months.

In general, Fed provides sufficient signal through MoMs and speeches by Federal Reserve officials before changing the course of a "tightening" or "loosening" cycle. On most of the occasion they are in control of their decision - both from the information point of view and from the impact point of view. This time is different though. This time the stakes are too high to make a mistake like they did in 2003-04.

Posted by Dev Ashish at 4:02 AM | Permalink | Comments (0) | TrackBacks (0)

The global economy is now facing the twin headwind of sovereign crisis in Europe and a slowing Chinese economy. With the Chinese CPI touching 2.8% and close to the 3% rate which is supposed to trigger emergency measures like rate hike.

Question though is, in a highly overheated economy, is the Chinese inflation really as low? Despite having several control mechanisms and administered pricing regime, Chinese inflation is spiraling and the people are unwilling to accept the official data.

While the Chinese CPI is below 3%, the PPI numbers are more than double.

Source: National Bureau of Statistics, China 

But, even that might not explain. If we use the difference between the growth rate of nominal GDP and the growth rate of real GDP, one can arrive at some proxy for inflation and the numbers look interesting. With the Q1'10 number released recently, the differential stood at a whopping 12.2%. Any views?

Source: National Bureau of Statistics, China 

Posted by Kunal Kumar Kundu at 2:39 PM | Permalink | Comments (0) | TrackBacks (0)

  You are outsourcing a contract management or an M&A project for the first time. You have spent weeks selecting a vendor and think you have a good deal in place. Chances are that everything will go off smoothly as per the project plan the Vendor submitted to you. However, keep the following in mind and remember that it's a team effort at your end and at the Vendor's end to manage and assess your contracts.

  To bridge the gap between stories of outsourcing projects that went bad and reality, I will try and enumerate through real project examples how misunderstandings and complications occur while outsourcing legal projects. If any body else has first hand experience of mistakes that they made while outsourcing their project or during delivery of legal services, do feel free to chip in or comment on my post.

Part I - Sort your contracts in an intelligible manner

  Whether you upload your contracts to your Vendor through FTP or send them through some other manner, make sure you do not just dump them. Let me give you an example. I was part of a project where it was a tight deadline M&A project. On the first day my Client was supposed to send 12 huge contracts with a lot of attachments, amendments and addendums to it. When the files got to us, we realized they were in a complete mess. There were missing files and pages - it took a senior level resource (remember as a Client, you are going to be billed that much extra) 2 days just to figure out which file goes with which contract. It just showed us what a mess the in-house legal department was - that they didn't even have a proper filing system and did not care about their assets. They ended up paying extra for the time my senior resource took to figure it all out. The first step in managing contracts is to ensure that the files are stored according to the deal name/party name. This is of course unless you have specifically contracted with your Vendor to sort out your filing for you as well.

Posted by Pakhi Bagai at 12:34 PM | Permalink | Comments (0) | TrackBacks (0)

Posted by Kunal Kumar Kundu at 3:14 PM | Permalink | Comments (0) | TrackBacks (0)