LPO Destination: Philippines*

Globalization is a policy, not an act of God.

– Jimmy Carter

Globalization, ushered in by falling costs of telecommunications, has led to the disaggregation or “unbundling” of traditional functions of companies into workable units of business processes, and its distribution to those capable of performing it most efficiently, without regard to national borders. Beyond the outsourcing boom in the industrial, manufacturing, and technology sectors, there is a growing trend in the outsourcing of knowledge. In this area, Legal Process Outsourcing (LPO) is currently the fastest growing sub-sector.

In 2009, the Philippines received the Best Offshoring Destination of the Year Award from the United Kingdom’s National Outsourcing Association. The Philippines is also considered as one of the largest English-speaking nations with a strong orientation in information technology and a sizeable talent pool. Arguably, no other LPO destination country can boast of closer cultural, legal and educational similarities with the United States than the Philippines. Moreover, the number of Philippine lawyers who sit for and pass U.S. bar examinations gives the Philippines an advantage over any other LPO destination.

The feasibility of LPO in the Philippines, however, does not automatically translate to the viability of LPO as an alternative area of practice among Philippine lawyers. Philippine lawyers cannot simply jump onto the LPO bandwagon without considering the pervading ethical issues Specifically, LPO entails a radically different perspective from the current regulatory framework of the legal profession in the Philippines. Whereas the current framework in regulating the practice of law considers four important relationships – lawyer and society, lawyer and courts, lawyer and client, and lawyers and other lawyers[1] – LPO as an area of practice focuses on entirely different aspects of relationships created by delegation and outsourcing. LPO mirrors the new paradigm in which the legal profession is no longer seen as a unique profession entitled to differentiation, but is part of a larger group of “service providers,” all of whom can be regulated in one regulatory regime. As Terry correctly observes, this new paradigm reflects “a fundamental, seismic shift in the approach towards lawyer regulation.”[2]

In the Philippine context, for instance, the legal profession has always been characterized according to the following criteria: 1) A duty of public service, of which the emolument is a by-product, and in which one may attain the highest eminence without making much money; 2) A relation as an “officer of court” to the administration of justice involving thorough sincerity integrity and reliability; 3) A relation to clients in the highest degree fiduciary; and 4) A relation to colleagues at the Bar characterized by candor, fairness, and unwillingness to resort to current business methods of advertising and encroachment on their practice, or dealing directly with their clients.[3] Thus, in the debate between “profession” versus “business,” the Philippines has always taken the side of “profession,” under the fundamental premise that membership in the bar is a privilege burdened with conditions and carries with it the responsibility to live up to its exacting standards and honored traditions.[4]

On the other hand, the paradigm of lawyers as “service providers” adopts a regulatory framework which will probably subject lawyer regulations to a benchmarking that cuts across national borders as well as other professions.[5] This has far-reaching implications on the issue of regulation of legal services in the context of trade.

A legal and ethical framework for LPO should function both as a way of regulating LPO activities in the Philippines, and a device for fostering a legal environment conducive for its entry to the Philippines. The paradigm of lawyers as “service providers” forces the Philippines to rethink the way it presently regulates the practice of law, and to consider other possibilities consistent with globalization, a process in which the Philippines have become inexorably and irreversibly involved in over the past decade.

Meanwhile, inasmuch as present LPO activities continue unregulated, it has been argued that traditional rules of professional conduct and principles of tort liability will not prevent outsourcing, although these may well render it less efficient.[6] This proposition poses certain challenges in the attempt to develop a legal and ethical framework for LPO. However, it would also seem that the emerging paradigm of lawyers as “service providers” does not, in any way, limit the possibilities for regulating LPO; rather, it redefines the approach towards its regulation, one that considers the similarities between the legal profession and other services that are capable of being traded in the global market, as well as the unique complexities and characteristics that continue to be relevant in the legal profession.

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*Excerpt from my own working paper.

[1] R. Agpalo, Comments on the Code of Professional Responsibility and the Code of Judicial Conduct (2004).

[2] L. Terry, The Future Regulation of the Legal Profession: The Impact of Treating the Legal Professions as “Service Providers,” 2008 J. PROF. L. 189 (2008)

[3] In re: Authority to Continue Use of Firm Name, 92 SCRA 1 (1979)

[4] R. Agpalo, supra note 1 at 3, citing Ledesma v. Climaco, 57 SCRA 473 (1974).

[5] L. Terry, supra note 2 at 206.

[6] M. Daly and C. Silver, Flattening the World of Legal Services? The Ethical and Liability Minefields of Offshoring Legal and Law-Related Services. 38 GEO. J. INT’L L. 401, 447 (2007).

Salma F. Angkaya

Entry #9

Ground Zero of the Tech World

The tech world has its very own Mecca and its name is Silicon Valley. Google, Apple, Yahoo, and many other high-tech companies trace their roots to this single place which, for purposes of this article, I’d like to call the tech world’s very own ‘Ground Zero.’ From cramped apartments bordering the illustrious Stanford University - a school which seems to have single-handedly jumpstarted innovation in the IT world - have emerged countless “from rags to riches (and vice-versa)" stories that have driven, and continues to drive, what we now know as the Information Age.

Whether by actual design, accident, or a combination of both, the Valley has become the epicenter of all things techie. As testament to this sentiment, the idiom “imitation is the sincerest form of flattery” finds application when observing Israel and India’s attempts to replicate the phenomenon within their respective regions. Bearing this in mind, the question I pose is optimistic rather than critical: instead of merely focusing on ‘business process outsourcing’ in countless call center hubs spread out around the archipelago, can we, as a matter of sound national policy, delegate a portion of our resources to funding and promoting a centralized IT hotspot? Our own version of Ground Zero?

Incentivizing local governments to promote IT centers is one thing but dedicating a central station (let’s say in some fly-speck, randomly-thought-of, mid-ranged province like Leyte) that can host the regional headquarters of various companies can go a long way in competing with the likes of Singapore, Hong Kong and perhaps even China. Placing the operations of chip and hardware manufacturers, software developers and computer programmers in one singular hub, supplementing this area with centers of learning and outlet stores and perhaps making the same a tourist destination for IT-inclined individuals can spur economic growth for the entire region that already boasts of obvious logistical advantages: cheap labor, easy access for in-land, sea, and air transportation, as well as being a stone throw’s away from places like Bohol, Cebu, and Mindanao.

More importantly, aside from jumpstarting the economy, I think that the creation of Ground Zero will enable the formation of a community - heavily influenced by the academe in the way of Stanford and San Jose State - that might just change the way we do business and the way we view things. Thus, instead of looking forward to our next paycheck, maybe we can start looking for the next big idea. Instead of settling for what other countries dish out, maybe we can come out with our own contribution to the IT world. Instead of going to yonder ‘land of the brave’ to visit and live in fabled ‘tech Mecca,’ maybe we should start thinking of building our own.

A site I used to contribute articles to has as its caption the phrase: “where bright minds meet.” Perhaps I can borrow the phrase as a premise for possible effects of physically carving out an environment for a tech-oriented culture instead of waiting for it to accidentally happen: “where bright minds meet, anything, everything becomes possible... even in the Philippines.”

Crunch Time for BPO

In my last week's blog entry, I talked about the rise of the BPO industry in our country, the benefits that it brings, as well as its bad effects. I was browsing for news earlier when I came across a news article regarding the BPO industry. I was a bit surprised that this news article somehow confirmed my fears. If you would ask me why I was so fixated with this topic, it is because I was also BPO employee, although not as a call center agent, before I entered law school.

The government must really do something about this before it gets worse.

Below is the full text of the news article from Inquirer.net that I am talking about:



‘Crunch taking toll on BPO workers’ health’

By Jerome Aning
Philippine Daily Inquirer
First Posted 20:11:00 03/18/2009



MANILA, Philippines – A labor study group warned Wednesday that occupational health risks in the outsourcing industry are likely to increase after the Business Processing Association of the Philippines (BPAP) said companies are scaling down growth targets and hiring of new personnel, if not already laying off some.

The Quezon City-based Ecumenical Institute for Labor Education and Research (EILER) said BPO firms that shed staff tend to overwork their remaining employees.

“It has come to our attention that some outsourcing companies are already employing reduced workforce[s] while encouraging multitasking and additional unpaid work hours, which will further distress the health of the employees,” EILER deputy executive director Anna Leah Escresa-Colina said in a statement sent to the Philippine Daily Inquirer (parent company of INQUIRER.net).

She said last year, EILER undertook a research on call centers servicing the airline, railway, bus, cruise ship/ferry industries, and logistics, goods and transport industries.

The research, she said, found out that the occupational health risks from graveyard shifts, long working hours, very cool temperatures in work places, and high work stress due to high quotas are very serious and potentially life-threatening.

Most of the respondents, according to Colina, experienced sleeping problems, eye strain, overall fatigue, headaches, chest and back pains, voice problems and mental stress. Other health hazards were work stress, work time, and irrational behavior of customers.

“Despite such high occupational health risks in call centers, clinical services are found to be wanting especially during graveyard shifts,” she added, recalling that in 2007, a stress-induced death of a call center agent was reported in the media.

Colina also found fault in BPAP’s statement that it was still possible to earn $13 billion in revenues as indicated by the so-called BPO Roadmap 2010.

“But to be able to reach this revenue target, the right of BPO employees to organize will be effectively suppressed as only organized employees can comprehensively advance their concerns on health and safety, career paths and development, skills development, their social life, savings for their future and long-term occupation security,” she explained.

The EILER official said the BPO industry is virtually union-free because organizing in the sector is said to be covertly and overtly discouraged by the management.

EILER also said that the Department of Labor and Employment’s new Guidelines on Flexible Work Arrangements which encouraged establishments to impose forced leaves, overtime without pay, shift reduction, rotation, compressed work week and other practices could undermine the rights of workers of in other industries as well.



Raymond Roque
06-78143

BPO

The passage of the E-commerce Act in year 2000 marks the commencement of the meteoric rise in the Philippines of a major industry related to ICT. This is the Business Process Outsourcing industry comprises several “sub-industries” such as call centers, medical transcription, legal process outsourcing, web development and back-office outsourcing.

I remember during this time, many call center companies have sprouted in the business districts of Makati, Ortigas and Libis in QC which were renowned for massive recruitment of workers usually those who were fresh from college. Many workers were attracted to these jobs because of the highly competitive compensation package that awaits the successful applicant. Some call center companies even gave signing bonuses for the new hires. Moreover, most companies have very brief hiring procedures that take only a day or two, i.e., from the time the applicant submitted his/her resume up to the time that he/she signs the employment contract.

Be that as it may, there is also a bad side to this story. Even though these companies attracted workers by hordes, they also suffered high attrition rates. This fact may be attributed to the peculiar working schedules in these companies. Almost all call center companies operate 24/7 which means that some employees will be assigned to work from 10 o’ clock in the evening up to 6 o’ clock in the morning. This is necessary because they need to approximate the working hours in western countries particularly the US where most of their client companies are located. Many call center employees cannot stand the difficulty of working in the wee hours that some of them got burned out while other got hospitalized. These are some of the hidden risks that come with working in call center companies.

I know this for a fact because just last month, my 24-year old neighbor-friend was rushed to the hospital because she suffered a mild stroke while working at 2:30 in the morning. She was assigned in the 10pm-6am shift for 3 and a half months straight prior to the incident. Luckily, my friend was able to recover but the doctor strongly advised her not to work in evening shifts anymore. But how could she possibly do that? She could only heed that advice if either the company allows her to change shifts or find another job. The second option is next to impossible at this point in time when finding a decent job may be likened to finding a needle in a haystack.


Raymond Roque
06-78143