Predictions 2010: Thirteenth Post

January 10, 2010

Overall, we look to be in for another difficult year, with little in the way of light at the end of the tunnel. 2009 was a year of contrasts in the IT/outsourcing legal world, with the brakes applied abruptly across the marketplace at end Q1. The public sector has essentially withdrawn from the contracting market due to cut-backs, while the private sector has kept its wallet in its pocket until it sees clearly which way the wind is blowing. For the IT/outsourcing lawyer, a market without significant public sector instruction is bound to be a slow market.

A trend which began in the latter half of 2009 should continue into 2010, whereby any contract with a long-term supply relationship is reviewed. That applies to most large scale IT/outsourcing transactions. Here some of the facts uncovered are extraordinary, with miscalculation of indexation, or calculation without contractual basis, a recurring theme. Some of this activity spills over into the dispute area.

A general move in 2010 towards flexibility in contracting, or to use management type speak, ‘commercial agility‘. This is a drum which I have been banging for some time now with little visible uptake, but it does seem to be gathering steam amongst commentators. Certainly, for the larger deals and, especially, in the outsourcing market, it would seem at this stage to be a virtual necessity. What business or public sector administrative function can confidently predict where it will be this time next year? Contracting should follow this lack of certainty.

A general increase in public outrage over security breaches fed by an ever growing number of breaches. In Ireland we have had our fair share of high profile breaches and there would seem to be little evidence that this trend will do anything but continue. Once customers begin to focus on the safe-keeping of their data as an area of particular risk, it will lead to serious confrontation with a number of the larger IT/outsourcing suppliers, none of whom are particularly keen on assuming commercial risk in the area, with one of the large suppliers having as a doctrine of faith that they do not accept liability for loss/damage relating to data. Knocking them off this particular perch is a time-consuming and acrimonious task, which not all customers succeed in achieving.

Overall, a grim prediction for 2010, but we should all realise by now that the tunnel in which we find ourselves is indeed long and dark, with only a faint glimmer of light in the distance. We can of course cheer ourselves up in time honoured fashion by going to the movies. I believe the adaptation of Cormac MacCarthy post-apocalyptic epic ‘The Road’ is due out shortly