Outsourcing is the contracting out of a company’s non-core, non-revenue producing activities to specialists. It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best – its core competencies. Two common types of outsourcing are Information Technology (IT) outsourcing and Business Process Outsourcing (BPO). BPO includes outsourcing related to accounting, human resources, benefits, payroll, and finance functions and activities. Knowledge Process outsourcing (KPO) includes outsourcing related to legal, paralegal, and other highly skilled activities. A good outsourcing agreement is one which provides a comprehensive road map of the duties and obligations of both the parties – outsourcer and service provider. It minimizes complications when a dispute arise. However, many a times people neglect to pay attention while drafting an outsourcing agreement. A properly drafted Outsourcing Agreement saves a lot of problems later on. Lawyers who understanding the work culture and legal environment of both the jurisdictions should be involved in drafting Outsourcing Agreements. _____****_____ Before finalizing an outsourcing agreement, the terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. Lawyers from all applicable jurisdictions must be consulted before finalizing any outsourcing agreement.