By Karen Sanzaro, Partner, Hunton & Williams LLP

With many buyer companies on their second or third outsourcing deals, the current generation of outsourcing has been dubbed: Outsourcing 2.0. However, many aspects of outsourcing agreements have not matured over time including legal provisions. Legal terms are just one of many components that need to be reviewed every few years to determine if they are still "in-market." If the opportunity arises and you can open the outsourcing contract, every effort should be made to renegotiate specific provisions as the consequences to the buyer company could be devastating.

For some of the most beleaguered industries such as retail and financial services, the U.S. economy has begun to slightly turn for the better. However, not every market is back on a positive note with unemployment hovering just below 10%. In economic times such as these, many companies who outsourced in the last few years look for ways to squeeze more out of their provider agreement. Oftentimes, additional cost savings is the primary objective but there are more reasons to renegotiate than the obvious financial benefits.

Outsourcing contracts that were penned over 3 years ago most likely have provisions that are "out-of-market" compared to what is being negotiated today. Acts of terrorism, data security breaches, geo-political risks and corporate malpractice (i.e., Satyam) are much more prevalent than ever before. In a study of Information Technology outsourcing buyers conducted by OutsourcingLeadership.com, 57% stated they "planned to renegotiate their contract."

If the opportunity arises, here are a few reasons, from a legal perspective, why you should consider renegotiating your outsourcing contract.