FCPA Compliance and Ethics Blog

August 18, 2014

How Can Global Corporations Afford (or Afford Not) To Employ Professional Language Solution Providers

Jay RosenEd Note-I recently asked Jay Rosen, Vice President, Language Solutions at Merrill Brink International, if he could help me understand how to think through the the hiring of a language service provider. He graciously wrote the following post.

It seems like a daily occurrence that news organizations and blogs (this one included) report that global corporation XYZ, Inc. has run afoul of FCPA statutes somewhere in the world. The next few paragraphs will recount the jurisdiction where the alleged infraction has occurred and if known at this juncture, the details of the bribery scheme. At this point, if you are well read on this subject, the rest of the article plays out by rote.

Let’s hit the pause button and rewind this story to the beginning. How did XYZ, Inc. get into this position and what steps could have been taken to better communicate the Company’s ethics and compliance policies and procedures to its global employee base? While this would certainly not prevent a rogue employee(s) from committing these alleged infractions, professionally translated and localized ethics and compliance communications provide a proactive solution to insulate global companies from similar situations.

The question of whether or not to engage a professional Language Solutions Provider (LSP), read translation company, usually is driven by the following factors:

  • Cost/Quality
  • Confidentially
  • Change
  1. If I can afford an LSP, how do I choose among the ones out there for quality?

The first thing to cover here is how are translations priced?

Translations are completed on an outsourced basis by professionally educated, qualified, and selected linguistic resources. It is important to note that the industry standard is to bill on a per word basis (e.g. X number of words at Y cents per word). This pricing model will become glaringly apparent when Corporations look at alternative methods to translate documents in-house with an eye to saving money.

Proposed Internal Translation Solutions

Here are several ideas that are usually considered in lieu of engaging professional translation resources:

  • Becky down the hall speaks French
  • We can use someone in our Paris Office
  • The Forensic accountant working with us in Beijing

On first blush the three suggestions above all seem like good ideas that will potentially save money and lead to quality results. Unfortunately these three courses of action fall short by:

  • Not providing the necessary quality ensured by professional translation resources
  • End up costing the client both opportunity costs and greater total translation costs and
  • Do nothing to mitigate the risk of not having an independent outsourced LSP translating (and certifying) your documents (if necessary).

Becky down the hall speaks French

Although Becky does speak French, she has other duties in the organization that must be put aside for her to work on translating documents. Should this project take 3 – 4 hours and if Becky has a bill rate of $400/hour, this solution ends up wasting precious time and costing the end client ~ $1,600 instead of the a few hundred dollars to professionally produce an accurate translation.

We can use someone in our Paris office

As in the example above, this option also creates lost opportunity cost and further taxes billable resources in another time zone. This would require the company to utilize internal resources and having to deal with colleagues not under their direct local control and working in various global markets.

The forensic accountant working with us in Beijing

In this case, we have someone working far out of their core expertise and comfort zone – forensics – and having to wear the hat of a professional translator. Price also comes into play as these forensic resources start billing around $250/hour and could be higher.

Bottom line, what initially appears to be a viable and cost effective solution, ends up sacrificing quality, escalating costs and potentially increasing risk by internally generating substandard translations.

  1. If I use an LSP, how do I ensure confidentiality of the information contained in my documents? 

Confidentiality, especially in the FCPA arena, is a valid concern and must be considered when engaging a qualified LSP. Professional LSPs will require their linguists to sign a Confidentiality or Non-Disclosure Agreement. This agreement will be on file with the LSP and a copy of the agreement can easily be shared.

In terms of global data privacy restrictions, it is good to discuss this in advance with the LSP and depending on what jurisdiction your matter is based in, evaluate the LSP’s experience and comfort level in handling data privacy concerns.

In terms of looking at the individual linguists, a professional LSP will hire translators with the following credentials:

  • Minimum 4 year college degree
  • Subject Matter Expertise (SME)
  • Additional testing by the LSP

These three areas serve to validate the choice of an independent LSP as the translators employed will meet the minimum of a 4 year degree and quite often will have post-graduate or professional degrees such as JD’s or PhD’s. Furthermore, LSPs can provide Subject Matter Experts (SMEs) with specific sector knowledge such as IP/patents, cross-border litigation or FCPA, ethics and compliance experience. Finally the additional testing required by LSPs ensures that clients are receiving top-notch and best of breed translation solutions.

  1. How do I risk disrupting the status quo to change my current translation/localization workflow?

So far we have covered two out of three issues to consider in the choice of whether or not to engage an outsourced LSP.

  • Cost/Quality
  • Confidentiality

And finally we will look at another “C” – Change. While this may not initially be perceived as an important factor, this often affects whether an organization decides to employ an outsourced LSP. From a global perspective it is imperative that a Code of Business Conduct and a Company’s policies and procedures are accurately translated from the English source document to the multiple localized versions for global employees.

If in the past this decision has been left to local in-country resources, it may have unintentionally altered or subverted the meaning of the source English language policies and could have potentially created confusion as to the meaning and global reach of a Company’s business policies.

Additional pushback may emanate from current in-country LSPs who have provided these services in the past.   While it makes sense to encourage local buy-in to your Company’s policies and procedures, this can be ensured by asking local ethics and compliance leaders to participate in the translation review process.

By carefully considering cost/quality, confidentiality and change, a global organization can properly assess the impact that hiring a qualified LSP will have on their risk exposure and better position such organizations to quickly react to a changing global investigative and regulatory environment.

Jay Rosen (jay.rosen@merrillcorp.com) is a Vice President, Language Solutions at Merrill Brink International, based in Los Angeles. For further information, please see his article on Translation considerations for global internal investigations, ethics and compliance matters.

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