Covering all bases: Alliance seeks to limit Year 2000 risk Insurers, accountants, lawyers to advise on keeping computers up

September 10, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

The Year 2000 computer problem may do more harm than causing computers to crash and it may take more to fix than buying new software.

In fact, it could cause financial loss and give rise to legal liability, experts said. So, three local companies -- a law firm, an insurance firm and the local office of a financial consulting company -- yesterday announced the formation of the Year 2000 Solutions Alliance to advise businesses on how to deal with the problem.

The partners are: Riggs, Counselman, Michaels & Downes, the Towson insurance and risk management firm; PricewaterhouseCoopers, the international accounting and consulting firm; and Ober, Kaler, Grimes & Shriver, the Baltimore law firm.

Some experts estimate it may take about $600 billion to eradicate the Year 2000 problem, which has spawned a multibillion-dollar consulting industry.

"In the outgrowth of our own efforts at Y2K compliance, we realized there were many more risks and exposures that became self-evident," said Thomas Healy, the executive vice president and chief operating officer of RCM&D.

"Everyone talks about the problem as if a business can just buy a new software package and fix everything. Y2K issues are much broader," said Steven J. Fox, the chairman of Ober, Kaler's information systems and technology group practice.

"Y2K affects all businesses in a way they haven't even thought about," he said.

The Year 2000 problem is the result of much of the world's computer software, and even some hardware, being designed so that years are recorded by their final two digits, or "fields."

When the clock strikes 12: 01 a.m. on Jan. 1, 2000, those fields will read "00" and be interpreted as 1900 instead of 2000, imperiling recordkeeping.

In the meantime, there are issues businesses must first tend to, Fox said. For example, there are a flurry of Y2K "certification letters" passing from company to company detailing their progress in dealing with theproblem. Businesses are requesting these letters to make sure their vendors are able to supply them with products Jan. 1, 2000, Fox said.

"By not analyzing that letter carefully, a company opens itself up to great liability" if it can't meet its obligations because of Y2K computer problems, he said.

And then there are simpler tasks, such as making sure that contracts with Y2K consultants specify that the experts are able to complete the work in time, he said.

RCM&D officials thought of the alliance and approached PricewaterhouseCoopers and Ober, Kaler, said Healy.

Ober, Kaler is the insurance company's corporate counsel, and PricewaterhouseCoopers is its financial consultant. "It made sense to create an alliance among friends," Healy said.

The three partners in the Year 2000 Solutions Alliance do not share fees, Healy explained, but serve as a referral point for one another.

Pub Date: 9/10/98

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