In a ground-breaking move, Rio Tinto is announcing today that it is outsourcing its legal work to India — triggering what is predicted to be an irreversible trend in the legal sector. The international mining group has concluded a deal with CPA Global, a leading outsourcing provider of legal services, and expects savings on its legal costs of up to 20 per cent.
It works like this: Rio Tinto is building a team of CPA lawyers in India who will operate, effectively, as an extension to its in-house legal department. That will free Rio Tinto lawyers to focus on more complex tasks. More ambitiously, on all assignments involving external law firms, Rio Tinto will ask these firms to pass tasks that can be done by lower cost lawyers to CPA people in India and elsewhere.
Rio Tinto has hired a team of lawyers in India to try to reduce its annual £60 million legal bill by 20 per cent. The move will send a shudder through Britain’s commercial legal market, which earns billions of pounds a year in fees from big banks and multinationals. The Anglo-Australian miner, with CPA Global, a legal outsourcing group, has recruited 12 lawyers in Delhi to work for it on tasks such as reviewing documents and drafting contracts.
The unit is expected to double in size within a year and will save the company 20 per cent of its annual legal budget, believed to be about $100 million (£61 million). Rio has 100 lawyers worldwide and uses law firms such as Linklaters and Baker & McKenzie for external advice.