Legal Process Outsourcing (LPO)

Anglo-Australian mining company Rio Tinto has outsourced part of its legal work to 12 qualified Delhi lawyers, which has already saved the company $1m (Rs 5 crore) in little more than a month.

Rio Tinto has hired the team through outsourcing company CPA Global, reported UK newspaper The Times today. Their work will include reviewing documents and drafting contacts.

Rio Tinto's managing attorney Leah Cooper told The Times: "We took a look at our internal costs and the amount we were spending on outside counsel and saw an opportunity to make significant changes."

The company hopes to save 20 per cent of its annual legal budget, which The Times estimated at $100m (Rs 480 crore), and has saved $1m since starting the project on 1 May. The legal process outsourcing drive is part of a company-wide cost-cutting initiative that will see a total of 15,000 staff lose their jobs.

UK trade magazine The Lawyer reported that the cost of a lawyer provided by CPA would be around $250 per day, which Cooper said was far less than a very junior lawyer at the big international law firms.

She explained to The Lawyer that confidentiality issues were important: "Our dedicated team sits in a branded Rio Tinto room, literally with fingerprinted access. Nobody else from CPA can get in or out, they don’t have printers."

The two UK firms working most closely with Rio Tinto are Baker & McKenzie and Linklaters, which has a best friends relationship with Talwar Thakore & Associates.

A Linklaters spokesperson told The Lawyer: "We have been discussing this with Rio Tinto for some time and are supporting them in their initiative to ensure that legal services are provided in the most efficient way practicable. We see this as something which should help to strengthen our relationship."

Baker & McKenzie Rio Tinto relationship partner Samantha Mobley added: "It's helpful for all of us because it affects the kind of area in which law firms are being pushed for value for money and it makes us more competitive when tendering for projects."

Rio Tinto's Indian team has been operating since 1 May but the company hopes to double the size within this year, reported The Times.

The paper wrote that CPA Global has a turnover of $1bn (Rs 4,800 crore) and counts Microsoft among its clients.

It hopes to grow its Delhi legal team to 500 lawyers within nine months, intending to recruit a total of 3,000 additional lawyers in similar facilities in Manila, New Zealand and South Africa.