From Rio to Delhi

Rio Tinto’s managing attorney Leah Cooper tells Alex Aldridge about the mining giant’s thinking behind the recent headline-grabbing tie-up with outsourcing provider CPA Global

Last week Rio Tinto announced a tie-up with legal outsourcing provider CPA Global, which will see it send out legal work to a 12-strong team of lawyers based in India – an arrangement which the mining giant claims will reduce its approximately £60m annual legal bill by 20%. The Indian lawyers, who have been operating in a separate ‘Rio-Tinto room’ in CPA’s Delhi offices since last month, are handling tasks including legal research, document review and contract drafting.

The move has largely been driven by Rio Tinto managing attorney Leah Cooper, who is responsible for managing the company’s global legal budget. Since moving to London from Rio’s US hub in Salt Lake City to take up the role a year ago, Cooper has found herself under pressure to cut external spend and bring more work in-house. And after becoming familiarised with legal process outsourcing during her time as senior corporate counsel at AGL Resources in Atlanta (where she conducted a pilot programme into its viability), she says that it was something she knew she had to look at in her new position.

“Of course, I’d have much preferred if a law firm had come to me and said, ‘Hey, we’ve just entered into an arrangement with a low cost provider that’s going to save you money,’” she adds. “But that didn’t happen.” While several law firms – including Eversheds, Lovells and Clifford Chance – have entered into outsourcing arrangements, they have mostly focused on basic litigation-related tasks, rather than what Rio and CPA argue will be more complex corporate work.

Cooper describes the work as “at the basic end of substantive”, giving an example of a typical task: using old agreements to draft a new template which the Rio lawyer could then use to carry out a more complex piece of work.

The process of setting up the deal with CPA began in November with a due diligence exercise into the viability of the project. After establishing that CPA’s Indian lawyers cost between five and seven times less than employing solicitors in London, Cooper decided to give the venture the go-ahead. During the last month and a half, the new arrangement has rolled out gradually across Rio’s offices worldwide, with the company’s US, European and Australian lawyers receiving training on the processes involved in sending out work to the team in Delhi. Cooper says that she expects all of the company’s 100 lawyers to be up to speed by the end of the month.

“Since this thing went live it’s been a full-time job for me,” she says. “For it to work, we’re under no illusions that we have to invest a lot of time in it, and at the beginning that obviously means working out a few kinks.” Critics of legal outsourcing suggest it is these kinks that will ultimately undermine the long term viability of such projects, as the hassle factor – and its associated costs – outweighs the much vaunted potential savings.

But Cooper, who admits to feeling “some pressure” as the brains behind the project, dismisses these concerns: “Really it’s no different from sending work out to a junior associate and them coming back to you to ask the occasional question.” She adds that her main focus is ensuring that the quality of the work done by CPA is up to scratch: “That’s the big thing for us. For every assignment we send out, CPA do a quality score and then we do a customer satisfaction score. I then look at how closely those two things are aligned,” she says.

Potentially more tricky is the second strand of the Rio legal outsourcing plan: getting external law firms to pass tasks typically done by junior associates and paralegals onto the CPA team in India.

“But it’s working,” insists Cooper, giving the example of Linklaters’ positive reaction to the CPA tie-up. “Recently they came to me with a nine-to-12 month project that basically involved a weekly assignment, and they said: ‘I bet your team in India can do that’. Then they actually went and trained the Indian lawyers on how to do it.”

Rio’s forthcoming panel review – shrewdly set by Cooper for the fourth quarter of this year – may have something to do with firms’ enthusiasm to engage with the CPA team. What happens when this is complete, though? Isn’t expecting firms to continue cheerily passing on work as unrealistic as asking Sainsbury’s staff to keep smiles on their faces while instructing customers on how to use self-checkouts?

“Look,” says Cooper, “we’ll always need firms to deliver strategic legal advice, no question. We rely on it, and we need it. What we don’t need is to pay hundreds of pounds for something that shouldn’t cost that much. And until firms fix their cost structures, we have no choice but to go elsewhere.”

Of course, law firms aren’t the only organisations forced to consider their cost structures at the moment – indeed, Rio announced in December that it would be shedding 14,500 jobs worldwide. Should its lawyers be concerned that the CPA deal could see them out of a job?

“Any good business makes sure its legal team is aligned with the company’s overall needs, but we will not cut legal jobs as a result of outsourcing,” responds Cooper. “The team in India is there to support, not to replace.”

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About CPA Global

CPA Global was founded in 1969 by a group of British patent attorneys as an intellectual property renewals service. The company expanded into outsourcing in 2005, with the acquisition of intellectual property support company Foundation IP and the purchase of a controlling stake in Intellevate.

In 2007, CPA opened new offices in Noida, a business district in New Delhi, announcing an ongoing investment of $50m (£31.25m) into India over the next five years to provide legal support services.

About half of CPA’s legal clients are corporations; the other 50% are law firms, including Eversheds and Clifford Chance. The company says it is close to signing legal outsourcing deals with two other major companies – both of which would follow the model established with Rio Tinto.

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