Rio Tinto seals deal to outsource legal work to India

Rio Tinto has entered into an agreement with outsourcing provider CPA Global to offshore legal work to a team of lawyers in India.

Jersey-based CPA Global are providing a team of 12 Delhi-based lawyers to handle tasks such as contract review, drafting and legal research - in a move projected to reduce Rio Tinto's annual legal spend by 20%. The company estimates that the new India venture, which became operational on 1 May, will be seven times cheaper than its lawyers in London.

The Delhi-based team is expected to double in size within a year. Although Rio Tinto is currently going through a cost-cutting procedure which is expected to lead to significant job losses, there are no current plans to reduce headcount in the existing 100-strong global legal group. The mining giant will also continue to instruct its regular external law firms, which include Herbert Smith, Linklaters and Baker & McKenzie.

Commenting on the arrangement, Rio Tinto's managing attorney Leah Cooper said: "By shifting work to CPA Global our internal team will be freed up to get involved in some of the more complex and challenging legal matters, which in the past might have been sent to outside counsel at significant cost."

The move comes as senior in-house counsel find themselves under more pressure than ever to cut external legal costs, and follows HSBC's establishment last year of a five lawyer in-house legal pilot project in Malaysia.

Law firms are also showing themselves increasingly amenable to offshoring, with Simmons and Simmons recently announcing plans to use external lawyers in jurisdictions such as India and South Africa for certain litigation-related and corporate due diligence tasks.

CPA Global, which has a turnover of $1bn (£612m), employs 500 lawyers in India and expects to recruit further in the next year having invested $50m (£31m) on legal facilities in Delhi. It is also looking to expand into the Philippines, South Africa and New Zealand.

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