Legal News

Her Name is Rio, She Sends Work to Foreign Lands

By Ashby Jones

Frankly, with all this talk of alternative billing arrangements here Stateside, we’d almost forgotten the degree to which firms were still relying on lawyers and others in India to perform lower-margin legal and clerical work.

Thursday, however, come signs of an interesting development. The Times of London has reported that the Anglo-Australian mining company Rio Tinto has hired a team of lawyers in India to try to reduce its annual £60 million legal bill by 20 percent. Click here for the story.

But wait, you’re saying. Why is this a big deal? Companies have been “outsourcing” work to Indian subcontractors for a while. It’s true; in fact this very newspaper chronicled the activity as far back as 2005.

But according to the Times of London, Rio Tinto is believed to be the “first big company to recruit a team of fully qualified lawyers to perform substantive legal work that otherwise would have been done by lawyers in London.” That, yes, strikes us as significant.

It doesn’t sound like the lawyers are going to be hammering out the fine points on deals or deposing witnesses, but the 12 lawyers, based in Delhi, will review documents, draft contracts, and the like.

According to the Times of London and the Lawyer, the company has used Linklaters and Baker & McKenzie, among others, as outside counsel in recent years. When reached by the Lawyer, a spokeswoman for Linklaters was focusing on the positive:

"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."

Rio Tinto estimates that its Indian team, which has operated since May 1, will be seven times cheaper than comparable lawyers in London and will hope to save the company 20 per cent of its annual legal budget, believed to be about $100 million (£61 million).

Full post as published by Law Blog - WSJ.com on June 18, 2009 (boomark / email).