While consultants endlessly hypothesize about new models of legal staffing, Rio Tinto is busy forging one.
Since late April, the Anglo-Australian mining giant has contracted with a dozen fully dedicated attorneys in India employed by the legal process outsourcer CPA Global. CPA's team completed 58 projects, or about one a day, in its two first full months on the job, according to Rio managing attorney Leah Cooper.
This was not premium work, but neither was it cookie-cutter. The Indian attorneys reviewed contracts in connection with the $1.2 billion spinoff of Rio's U.S. packaging business, and produced documents for the Federal Trade Commission in connection with the $761 million sale of a Wyoming coal mine. "In any deal there will always be some component that can go to India," says Cooper.
Rio Tinto has had no shortage of big deals, or threats thereof, to generate legal work at every level of complexity. In the past two years it has, in round numbers, completed the $40 billion takeover of Alcan, fended off a $135 billion hostile overture by BHP-Billiton, abandoned a $20 billion investment by Chinalco, issued $15 billion in new equity, and agreed to a BHP joint venture with projected synergies of $10 billion. This was a boon to its main corporate counsel, Linklaters and Allens Arthur Robinson. More to the point, it over-taxed Rio's 100-lawyer strong in-house department.
"For a company the size of Rio Tinto, 100 lawyers is not that many," says Cooper. "We don't have a mass of worker bees."
Cooper rose to her current position in the midst of BHP's unwanted approach, in July 2008. She and her colleagues hatched the outsourcing plan as a way to get low-value work off the plate of their in-house attorneys, without new hiring.
But "it quickly became apparent that the real savings were with outside law firms," Cooper says. Merely staffing an FTC document production with CPA Global rather than the contract attorneys used by Rio's Washington antitrust counsel, Crowell & Moring, saved $1.5 million, or more than half the price. At face value, Cooper estimates, her Indian staff attorneys deliver work at one-third the price of her in-house lawyers, and one-seventh the price of her outside counsel.
"My phone has been ringing off the hook," she says. "I think other corporates are going to follow."
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.
