Why is the arrangement with CPA [Rio's LPO partner] so significant? Primarily because it is evidence of a profound change in the legal world. In-house lawyers are under great pressure to reduce their head count and to spend less on external law firms, but, at the same time, their workload is increasing. Clients, in short, need their advisers to provide more-for-less.
As we have noted previously, "more-for-less" cannot be achieved by focusing purely on hourly rates. Susskind agrees and posits that offshoring will provide one of many alternative approaches, another being "computerisation, using tools such as automatic document drafting and workflow technology."
Rio Tinto has made it clear that it really does want change. Whether you're in-house or in a law firm, you've got to decide whether this is a one-off or the start of a trend.
If it's the latter, you better work out what it means for you and how you're going to respond.