Rio Tinto to slash legal costs by 20%

In an effort to reduce it’s annual legal bill by 20% (or around US$20M), Rio Tinto is outsourcing legal work to India. According to The Times, the work will include “tasks such as reviewing documents and drafting contracts.”

Targeting expensive lawyers

Rio estimates that its Indian operation “will be seven times cheaper than comparable lawyers in London.” Rio’s legal process outsourcing partner, CPA Global, “provided us with fresh thinking about how to unlock real savings on our legal costs without altering the level of service we offered our internal clients,” said Leah Cooper, Rio’s managing attorney.

The test will be whether Rio can actually maintain current service levels after transferring their processes to India.

Other benefits

“As more of our standard legal work is filtered though to CPA Global, we will have more time to lift our heads up from the day-to-day reactive delivery of legal services and focus on being more proactive,” said Cooper.

Where to next?

If the offshoring really enables Rio’s lawyers to focus on being more proactive, it could open up other opportunities. For example, it may just give Rio’s lawyers the bandwidth they need to look at improving service delivery, rather than simply maintaining it.

Now, as we’ve previously noted, the only way to do that without increasing costs is through innovation. And increasing productivity by transforming and automating your business processes is not easy. It takes a big commitment of time and effort from subject matter experts and other skilled employees.

However, the good news is that success results in valuable competitive advantage that’s difficult to replicate. Which means that, at the very least, you owe it to your clients and shareholders to investigate the business case for taking service delivery to the next level.

So, what are you waiting for?

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