In June 2009, Rio Tinto, a leading international mining group headquartered in the UK entered a legal services outsourcing agreement with CPA Global. Under the agreement, CPA Global will provide a team of lawyers in India to support Rio Tinto's in-house legal function on a global basis. ValueNotes spoke to Ms. Leah Cooper to understand the challenges that Rio Tinto faced prior to and after outsourcing.

ValueNotes: Rio Tinto offshored LPO services to CPA Global in 2009. How has been your experience in handling vendor relationships? What were the challenges? What are the challenges now?

Leah Cooper: One of the reasons we considered outsourcing/offshoring is because we were quite stretched. Given the slowdown in the economy last year, it was too costly to build internal teams. Outsourcing can supplement our in-house team.

CPA Global had the capabilities to address our needs. We initially asked the CPA team to provide legal support such as drafting of contracts, M&A due diligence. These tasks were well above typical process driven LPO work. In time, we realized that we needed a team we required. We had to then set up another team with more experience in the field.

Some other challenges included training internal team and internal communication. It was more like addressing change management. Some of the lawyers felt that their work was more bespoke and probably could not be outsourced. We had to talk them into considering and exploring outsourcing. We told the in-house lawyers to look at it as outsourcing a piece of their work and not end-to-end. For instance, if there is a large contract drafting work, then consider sending a portion of it or the initial researching to the offshore team. This concept was new to everybody. Hence, it was a challenge for us to make the team understand and accept it.

Unlike a BPO set up which is more process oriented, our work is not very process driven. This made quality checks also a bit difficult initially. However, now we have sketched out a plan to monitor processes. After every project we do a customer satisfaction survey for the lawyer for whom the work has been done. This provides an instant feedback to us as well as the vendor. I get a report from the lawyer grading the vendor on a scale of 1 to 10. If the score is below 7, then I need to know the reason for it. If the score is below 5, then I definitely need to know the reason, what happened and what went wrong.

ValueNotes: What are the services that you outsource currently? Will the list expand?

Leah Cooper: We have about 100 lawyers worldwide. A team of 18 people from CPA Global work for us. We do all kinds legal work and use multiple law firms for different types of work. We outsource contract review and drafting, legal research, M&A due diligence, transaction diligence, compliance work and document review, etc.

The list will expand. Yes, absolutely! Initially, the work undertaken by CPA Global included contract review and drafting, legal research, and document review. However, the scope of work is expected to expand to cover other routine legal services work. We are looking at each area to try and figure out what can be outsourced. We are looking at more transaction diligence, compliance work and more on legislative type of work to be outsourced in the near future.

ValueNotes: There is fear amongst law firms that LPOs are eating into their business. Do you think LPOs can replace law firms?

Leah Cooper: LPOs cannot replace law firms. And we don’t want them to replace law firms. They can be used to support the law firms.

ValueNotes: How much of the work from Rio Tinto’s legal and compliance department can be offshored?

Leah Cooper: It is difficult to put a number or give a percent to this. But a lot of what is being done by junior associates can be offshored.

ValueNotes: Is cost the only reason to offshore?

Leah Cooper: Cost was an issue but not the only issue to consider offshoring. We contracted CPA in May 2009. Since then, we have saved US$13.9 million. However, the main reason to offshore was the increasing work load. There was a point when the in-house lawyers were inundated with work and we thought that contracting an offshore service provider will help them reduce their workload.

ValueNotes: Over the last two years, offshoring of legal work has been seeing greater acceptance in many markets. The market is witnessing increasing quality of service delivery and significant cost-economics. In your opinion, by 2009-10, what would be the extent of offshoring of the legal function of large companies?

Leah Cooper: I believe that offshoring will continue to grow. More and more general counsels are looking at the offshore option. Law firms are also gradually opening up to the idea of offshoring.

ValueNotes: Are you happy with your decision to outsource?

Leah Cooper: Yes

ValueNotes: Did you consider setting up a captive offshore center before contracting a third party service provider?

Leah Cooper: We did consider the option of captive but very quickly realize that it is better to outsource it to a third party provider. The amount of investments, time and effort required for setting up a captive is huge. Since there was an option already to contract to a capable third party service provider, we decided not to duplicate the efforts.

ValueNotes: What are the important parameters for selecting an offshore service provider? How did you go about selecting CPA Global?

Leah Cooper: We short-listed vendors and did a due diligence on about eight vendors before selecting CPA Global. We primarily looked at capability/ skill; established business (while CPA was essentially into IP services, the management team made significant investments in LPO and were committed); multi-shore presence. CPA matched our footprint. They have a presence in India, US, UK, Australia.

Note: At the time of the interview, Ms. Cooper was still the Managing attorney at Rio Tinto. She has now joined CPA Global.

About Ms. Leah Cooper:

Ms. Cooper is responsible for the overall management of Rio Tinto’s multinational legal department comprised of over 100 lawyers. She also serves as General Counsel for EMEA. Prior to this role, Ms. Cooper served as Vice President and General Counsel for Rio Tinto Minerals, a subsidiary of Rio Tinto in Denver. Previously, she worked in both the energy and telecommunications sectors at AGL Resources and BellSouth respectively, where she specialized in technology licensing, intellectual property and privacy and data protection.

Prior to her move to Rio Tinto, Ms. Cooper was instrumental in founding the Pro Bon Partnership in Atlanta; a non-profit designed to provide free legal services to other charitable non-profit organizations.

Ms. Cooper received her Bachelor of Arts degree in Journalism from the University of Georgia, a Master of Arts in Communications Law from the University of Florida, and her law degree from the Fredric G. Levin College of Law at the University of Florida. She is a member of the Florida Bar.