The Times Online reports the move will send a shudder through Britain's commercial legal market, which earns billions of pounds a year in fees from big banks and multinationals. 

The Australian-English mining company, with legal outsourcing company CPA Global, has recruited 12 lawyers in Delhi to work on tasks such as reviewing documents and drafting contracts. In a year the unit is expected to double, and save the company 20 per cent of its annual legal budget, which commentators are estimating would be around $US100 million ($126.8 million). 

Rio's hefty legal bills come from Linklaters and Baker & McKenzie for external advice. The company has begun a shake-up of its legal department as part of its cost cutting, expected to lead to the loss of 15,000 jobs. 

Rio itself is optimistic about the change, and has claimed that its new Indian team, which has operated since 1 May, will be seven times cheaper than comparable lawyers in London. It estimates it has already saved more than $US1 million.