In a recent blog I asked why the legal industry was sizing up outsourcing to foreign countries such as India when, in the UK at least, the market has failed to effectively utilise lower-cost regional centres. It seems to be one extreme or the other – either you can hire the most expensive lawyers in the world, or go halfway around the globe to instruct, if not quite the cheapest, then not far off. Fair enough if the numbers add up, but what about the options in the middle?

Looking at Rio Tinto's recent offshore venture, I'm still struck by the willingness to send work out to companies with a comparably short-track record in legal. You can't imagine a panel review where a law firm with such a thin CV would get their foot in the door – indeed that was the rationale by many clients for not instructing smaller regional firms for low-value work when such practices first attempted to give the City elite a run for their money. Yet call yourself an LPO and apparently it's OK.

And looking at some of these deals, it's hard to see how the kind of cost savings that are being discussed can be delivered, especially as most of this stuff is at the margins. The Rio Tinto deal talks about a 20% cost saving – a multi-million figure for a major corporate that spends around £60m. I could understand that if Rio Tinto's partner, CPA Global, was fielding 50 to 100 lawyers on the project, but they are using 12. Since you could hire 12 junior associates from top-tier City firms full-time for about £2.5m a year, I can't see how this deal will generate that level of economy, initially at least.