Many litigators have either sought or served as local counsel at least once in their careers. Litigators with national practices may work with local counsel more often than not. Those with niche practices based in specialized jurisdictions, such as Delaware business litigators, also frequently serve as local counsel to those whose primary practices are outside the jurisdiction.
For many, this situation arises when a new or long-standing client asks an attorney to work on a matter pending in a jurisdiction in which the attorney is not licensed to practice. Where the attorney's experience qualifies her to represent the client in the matter, she may accept the representation instead of referring it to another attorney in the other jurisdiction. This would usually require the attorney to enlist counsel in the other jurisdiction to assist with the matter. The attorney usually relies on the local counsel for procedural assistance, filing responsibilities, and other seemingly mundane tasks, but has primary authority over strategic decisions and maintains direct client contact. The local counsel reviews pleadings to ensure that procedural requirements are satisfied and advises on the applicability of local rules and state law when necessary. The matter eventually concludes through settlement or at trial. The client is thrilled with the result.
But what if the client were dissatisfied with the quality or result of the representation? The short answer is that both lead and local counsel could face a legal malpractice claim, regardless of which counsel truly controlled the matter or even which counsel committed the alleged error? This may come as a surprise to those who serve as local counsel, as many in that role assume that their limited role during the representation means their liability is similarly limited. That assumption can create unnecessary risk for the local counsel.
Local counsel can take steps, however, to limit their malpractice exposure commensurate with their role in the representation. One way in which local counsel can achieve this goal is through effective engagement letters. Because the duties and obligations of Georgia attorneys who serve as local counsel are practically identical to those of lead counsel, engagement letters are an important tool in both preventing and successfully defending malpractice claims if they occur.
Follow All the Rules
Local counsel can sometimes operate under a false sense of security. They might assume that lead counsel shoulders the brunt of the responsibility for the representation. In reality, however, the local counsel still has professional duties and obligations to the client.
Neither the ABA Model Rules nor the Georgia Rules of Professional Conduct distinguish between lead counsel and local counsel. In other words, the rules do not expressly permit local counsel to automatically waive or avoid duties thereunder. As a result, cautious local counsel may take steps to ensure that they comply with all ethical obligations, including providing competent representation (Rule 1.1), acting with reasonable diligence and promptness (Rule 1.3), regularly consulting and communicating with the client as may be required during the representation (Rule 1.4), and avoiding conflicts of interest (Rules 1.7-1.9).
Indeed, the State Bar of Georgia has issued a Formal Advisory Opinion suggesting that the role of local counsel "may carry with it affirmative ethical obligations." FAO 05-10. The opinion addresses whether a Georgia attorney, who agrees to serve as local counsel, may be disciplined for discovery abuses committed by an out-of-state counsel who is not a member of the Georgia Bar. The Formal Advisory Opinion Board answered in the affirmative. It concluded that local counsel can be disciplined under Rule 5.1(c) for discovery abuses when the local counsel either knows of the abuse and ratifies it by his or her conduct, or when the local counsel has supervisory authority over the out-of-state counsel. As it pertains to the discovery process, "Rules 1.2(a) and (d); 1.6; 3.3(a)(1) and (4); 3.3(c); 3.4(a), (b) and (f); 3.5(b); 4.1(a); 4.2(a); 4.3(a) and (b); 5.1(c); 5.3; 5.4(c); 8.4(a)(1) and (4) may apply to the conduct of local counsel depending upon the degree of local counsel's involvement."
But the opinion does not stop at addressing local counsel's discovery obligations under the rules. It continues: "[T]here is nothing in the role of local counsel that excuses an attorney from the usual ethical requirements applicable to his or her own conduct in the representation. ... If local counsel engages in any unethical conduct, it is no defense to a violation that the conduct was suggested, initiated, or required by lead counsel." Moreover, when the relationship between lead and local counsel is "indistinguishable from that of co-counsel," "the usual ethical responsibilities apply." And of course, "typical acts required of local counsel, such as moving of admission pro hac vice or the signing of pleadings, always carry with them affirmative ethical obligations."
When in doubt, the safest option is to ensure compliance with all ethical obligations.
Utilize Limited-Scope Engagement Letters
One way to achieve more clarity while reducing exposure to a potential malpractice claim is by narrowly defining the scope of local counsel's engagement.
Georgia Rule 1.2 expressly permits a lawyer to limit the scope and objectives of the representation if the limitation is reasonable under the circumstances and the lawyer obtains the client's informed consent. In the local counsel context, whether the limitation is reasonable will likely depend on the scope of lead counsel's representation. For example, if lead counsel assumes primary responsibility for strategic decisions, then local counsel may properly exclude such responsibility from the scope of representation. Obtaining the client's informed consent may involve counseling the client to seek advice of independent counsel.
In drafting a limited-scope engagement letter, a standard engagement letter may serve as a valuable starting point. Other matters worth addressing might include a clear delineation of tasks, both procedural and substantive; timing of the representation; and sharing or division of fees with lead counsel, including billing frequency, expenses, and issues pertaining to nonpayment.
Finally, as with any effective engagement letter, many local counsel will confirm the terms of the written arrangement by obtaining the client's countersignature. This important feature helps to demonstrate that the attorney obtained the client's informed consent.
While acting as local counsel can be both professionally beneficial and financially lucrative, serving in this capacity is not without risk. Effectively managing that risk is possible through the use of limited-scope engagement letters.