When an attorney is requested to act as “local counsel” by an out-of-state attorney in a new lawsuit, the practical needs of the out-of-state client can be at odds with rules of professional responsibility and local rules that can sometimes expand the duties and responsibilities of local counsel. The client is already paying a lead counsel whom it knows and trusts, and is then asked to retain and pay local counsel as well. Surely, the client is looking to avoid duplication of effort and being charged twice the amount of attorneys’ fees. One court recognized this tension and found that local counsel’s role can appropriately be limited to save expense to the client.
In Macawber Engineering Inc. v. Robson & Miller, 47 F. 3d 253 (8th Cir. 1995), the Eight Circuit Court of Appeals held that “local counsel does not automatically incur a duty of care with regard to the entire litigation.” The court explained:
Were the law otherwise, the costs involved in retaining local counsel would increase substantially. Confronted with a duty to monitor lead counsel’s handling of the litigation, local counsel would be bound to review all matter of litigation documents and ensure compliance with all deadlines. Out-of-state litigants would be forced to pay a local attorney to review lead counsel’s work. Given the skyrocketing costs of litigation, the duplication of effort and increased fees that would result from such a rule foster problematic public policy.
The Macawber court clearly articulated the salient public policy concerns inherent in any attempt to impose a duty on local counsel to “monitor” lead counsel.
Serving as local counsel can be a welcome professional opportunity, but also entail some substantial and unexpected risks. These risks can best be avoided by taking a few precautions:
Know what you are getting involved in and the people you are getting involved with. Quality lawyers are not likely to get local counsel in trouble. Avoid questionable claims or claims handled by lawyers you do not know or trust. Protect yourself with a retainer agreement that clearly and adequately defines the role you will play as local counsel. The retainer agreement should be signed or acknowledged by the client, not just by the referring counsel, and define the things you will be expected to do and, equally important, the things for which you will not be responsible. Carefully review both your local rules and the code of professional responsibility prevailing in your jurisdiction to better understand your duties and obligations as local counsel to both the court and the client.
With these few simple and common-sense steps, your risk as local counsel of being held accountable for someone else’s mistakes can be significantly reduced.