Write the Contract Carefully
Contract analysis is the first step to understanding the obligations of local counsel. Everybody knows local counsel serves a limited role, but usually only until there is a problem. If a case is lost, or goes south for any reason, the client is very likely to decide that responsibility is based on the size of the malpractice policy. Careful drafting of the fee agreement is required to avoid this problem because: “The lawyer . . . bears the burden of ensuring that the contract states any terms diverging from a reasonable client’s expectations.” Restatement (Third) of The Law Governing Lawyers § 18 cmt. h. ABA Model Rule 1.2(c) also allows a lawyer to “limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.” Carefully limiting the scope as local counsel is always a good idea. It is critical that the fee agreement carefully define the jobs local counsel is expected to do and make it clear that lead counsel is responsible for everything not explicitly listed in the scope of local counsel’s duties.
Local counsel must also remember that the court will have something to say about their duties, and this needs to be considered and addressed in the contract. In the Eastern District of Texas, for example, conferences for discovery disputes must include lead counsel and all local counsel, and the certificate of conference must be signed by lead counsel and all local counsel. In the Northern District of Texas, local counsel must be prepared to present and argue the client’s position at any hearing called by the presiding judge. The fee agreement may limit local counsel’s role vis-à-vis the client’s case, but it must take into account the requirements of the particular court as well and include them in the contract.
Avoid Scope Creep
Once the limits are defined, they must be followed. Scope creep is real, and when lead counsel is shorthanded or pressed for time, it is easy to press local counsel into service for jobs outside the scope of their representation agreement. If it is impossible for local counsel to decline the occasional request by lead counsel to jump in on tasks outside the scope of employment, they must make it clear to the client that these are one-time exceptions so the client is not misled about local counsel’s responsibilities. If lead counsel frequently asks local counsel to perform tasks outside the scope of the duties articulated in the fee agreement, and local counsel has the ability and time to handle them, then it is time to have a discussion about amending the representation agreement to match the jobs local counsel is actually performing.
Local Counsel Owes All of the Ethical Duties to the Client
Finally, although local counsel can limit the scope of representation, they cannot contract away the ethical obligations to the client. The Model Rules of Professional Conduct make no distinction between the ethical duties of “local counsel” and “lead counsel.” This issue arises frequently in disputes about the reasonableness of fees, but goes beyond money. For example, in an unpublished case from the Fifth Circuit (Curb Records v. Adams & Reese L.L.P., 203 F.3d 828 1999 WL 1240800 (5th Cir. 1999)(unpublished)) local counsel contracted directly with lead counsel. The fee agreement provided for a limited scope of representation, and specifically forbade contact between local counsel and the client. Lead counsel missed a number of critical deadlines with the result that the case was eventually lost. Local counsel, staying true to the fee agreement, never contacted the client and therefore never told the client about the problem that led to their case being lost.
The Fifth Circuit found that the “no contact” contract was valid because lead counsel had authority to enter into such an agreement. It also found though that local counsel could not contract away his ethical obligations to the client, which included the obligation to inform the client of misconduct by lead counsel. It drew a distinction, however, between disagreements about strategy and “lead counsel’s malfeasance or misfeasance,” even while it recognized that this distinction may be hard to make in practice. Although the case was decided under Louisiana law, the ethical requirements on which the court relied are almost identical to those in the Model Rules. Many jurisdictions, New Mexico and the New York City Bar to name just two, have ethics opinions addressing this very issue, which are worth a read.
Serving as local counsel may not require a lot of work, but it does require careful thought about local counsel’s duty to the client. The fee agreement must clearly inform the client of the limited extent of local counsel’s work, which must take into account the obligations of local counsel to the court. Local counsel must remain diligent about doing work not specifically listed in their contract and amend the contract of that work becomes necessary. Most important, local counsel must remember that the fee agreement cannot override the lawyer’s ethical obligations to the client because those ethical obligations cannot be delegated or waived.