If you only agree to be “local counsel” in a matter, you can rest assured that your limited undertaking also limits the scope of your duties — right? Wrong — as a recent disciplinary case and recent ethics opinion point out.
No “local counsel exception” to conduct rules
If your law school friend is serving as “national counsel” for a company defending product liability cases all over the country, you would naturally welcome a call asking you and your firm to serve as “local counsel” in your state in a claim against the company filed on your home turf.
In taking up the opportunity your friend is offering, you might make some assumptions — you might even regard these assumptions as “customary” in your bailiwick. You might assume, for example, that your firm is only going to be a “mail drop,” and therefore you have no duty to know or advise on the substantive local law at play. You might also assume that your duty to communicate is limited to interchanges with “national counsel.” In fact, since you might never have any contact with the company itself, you might even designate the “national counsel” firm as the “client” in your billing system.
These assumptions may be “customary,” but they almost certainly lack any basis in your state’s version of the Model Rules of Professional Conduct — which make no distinctions between “local counsel” and “primary counsel” when it comes to the duties arising from the attorney-client relationship.
Disciplinary Counsel v. Broyles, decided October 29, illustrates how thinking of yourself as “only” local counsel can lead you astray. The Ohio lawyer in the case drew a public reprimand for his conflict of interest in representing a couple in defending a foreclosure action brought by a lender. The conflict consisted of the fact that nine months earlier, a law firm had hired the lawyer to be “local counsel” in representing the same lender against the same couple in obtaining a default judgment in the same foreclosure case against them.
The consent to discipline that the parties filed in the disciplinary case details that after the lender demanded the lawyer’s disqualification in the foreclosure suit, the court granted the motion, and the lawyer appealed.
On appeal, the lawyer argued that he was only providing local counsel services to the law firm that had hired him (which is where he sent his fee invoice) — and that he had never represented the lender. He said “that he was providing a service to the law firm and not to [the lender] as he had no authority to make any representations to the court and did not advocate for any position in the case.” There was no case law to support that contention, and the appeals court held that the lender was the client, and reasonably believed itself to be.
Bottom line: the lawyer not only got disqualified from the foreclosure case based on his confusion about who his client was, but also was embarrassed with a public reprimand based on the violation of Ohio’s version of Model Rule 1.9 on former-client conflicts.
Ethics opinion guidance
In June, the Committee on Professional Ethics of the Association of the Bar for the City of New York issued an ethics opinion underscoring that lawyers who act as local counsel must adhere to the same ethics rules as lead counsel. “An attorney who agrees to act as local counsel may be subjected to obligations and risks that she does not anticipate or intend to assume,” the Committee said. If there are to be any limits on the scope of local counsel’s work, “it is the attorney’s obligation to communicate [them] to the client … rather than to rely on undefined terms, such as ‘local counsel.’ Preferably, local counsel will enter into an independent written retainer agreement with the client.”
This emphasizes the central role of the engagement letter, and the best practice of making the retention agreement directly with the client — not with “lead counsel.” If you intend to limit your role to certain tasks, or a certain phase of the matter, you had better lay that out clearly at the beginning of the representation and get the client’s consent in writing.
As always, communication and documentation are the keys to avoiding unpleasant and potentially expensive surprises.