Practice Points with Mark Scruggs - Before Agreeing to Serve as Local Counsel – Stop and Think!

When you get that call from an out-of-state attorney asking you to serve as local counsel, consider the risks. You might think that being local counsel is a ministerial act or duty; something necessary for the out-of-state lawyer to obtain admission pro hac vice to represent his or her client in a North Carolina court. While N.C. Gen. Stat. Ann. § 84-4.1(5) may lead one to think that local counsel is little more than an agent for service of process, I suggest it is much more than that. First, a general appearance by local counsel is required by G.S. 84-4.1. In re Smith, 301 N.C. 621, 633, 272 S.E.2d 834, 842 (1981). Furthermore, Local counsel is required to be present with out-of-state counsel admitted pro hac vice at any hearing or trial. An out-of-state attorney, even if admitted pro hac vice, cannot represent a client in a hearing or trial in North Carolina unaccompanied by local counsel. State v. Daughtry, 8 N.C. App. 318, 319, 174 S.E.2d 76, 77 (1970)

So, what are the risks? Too often, local counsel will not have had any contact with the client. The out-of-state lawyer will likely want it that way. What if out-of-state counsel is dilatory, perhaps even negligent, in representing the client, e.g., failing to respond to discovery? Your name is on the pleading, too, yet you have little ability to control the litigation, other than to cajole, beg, threaten out-of-state counsel with the possible ramifications of his or her neglect. We at Lawyers Mutual have had numerous calls from insureds bemoaning the fact that they cannot get out-of-state counsel to comply with discovery, or in some other way to handle the case effectively, ethically and in accordance with our rules of procedure, and wondering about what might befall all counsel of record as a result. We even had a call from an insured in the middle of a trial asking what his options were given that out-of-state counsel was botching the trial of the case! The North Carolina Rules of Professional Conduct do not make any distinction between the obligations to the client of local counsel versus lead counsel. If you are an attorney of record for the client, you have all the obligations set forth in the Rules of Professional Conduct, including the duty of Competence, Diligence and Communication. These are duties you will likely have difficulty carrying out as local counsel.

So, what can you do to minimize your risk?

First, consider insisting on a limited scope engagement agreement directly with the client. Rule 1.2(c) of the Rules of Professional Conduct permits a lawyer to limit the scope of his or her engagement as long as the limitation is reasonable, so if out-of-state counsel insists that he will deal directly with the client, make decisions concerning the case, conduct discovery, try the case, etc., why not spell that out in writing?

Second, stay ahead of the curve. If out-of-state counsel is being dilatory and is not handling the case the way you know it should be handled, withdraw. Don’t wait until opposing counsel’s motion to strike the client’s expert witness due to out-of-state counsel’s failure to timely disclose the witness is set for hearing.

Serving as local counsel is not a ministerial act. Don’t be dragged along to a train wreck. Take precautions. Limit the scope of your representation in writing with the client. Withdraw as soon as you see that out-of-state counsel is not up to the task for one reason or another. Otherwise, you may be stuck in a case that’s about to derail with no ability on your part to control the result.