January 20, 2016

New York City Bar Addresses Local Counsel Ethics and Risk Management Issues

Holland & Knight Alert
Peter R. Jarvis

Recent years have seen a number of civil damage actions in which attorneys who thought they were serving only as local counsel in a matter have been sued for alleged failures to provide representation beyond what local counsel likely thought they were obligated to provide. New York City Bar Formal Opinion 2015-4 provides clear and helpful guidelines about how to approach this issue from the professional responsibility side.

Opinion Highlights

The opinion correctly notes that under New York RPC 1.2(c), which is the same as ABA Model Rule 1.2(c), a lawyer may limit the scope of a representation "if the limitation is reasonable under the circumstances and the client gives informed consent." The opinion then asserts, "An attorney who wishes to define her role as local counsel should do so through an agreement to limit the scope of representation under Rule 1.2(c)" and adds, "It is the lawyer's obligation to ensure that her role as local counsel is clearly defined and that any limitations on the scope of representation are communicated to the client."

All of this is important because the client's expectations of what it means for a lawyer or firm to be "local counsel" can vary not only between clients but perhaps even between matters for the same client. As the opinion notes, for example, different clients in different cases may want their local counsel to backstop or check the completeness of the work of lead counsel in different ways or to different extents. Rather than leaving the situation to a subsequent battle over what the client was reasonably entitled to expect under the circumstances, it does indeed seem easier for ostensible local counsel to take the lead in explaining what she does and does not intend to do so that the client can make an informed choice. The opinion adds as well that while limitations of scope need not be communicated in writing, it is better – and safer – practice to do so.

The opinion also briefly addresses the question whether it is sufficient for local counsel to communicate about limited scope and related issues only with lead counsel and not with the underlying client. The opinion concludes that in most instances, communication by local counsel with lead counsel should be sufficient. That said, however, local counsel will often be ill-advised to remain silent if it reasonably appears to local counsel that lead counsel is acting contrary to the clients' interests.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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