The second installment in a three-part series on local counsel using examples from Delaware

Last month I posed the question: What happens if you live outside of the state of Delaware, but have a legal matter that has to be decided in Delaware Courts? My first installment addressed the need for local counsel, the value local counsel can provide to the client, and the responsibilities of local counsel. This month I will outline the protection afforded by local counsel, the division of labor between local counsel and the individual’s attorney, and ways of defining the scope of their work to best manage fees.

To recap the circumstances requiring local counsel…

You may find yourself, or your business, in one of these situations:

• You must sue a Delaware company for breach of contract.
• A company that owes you money has declared bankruptcy in Delaware.

Can your own, familiar attorney represent you? In Delaware, as in most states, the answer is yes.

Attorneys from outside the state of Delaware are permitted to represent their clients in the courts of the state of Delaware if they follow certain rules and guidelines. Of course, the out-of-state attorney must agree to be bound by the Rules of Ethics, the Principles of Professionalism of the State of Delaware, and is subject to the jurisdiction of the Supreme Court for disciplinary purposes. Another important requirement is that an out-of-state attorney must associate with a “local” Delaware attorney. Most jurisdictions have similar requirements permitting an out-of-state attorney to appear on a temporary basis, one case at a time, by applying to the court for admission pro hac vice, or “for one matter.”

Protection for Clients
The purpose of these rules is to protect the public against errors by unqualified professionals and against the unauthorized practice of law. When out-of-state counsel applies for permission to practice pro hac vice, it is for a single case. In State court, out-of-state attorneys must identify how many times they have been admitted in Delaware courts in the prior year. This assists the court in monitoring whether an attorney not licensed to practice law in Delaware is, for all practical purposes, maintaining an office in Delaware by frequently representing clients in court.

Local Counsel Assists
Local counsel is responsible for a basic investigation of the matter and the out-of-state attorney for the single matter. The local attorney checks to see that there are no conflicts of interest between the incoming client and the current clients of his firm. Local counsel will discuss the scope of local counsel’s duties envisioned by the out-of-state attorney, which can range from completely taking over the litigation to merely reviewing documents and making appearances as required by the rules. The out-of-state attorney must certify that he is in good standing in his own jurisdiction and has no disciplinary actions prohibiting or limiting his practice in his own jurisdiction. Local counsel usually must make some independent verification of these certifications.

Defining the Scope of Local Counsel’s Duties Can Save Money
The local counsel’s arrangement usually begins with a telephone call, proceeds through an investigation of the matter, conflict of interest checks, and verification of the good standing of the out-of-state attorney. It leads to a written agreement setting forth the scope of the duties and responsibilities of the local attorney. The client’s signature is usually required to approve limitations of the local attorney’s involvement.

The value of an agreement is that it allows the client to avoid unnecessary duplication of effort and focus on meaningful contribution by the local counsel. When a balance is found, courts and clients recognize and appreciate the role of local counsel. In cases which allow attorneys’ fees to be shifted from one side to the other, courts have held “time spent by local counsel reviewing correspondence and pleadings, as well as time in court, [is] eminently reasonable in light of local counsel's responsibilities under the local rules.” Ballen v. Martin Chevrolet - Buick of Delaware, D. Del. 1998 W.L. 101 3874 (September 17, 1998).

The attorneys in MacElree Harvey’s Delaware office have appeared in every court system within the state of Delaware and have served as local counsel for small and large matters, class actions, bankruptcies, personal injury cases, and have worked with attorneys from across the United States.

Next month, we’ll highlight a situation where an out-of-state attorney was disbarred for ignoring Delaware’s rules on representation.

MacElree Harvey
17 West Miner Street
Post Office Box 660
West Chester, PA 19381-0660
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