The Ethics Committee is launching a regular series of Ethics Minutes for federal litigators and others – what to watch out for, what to do and what not to do.  Here is our maiden voyage.  Let us know what you think!  Have an idea for a future Ethics Minute?  Reach out to us!

The Curtain Rises

Abbie’s law school buddy, Bud, is national counsel for BigCo, defending claims against it all over the country.  Bud asks Abbie if her firm can serve as “local counsel” for cases against BigCo in the state where Abbie’s firm is located.  To help Bud, Abbie agrees, even though the fees are going to be minimal.  Abbie completes the business intake paperwork that her firm requires, and lists Bud’s firm as the new “client.”

Without being admitted pro hac vice, Bud sends pleadings from time to time for Abbie to file; Abbie trusts Bud, and doesn’t review the pleadings very carefully before filing them.  Abbie never has any contact with BigCo; fee bills are processed through Bud’s firm.

Bud slips up one day, and the signature block on a pleading lists Bud as counsel for the client, instead of Abbie.  Abbie is really busy, doesn’t review the document carefully, and files it.  In the same case, Bud also negotiates directly with opposing counsel by phone, representing himself as an attorney on the case.  Opposing counsel informs the state disciplinary authorities.

After an investigation, Abbie is disciplined under her jurisdiction’s versions of the Model Rules of Professional Conduct, namely Rules 5.5 and 1.4, for assisting the unauthorized practice of law and for failing to consult with the client – BigCo –about the means for accomplishing its objectives. (Bud is disciplined both in Abbie’s jurisdiction and his home state for unauthorized practice.)

The Moral of the Story

There is no “local counsel exception” to the rules of professional conduct.  When you agree to be local counsel in litigation, your client is the client – here, BigCo –not the referring law firm.  That means that the full panoply of ethics duties to the client comes into play, unless you agree with the client on reasonable limitations (see Model Rule 1.2(c)).  Many law firms in fact recommend some proposed limits, with standard language that they make part of their engagement letters.  That can be a good practice.

There is an instructive New York City Bar Association ethics opinion that spotlights the reach of local counsel duties absent contrary agreement.  Finally, you should also be aware of the business impact of agreeing to serve as local counsel on a small matter, if a foreseeable future conflict of interest would preclude you from taking on other work.

Ethics Minutes” are for your general information and do not constitute legal advice.  The rules, ethics opinions and disciplinary cases in particular jurisdictions vary, and might result in an outcome different from the scenarios that are described here.

Karen E. Rubin  is counsel in the Cleveland office of Thompson Hine LLP, where her practice focuses on ethics, professional responsibility and business litigation.  She serves on the FBA’s Ethics Committee, and in addition is a past chair of the Cleveland Metropolitan Bar Association’s Certified Grievance Committee, which investigates allegations of attorney misconduct.  Karen is an adjunct professor of law at Cleveland-Marshall College of Law, teaching legal ethics.  She also is co-editor of Thompson Hine’s award-winning legal ethics blog, The Law for Lawyers Today.