The Myth of “Local Counsel”

By Jeremy Sugg

A few years ago, I ran into a law school classmate in the courthouse elevator. In discussing where we were headed, I let her know I was on my way to a hearing on a motion to dismiss. She wished me good luck as we reached her floor, and I responded, “Oh, I’m just local counsel,” while smiling in recognition of the stress-free afternoon ahead.

Fast forward one year, after learning a lot more about the underlying facts of the case, I found myself questioning whether I had satisfied my professional obligations in permitting my signature to appear on the initial pleading. To say the least, it was no longer a stress-free endeavor.

The out-of-state attorneys in that case were from a very reputable firm and touted their experience in similar matters. The claims and subject matter were very complex. I read the pleadings and supporting case law and provided feedback before signing a final version. It never occurred to me that out-of-state counsel would not have undertaken an adequate investigation of the facts alleged in the pleading that I signed.

Fortunately, everything worked out in that case. However, I will never again utter the phrase “just local counsel.” In fact, despite its ubiquity, I do my best to avoid the term “local counsel” at all in favor of something more accurate, such as “co-counsel.”

Neither Rule 11 nor the Rules of Professional Conduct distinguish between “lead” counsel or “local” counsel or any other modifier. These rules create nondelegable obligations that cannot be eschewed based on a limited role in the case. It is important for you, your co-counsel and your client to understand these obligations so everyone is on the same page regarding the role you will play as an attorney in North Carolina.

Obligations Under Rule 11

Rule 11 of the North Carolina Rules of Civil Procedure provides that “every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name[.]” N.C. Gen. Stat. § 1A-1, Rule 11(a). “The signature of an attorney . . . constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose[.]” Id. (emphasis added). “If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it . . . an appropriate sanction[.] Id. (emphasis added).

Rule 11 of the Federal Rules of Civil Procedure is substantively similar but provides that the court “may” impose an appropriate sanction. Fed. R. Civ. P. 11(b). The Federal Rule also extends responsibility under Rule 11 to not just those who sign a document, but to anyone who “present[s]” it, “whether by signing, filing, submitting, or later advocating it[.]” Id.

“[T]he purpose of Rule 11 as a whole is to bring home to the individual signer his personal, nondelegable responsibility.” Pavelic & LeFlore v. Marvel Ent. Grp., 493 U.S. 120, 126 (1989) (emphasis added). “Rule 11 requires a lawyer who elects to sign a paper take responsibility for it, even if that responsibility is shared.” Harris v. Marsh, 123 F.R.D. 204, 216 (E.D.N.C. 1988). Rule 11 does not speak “in terms of associate and partner, ‘lead’ or ‘primary’ counsel, or foreign and local counsel—the statutory language is cast only in terms of ‘counsel’ or ‘an attorney.’” Id. “Counsel simply cannot delegate to others their own duty to act reasonably and to meet the professional mandates set forth in Rule 11[.]” Id.

“Well, do I have to sign?”

Given the requirements of Rule 11, you may question whether you can perform your role as local counsel without signing—or presenting to the court—a pleading, motion or other paper. Interestingly, this will depend on the court in which the case is filed.

Federal Courts in North Carolina

If you are filing in the Middle District of North Carolina, you will not escape the requirements of Rule 11. Local Rule 83.1 for the Middle District provides: “A member of the bar of this Court who accepts employment in association with a specially appearing attorney is responsible to this Court for the conduct of the litigation or proceeding and must review and sign all pleadings and papers,” and “must be present during pretrial conferences, potentially dispositive proceedings, and trial.” In Coburn Optical Industries, Inc. v. Cilco, Inc., it was made clear that “[t]he Court expects local counsel . . . to ensure that Local Rules and the Federal Rules of Civil Procedure are followed even when the pleading or motion is not prepared by them.” 610 F. Supp. 656, 660 (M.D.N.C. 1985).

The Eastern District of North Carolina is at the opposite end of the spectrum. Its Local Rule 83.1 specifically allows an attorney to be designated as a “Local Civil Rule 83.1(d) Attorney.” In signing a document, such an attorney “certifies that he or she is an authorized representative for communications with the court about the litigation and that the document conforms to the practice and procedure of [the] court.” However, such an attorney “does not make the certification required by Rule 11 of the Federal Rules of Civil Procedure.” Those requirements are to be “complied with by any out-of-state attorney.”

The Local Rules of the Western District of North Carolina state that an attorney admitted to practice pro hac vice “must associate local counsel and be accompanied by local counsel at all hearings unless otherwise permitted by the Court.” The Western District’s Local Rules do not specify whether local counsel is required to sign every document. However, at least one judge’s standing order in the Western District includes such a requirement, and further confirms that “[i]n so signing, local counsel shall be held accountable for the substance of such submissions under Rule 11(b) of the Federal Rules of Civil Procedure.”

Recall also that the Federal Rule applies to any attorney who files or otherwise presents a document and is not limited only to those who sign.

State Courts in North Carolina

Admission pro hac vice in North Carolina state court is controlled by N.C.G.S. § 84-4.1. This statute makes local counsel “responsible for filing a registration statement with the North Carolina State Bar” but does not address whether local counsel is required to sign any pleadings, motions or other papers. I was also unable to find any local rules for our state courts that specifically address this.

Even the rules of the North Carolina Business Court do not specify whether local counsel is required to personally sign filings. However, it appears the judges on the Business Court are increasingly addressing this in their orders allowing pro hac vice admission. Thus, if you will be acting as local counsel before the Business Court, you should anticipate signing every filing and appearing at every conference or hearing, and at trial.

Obligations Under the Rules of Professional Conduct and Otherwise

Of course, our only obligations as local counsel do not arise from Rule 11, and whether you may be required to sign your name to a filing is not the end of the inquiry.

Our Supreme Court has interpreted N.C.G.S. § 84-4.1 to require local counsel to “appear with” out-of-state counsel “at all times during the proceeding he seeks to enter pro hac vice.” In re Smith, 301 N.C. 621, 632 (1981). The court in Smith explained: “The association of out-of-state counsel with a local attorney satisfies a reasonable interest of our courts in having a member of the Bar of our State responsible for the litigation.” Id. (emphasis added). It is difficult to imagine how an attorney could be “responsible for” litigation without taking responsibility for the pleadings, motions and other papers filed therein.

Rule 5.5 of the North Carolina Rules of Professional Conduct prohibits us from “assist[ing] another person in the unauthorized practice of law.” 27 N.C.A.C. Rule 5.5(f). The rule permits lawyers admitted to practice in another jurisdiction to practice in North Carolina if certain requirements are satisfied. 27 N.C.A.C. Rule 5.5(c). This includes a requirement for the out-of-state lawyer to associate with a North Carolina attorney “who actively participates in the representation”. 27 N.C.A.C. Rule 5.5(c)(4) (emphasis added).

The comment to Rule 5.5 makes clear that a North Carolina attorney “may not serve merely as a conduit for an out-of-state lawyer but must actively participate in and share actual responsibility for the representation of the client.” 27 N.C.A.C. Rule 5.5 Cmt [8]. If local counsel’s “involvement is merely pro forma, then both lawyers are subject to discipline under this rule.” Id.

The requirement for local counsel to “share actual responsibility for the representation of the client” implicates many other Rules of Professional Conduct. See e.g. 27 N.C.A.C. Rule 1.4 (communication with client).

Similar to Rule 11, RPC 3.1 prohibits a lawyer from bringing or defending a proceeding, or asserting or controverting an issue therein, “unless there is a basis in law and fact for doing so that is not frivolous[.]” 27 N.C.A.C. Rule 3.1. The comment to this rule further explains that it requires attorneys to “inform themselves about the facts of their clients’ cases and the applicable law and determine that they can make good faith arguments in support of their clients’ positions.” Id. at cmt. [2].

What is a “Reasonable Inquiry”?

At this point, you may be questioning whether it is realistic to expect local counsel to assume the weight of these obligations. It is true that local counsel often face difficult circumstances. Attorneys are notorious procrastinators, and local counsel may bear the brunt of this, receiving documents to be filed with only moments to spare or otherwise minimal time for review, input, or modification. In addition, clients often do not want to pay a second firm to repeat work performed by a firm with whom the client has a more established relationship. Out-of-state counsel may also be protective of its relationship with the client and prefer to be the client’s only point of contact.

Fortunately, the rules do take such circumstances into account. Recall that Rule 11 speaks in terms of a belief that is formed after reasonable inquiry. The Advisory Committee Note to the Federal Rule explains: “what constitutes a reasonable inquiry may depend on such factors as how much time for investigation was available to the signer . . . or whether he depended on forwarding counsel or another member of the bar.”

One author has most succinctly summarized the interplay between the express obligations of Rule 11 versus this leeway in its application as follows:

The rule by its terms does not require signing counsel to have personally performed the inquiry. What it does require is that signing counsel have the requisite ‘knowledge, information and belief . . . .’ The duty of inquiry, therefore,should be regarded as nondelegable but capable of being satisfied by the attorney’s acquisition of the product of inquiry conducted by others.

William W. Schwarzer, Sanctions Under the New Rule 11—A Closer Look, 104 F.R.D. 181, 187 (1985).

So, as local counsel, you do not have to repeat the same investigation completed by out-of-state counsel. However, you do need to ensure an investigation was completed and understand the scope of that investigation such that you can articulate a good faith basis for your own personal belief that the facts are well supported. What exactly that will entail will depend on the circumstances of each case, including, for example, your relationship with out-of-state counsel, the nature of the allegations, and the complexity of the underlying facts at issue. If you are faced with the prospect of filing a document with little time to satisfy yourself regarding the underlying facts, consider requesting verification of the filing or obtaining a supporting affidavit for your own file.

And it should go without saying that you should read the pleadings, and the supporting case law.

As Judge Tenille once suggested: “Local counsel would be well advised to consider as a practical matter some of the things a court might consider in reviewing the pleadings.” Egelhof v. Szulik, 2008 WL 352668, at *1 n 2 (N.C. Super. Ct. Feb. 4, 2008).

Beyond this, perhaps the best guideline is to recall that “each member of the Bar is an officer of the court.” Harris, 123 F.R.D. at 216. “His first duty is not to the client or [another attorney], but to the administration of justice.” Id. This role seems to be particularly important when acting as local counsel. We are the court’s buffer against non-compliant filings. If we approach our role as local counsel with this in mind, there should never be a question as to whether we have satisfied our obligations.

It is important to ensure the client and out-of-state counsel understand the obligations you assume as local counsel. Every state is not the same. Some courts do not subject local counsel to the requirements of Rule 11. Some courts have even done away with the requirement of local counsel entirely. Your co-counsel may not understand the requirements for you as an attorney in North Carolina.

To avoid fee disputes and other issues, be sure that out-of-state counsel and the client understand a North Carolina attorney cannot merely serve as a drop box or conduit for filing in North Carolina courts. Make it clear in your engagement letter whether out-of-state counsel will be responsible for client communications or if you will have a role in those. Document the fact that you will require a reasonable amount of time to review filings before they are filed, and ask co-counsel to build that into their deadlines.

If anyone questions whether any of this is really necessary, feel free to send them a copy of this article.