When a person from another state or entity such as a Limited Liability Company or a Corporation from outside the State of Wisconsin is sued in a Wisconsin Circuit Court or a Wisconsin federal court, they often have a lead or primary attorney from their home state already handling the matter. If the lead attorney wants to hire local counsel in Wisconsin, there are a few questions that should be answered as soon as local counsel is contacted.
First: Clearly Identify the Client
First, who is the client? In Wisconsin, the client is the person or entity that is being represented. Even though the primary lawyer may have contacted and vetted the local counsel attorney in Wisconsin, the client is the person or entity that has the pending legal issue. Accordingly, the person or entity is owed, by the Wisconsin local counsel lawyer, all the duties that attach to a customary attorney-client relationship such as competence, diligence, and prompt communication (see Wisconsin Supreme Court rules 20:1.1, 20:1.3 and 20:1.4).
It is important to keep in mind that these duties are owed directly to the client even if the local counsel is diligently and promptly communicating with the client’s primary lawyer. Stated another way, even though Wisconsin local counsel may be in direct contact with the client’s primary counsel (usually based in the client’s home state), local counsel should also be in direct contact with the client either by regular phone calls, direct emails or other correspondence, to fulfill these duties directly with the client. At a minimum, local counsel should regularly contact the client jointly with the primary counsel. When this issue is addressed and expectations are established at the beginning of the relationship, there is less of a chance of a misunderstanding of which lawyer should be in direct contact with the client, how often this will occur and the reasons for the direct contact with the client.
Second: Scope of Local Counsel
Secondly, the scope of local counsel’s role should be addressed upfront. In Wisconsin, an attorney is required by rule SCR 20:1.2 to abide by the client’s decisions concerning the objectives of the representation. Therefore, it is important for local counsel to follow the instructions of the client and not simply follow the directions of the primary attorney. Local counsel should not assume that both the client and the primary attorney are making the same decisions concerning the objective of the representation, It is local counsel’s duty and his/her responsibility, to make sure that the client’s decisions are being pursued.
Third: Fee Agreements
Third, local counsel should clearly understand who will be responsible to pay the legal fees incurred in the matter. If the fees will be paid on an hourly basis, the following could agree to pay the fees: (1) the client; (2) a third party; (3) primary counsel; or (4) a combination of 1 through 3.
Supreme Court Rule 20:1.5(b)(1) and (2) state in part:
(b)(1) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate as in the past. If it is reasonably foreseeable that the total cost of representation to the client, including attorney’s fees, will be $1000 or less, the communication may be oral or in writing.
(2) If the total cost of representation to the client, including attorney’s fees, is more than $1000, the purpose and effect of any retainer or advance fee that is paid to the lawyer shall be communicated in writing.
Under certain circumstances, Wisconsin ethical rules allow the fees for local counsel to be contingent upon the outcome of the case. In addition, a division of a contingency fee is allowed between lawyers from different firms even if one lawyer is local counsel and another lawyer is the primary counsel for the client. (SCR 20:1.5(e)). Personal injury cases, class action cases, securities/investment cases and fraud cases are some of the types of matters in which contingency fees are appropriate and customary.
Terminating the local counsel relationship also can at times be an area of some confusion. If the matter is before a court, Supreme Court Rule 20:1.16(c) requires that local counsel must provide notice to or obtain the permission of the tribunal when terminating the local counsel relationship for the client. Once local counsel has withdrawn from representing the client before the tribunal, there may be additional tasks that need to be addressed by local counsel. For instance, in cases where the client has legal matters pending in various jurisdictions or other potential similar cases, and Wisconsin local counsel was only representing the client before a Wisconsin court, there may be a need for continued representation of the client in order to protect the client in the other matters. Retaining documents, securing transcripts, contacting witnesses, or relaying statements made on the record by the opposing party are all examples of how local counsel may be called upon to represent a client even after local counsel has withdrawn from representing the client before the Wisconsin tribunal or court. If these concerns are present in a given case, terminating the local counsel relationship should be given special attention.
All of these questions and concerns should be addressed between the client, local counsel, and the primary attorney for the client at the outset of the relationship. In this manner, the client, lead attorney and local counsel are all well-informed about the scope and manner of execution of the local counsel relationship.
By Patrick J. Schott
Patrick J. Schott is a founding shareholder of Schott, Bublitz & Engel, s.c. His practice is devoted to complex civil litigation.
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Schott, Bublitz & Engel s.c. has been meeting the legal needs of clients in Wisconsin for over 26 years. As the firm’s reputation has grown, so has the extent of our legal expertise.