Delaware Business Litigation Report
What to Expect From Your Delaware Counsel
Recently, the Delaware Court of Chancery has set out what it expects from Delaware lawyers serving as co-counsel in litigation controlled by non-Delaware attorneys. The court explained: "The concept of 'local counsel' whose role is limited to administrative or ministerial matters has no place in the Court of Chancery. The Delaware lawyers who appear in a case are responsible to the court for the case and its presentation." This raises the related issues of what non-Delaware law firms should expect from their Delaware co-counsel in Delaware litigation and what the Delaware counsel should in turn expect from their non-Delaware co-counsel. Treating these issues openly can only help those relationships
What to Expect from Delaware Counsel
What should Delaware counsel be expected to bring to their role as co-counsel to out-of-state firms controlling Delaware litigation? Delaware counsel should be aware that their co-counsel must answer the basic client question: "Why do I need two law firms, and if I must have Delaware counsel for litigation in Delaware, why should I also retain non-Delaware counsel?" The proper role of Delaware counsel answers this question.
First, the right Delaware counsel will know the basic substantive Delaware law involved. Many Delaware firms maintain databases of briefs, articles, court transcripts and other sources of Delaware law. Using their expertise will save the client money. This does not mean that Delaware counsel must write the briefs or make the arguments in the litigation. After all, the non-Delaware firm will know the client's business, the facts behind the dispute, the client's real business objectives and the client's approach to risk and the burdens of litigation. Those aspects of any litigation are often more important than bare legal principles. But Delaware counsel's knowledge of the latest developments in Delaware law does add value to the client.
Second, the right Delaware counsel will know Delaware procedures. These can be tricky because Delaware procedures are not always set out in the court's published rules. There is nothing worse than filing a pleading that fails to meet the court's expectations as to form and content. That only gets the litigant off to the wrong start with the judge. Moreover, some of Delaware's procedural rules may come as a surprise to a non-Delaware lawyer. For example, confidential court filings are automatically released to the public absent strict compliance with Delaware's unique requirements to keep court filings private.
Third, the right Delaware counsel will know the Delaware judge's way of thinking. That knowledge is only obtained by appearing before that judge many times and regularly reviewing the transcripts of hearings before that judge. This is knowledge developed over time. Recently, I attended a hearing where the out-of-town lawyer argued that Delaware courts had no real interest in the litigation because his client's only contact with Delaware was as its state of incorporation. That was a big mistake before a judge who takes pride in his role in adjudicating the disputes of Delaware corporations. A bad argument taints even the best of what else the lawyer has to say.
Finally, the right Delaware counsel will be a good sounding board for how to approach the litigation before a Delaware judge or jury. Sometimes it is hard for a client's regular counsel to persuade the client that some desired course of action is not wise. The Delaware counsel, however, can more freely dissuade the client (whom that lawyer may never see again, anyway) that a particular course of action "is not the way to do this in Delaware."
In short, the right answer to the client's question about why to hire two law firms is that, together, the blended talents of those firms will provide the best representation. Their efforts will complement each other, not duplicate work.
What Delaware Counsel Expect From Co-Counsel
As with any working relationship, there are obligations of each party to the others involved. Delaware counsel expect at least the following from non-Delaware counsel controlling the litigation:
• Delaware counsel's role needs to be understood and respected. The Court of Chancery, for example, expects Delaware counsel to see to it that the client fulfills its discovery obligation, such as preserving electronically-stored information. If Delaware counsel is not able to certify that has been done, the client will have a problem. This does not mean that in most cases Delaware counsel will do the substantive work. Rather, he or she will provide guidance on how to do the work correctly under Delaware law and support the non-Delaware counsel before the court. The word of a respected Delaware lawyer is invaluable in Delaware litigation. The court will know something is wrong when the Delaware lawyer cannot stand behind any position.
• Delaware counsel needs to have the time to fulfill his or her proper role in the litigation. Sending a pleading to Delaware counsel to file in an hour or two is not acceptable. Again, this does not mean that needed changes are going to be omitted because they are done at the last minute. But having Delaware counsel review a draft with sufficient time to make comments will still permit last-minute edits when the senior partner at the non-Delaware firm finally gets around to reading the brief or other pleading. If Delaware counsel is to add value to the representation of the client, he or she needs time to do so.
• Delaware counsel's compensation should be protected by lead counsel. Failing to forward Delaware counsel's statements to the client, failing to explain Delaware counsel's proper contribution to the joint representation and failing to follow up on any payment issues are occasional problems. Fortunately, this seems to occur only with non-Delaware firms that lack pre-existing relationships with Delaware counsel or lack experience in working with co-counsel.
In summary, working with the right Delaware counsel should both be efficient and add value to the representation of the client. Understanding the proper roles of both Delaware and lead counsel will make that happen. Ignoring the role of Delaware counsel will only lead to trouble and, ultimately, a dissatisfied client.