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1. Avoid code duplication. I.e., increase code reuse.
2. Avoid recomputation.
   This sometimes provides dramatic benefits. Avoid re-mentioning an unchanging argument.
3. To hide the name of helper functions. An AsideWhile important conceptually, most aside: many programming languages (including SchemeJava) provide alternate mechanisms for this (such as public/private attributes) for hiding helper functions and data which scale better to large programs . These mechanisms typically have names like modules orpackages. As this one example shows, even small programs can get a bit less clear when hiding lots of helpersand accomodate the unit testing of hidden functions (which local does not!).
4. Name individual parts of a computation, for clarity.On the other hand, don't get carried away.

Here are two easy ways to misuse local:

;; max-num: non-empty-list-of-number -> number
(define (max-num a-nelonalon)
  (local [(define max-rest (max-num (rest a-nelonalon)))]
    (cond [(empty? (rest a-nelonalon)) (first a-nelonalon)]
          [else  (if (<= (first a-nelonalon) max-rest)
                     max-rest
                     (first a-nelonalon))])))

Try running this example on any legal input (according to the contract). It blows up!Question: What's wrong with this?
Make sure you don't put a local too early in your code.

;; max-num: non-empty-list-of-number -> number
(define (max-num a-nelonalon)
  (cond [(empty? (rest a-nelonalon)) (first a-nelonalon)]
        [else  (local [(define max-rest (max-num (rest a-nelonalon)))
                       (define first-smaller? (<=(first a-nelonalon) max-rest))]
                  (if first-smaller? max-rest (first a-nelonalon)))]))

This isn't wrong, but the local definition of first-smaller? is unnecessary. Since the comparison is only used once, this refactoring is not a case of code reuse or recomputation. It provides a name to a part of the computation, but whether that improves clarity in this case is a judgement call.

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