The Local Reich Lord is a unique spawn that happens during the second Illica Falki quest given by Nodah. There is only one available in the game and should be considered as nothing more than a novelty.
Tactics[]
There is nothing that stands this unit out from Dragoners and should be attached to your frontline cavalry. Eventually, he will take a lucky shot to the head and die and you won't be able to replace him, you'll be sad, you may even cry, you'll move on and realise he wasn't anything special anyway.
If you wish to keep him alive, you could either bury him at the bottom of your troop line or put him in the bottom of your strongest castle.