Now what will happen if the ISP is having some problems so that the Internet connection is down? We can't use that kind of IM client any longer, since there's no route to the servers. The solution is to use a local IM client. One of the simple one is YaK!. Taken from YaK!'s website:
Yak! is a text-based, chat application for use on Microsoft Windows 32-bit local area networks. It has a simple and easy to use interface, does not require a dedicated server and makes communicating across a LAN a dream
It doesn't have so much features compared to other IM client, but i think it's very sufficient for basic chat and also file transfer. You can look all of YaK!'s features here. Unfortunately, YaK! is not a freeware, but it's not time limited software, so you can use it as long as you like, but with a simple annonying message dialog (a reminder to purchase the application) when you minimized the application and want to restore it again (you will have to wait for 8 seconds). It also have little and simple smileys compared to other client.
The other application which can be used is Akeni LAN Messenger. This application is multiplatform so that it can be installed on Linux platform also (not like YaK! which only works in Windows platform). Akeni LAN Messenger came in several version and this is a shareware application, meaning that it's limited to 30 days trial and after that you will have to buy the license to continue using it.