Phase one of a backup is written to a smart client with a VTL or SmartDisk on them. The physical tape is also on the smart client, but the phase two travels back to the server to make the duplicate.
You can ensure that the duplication process stays on the smart client by going into your backup jobs in the edit/view mode and look at the "Adcanced Options" tab.
Look at the "Secondary copy" section. On the right side of this section, you will see an option for, "Run secondary copy on" and a dropdown next to it.
By default, this is always set to "Server," however, if you click the dropdown arrow, you will see all the clients listed there as well. You can simply select your smart client and the duplication will stay local on that machine.
