One of the interesting things about TERA is that--even though it has a cross-server instance finder--transient dungeon groups often still form via the old method of asking in local chat. It seems sort of odd, given the experience in WoW, where the Dungeon Finder has completely displaced asking in chat.
So why does local chat still work for forming groups? I have several theories:
1. First, TERA's LFG has no rewards associated it. Using the instance finder has no innate bonus other than letting the system find a group for you.
2. Dungeons are located near people questing. So far, all the dungeons are in roughly the same area as the bulk of people at the correct level. This means that local chat is likely to contain all the people who might be interested. This is in contrast to WoW, where dungeons are often in a different zone, and especially SWTOR, where the dungeons were all back at Fleet.
3. Queue times for non-tanks are very long. TERA only has one tank class, Lancers, who are eligible for the Instance Finder. Thus the queue times for the other classes can be very long, up to half an hour for healers, and one to two hours for DPS. This makes it worthwhile for a non-tank class to start a local group.
However, tank classes have instant queues. So why would a tank class go with a local group, rather than jumping in the Instance Finder?
I think that part of it is the idea, maybe caused by WoW, that local groups are superior to random groups, which lack accountability. Personally, I don't see this in practice, in either WoW or TERA, but it is a very common belief.
However, I think another part of it is that local chat can get tanks who are beginning to tire of their current leveling activity. Because queues are instant, the choice as a Lancer is very binary. You either run the dungeon or you go questing. But maybe after doing a few quests, you're sort of wavering between continuing questing or going for an instance. Seeing a request for a tank can tip you over to one side, and might even allow you to feel altruistic for helping out an existing group.
Either way, it's an interesting phenomena. I am still not really sure why local chat and the instance finder coexist.