Locally Administered Address (LAA) is a type of MAC address when the burned-in address (BIA) within the MAC address is overridden by the user. In these cases the second bit of the most significant byte of the Organisationally Unique Identifier (OUI) is changed to a binary 1. The burned-in address (BIA) is the last six bytes of a MAC address that are assigned by the manufacturer of a network interface card (NIC). When this happens the Network Interface Card (NIC) is said to be using as a Locally Administered Address (LAA) as its MAC address. If the NIC is not configured to use an LAA as its BIA then the second bit of the most significant byte of the OUI is changed to a binary 0. In this case the NIC is said to be using a Universally Administered Address (UAA) as its MAC address.

Switches and Bridges (including the virtual bridge implement in Linux) may not forward traffic from a LAA. So if you assign a LAA to your NIC, it may not communicate with outside. Everyone should keep this limitation in mind when you generation MACs for virtual machines.

Reference

1. MAC address in Wikipedia.
2. IEEE OUI and Company_id Assignments.
3. IEEE IAB and Company_id Assignments.
4. Standard Group MAC Addresses: A Tutorial Guide.