Proper Record Retention
Most law firms today live in two worlds – the world of paper client files and the world of electronic client files. The big issue now is how to properly conserve each file type to ensure you keep proper documentation.
Paper vs. Electronic Records
As far as your obligation to clients, there is no distinction between paper and electronic record retention; the same retention period applies.
Electronic records can include the following:
- Documents – This would include anything that you would store in your “electronic client file” (from administrative documents to trial documents and everything in between) or in your document management system or including voicemails, videos, and any other type of “document”.
- Email – Email is a convenient way to communicate with clients. Some attorneys move their client emails to their practice management system, but many store their email in folders by client name in Microsoft Outlook. When considering an “electronic client file”, email is an essential part of the puzzle.
- Time, Billing and Accounting records – Typically, these types of records are stored in an accounting system and should be included in your procedure for closing client files. We will not address these specifically here, but they are considered part of the electronic client file.
Now that we know what documents we need to consider, let’s start by looking at a couple of key areas of electronic client files:
- Active paper files
- Closed paper files
- Offsite paper files
Active Paper Files
By starting the process of electronic record management with your active files, you create a plan for the future as well as the past. Most active cases today are a combination of electronic documents and paper documents.
There are three rules for active cases that will help you in your future records management:
- Scan anything paper related to the case to PDF. Have a procedure in place to make sure this happens.
- Shred the paper. Once the document is electronic, you can print it again if it becomes necessary. There are companies available for shredding and recycling. They will even provide bins for you to dispose of your paper. Depending on your office size and the amount of paper you generate, you may want to purchase an industrial shredder.
- Make sure the documents are searchable. This is key. You will want to be able to find documents later so you need to make sure they are searchable today. Contact your copier vendor or IT vendor to be sure that any documents that you are scanning on a multi-functional copier are automatically made searchable.
Closed Paper Files
Most firms have closed files in their office. Consider implementing the following strategy for closed files:
- Scan anything in the paper file to a searchable PDF. You can hire a scanning company or hire a file clerk or a law clerk to scan the documents.
- Export the Email. In order to maintain all case related information in one place, export the case-related email. If it is sitting in MS Outlook, the email is separated from the rest of the client file. Export it from Outlook and save it with the rest of the electronic files.
- Shred the paper.
- Make sure the existing electronic files are searchable. MS Office files are already searchable, but your older PDF files might not be. Invest in Adobe Acrobat Professional to convert multiple PDF documents to searchable text at one time by using their Recognize Text in Multiple Documents feature.
Moving Closed Files
Once your closed cases are all electronic, organize them and move them to a designated closed file area.
- Create an Electronic Destruction Policy –This should be part of your file closing procedures and should document when a file is closed and when electronic data is destroyed. In addition to informing your staff, include this information in your engagement letter so the client is aware of your electronic data destruction policy.
- Create an electronic closed files storage area. These documents should be organized by year or month and year of closing depending on the volume of cases and your firm’s destruction policy. If your policy is to destroy them once a year, plan on January 1st for destruction. If it is on a monthly basis, use the end of the month.
By creating this secondary area of storage for closed files, they can be separated from your existing active cases, but still available. If they need to be relocated to cloud-based storage or some type of alternative storage, all of the files will be in one area with a destruction date set.
- Backup, Backup, Backup. Your data backup for your active files and your closed files should be the same. A good rule of thumb is that your data should be stored in three different locations.
- Calendar your destruction dates. Create a recurring appointment for you or your staff to destroy the electronic documents. If it is on the calendar, it is more likely to be done on a regular basis.
- Maintain destruction records. Just like with paper destruction, records of destruction for electronic documents should be maintained indefinitely and should include the file name and destruction date.
Offsite Paper Files
Offsite storage of paper documents is extraordinarily expensive and most firms have been doing it for years. Just looking at the monthly cost for offsite storage will make most attorneys weak in the knees. But, your firm needs to come up with a plan for those paper documents and how they should be managed. Typically, there are two strategies for offsite paper documents:
- Firms retrieve paper files that have been sent offsite and scan and destroy the files in accordance with their electronic data destruction policy. This policy is good for removing some of the files from storage, but it varies depending on the record keeping for the firm.
- Firms find that the cost of retrieving the paper files, scanning and destroying files is too expensive and continue to store files until the destruction dates. Then, the storage facility will destroy the existing files and offsite storage is no longer necessary.
Both of these strategies work, so your decision should be based on how long you have been storing documents offsite, how much storage your firm uses, and how organized your offsite records are. The offsite storage issue may not be fixed in the short-term, but at least the firm will have a plan to move into the future.
Plan for the Future
As they say, the future is now. By implementing document retention and destruction strategies for all of your files, you can bring your paper documents under control, making them searchable and accessible anywhere, and saving on offsite storage costs. In short, by creating a written policy for electronic document retention and destruction, informing your clients and staff of the policy, and implementing the policy, your electronic documents and paper documents will be organized with a plan for the future.