And When You Have Too Much Documentation…

The cost of storing paper files indefinitely is expensive. A proper file retention policy can save your firm a lot of money. Here are five key points to keep in mind in creating file destruction policy:

Have a plan. The worst thing you can do is to destroy files haphazardly without a method you can explain. Put your plan in writing and follow it routinely so that no one can claim you destroyed evidence.

Consider each file individually. Difference types of cases and clients require different destruction schedules. Estate planning may have a long lead time-we recently saw a case where a malpractice claims was brought almost 30 years after the firm last worked on the matter. On the other hand, a litigation matter where a judgment is fully paid and the client is happy with the recovery may be one that can be destroyed relatively quickly. The best time to decide when to destroy a file is at the conclusion of a matter. Let the client know how long you will retain the file unless they ask for it.

Consider statutes of limitations. Unfortunately, the statute of limitations on legal malpractice in Texas is usually two years from the date when the client discovers or should have discovered an error. Still, this suggests a minimum retention time. Statutes of limitations are tolled for minors. Income tax issues often affect legal transactions, and you may want to keep files at least long enough avoid destroying files in which the client may claim you failed to properly advise them on tax ramifications. Many firms with file destruction policies have chosen seven year minimum retention schedules, based on tax limitations.

Don’t depend upon files as research banks. Put good research, pleadings, briefs and forms into research files-whether computerized or on paper.

Give clients original documents when you are through. Make it clear to clients that they are responsible for keeping their important original documents, and that you will not store them indefinitely.

The Bible of Law Firm Document Retention

We frequently refer insureds to an extensive article on records retention, Lee R. Nemchek, Records Retention in the Private Legal Environment: Annotated Bibliography and Implementation Tools, 93 Law Library Journal 7 (v. 1, 2001), available free online at http://www.aallnet.org/products/2001_01.pdf. This article is by far the most comprehensive article on records retention we’ve come across. Ms. Nemchek has subsequently authored two books on records management we have not reviewed, but which are worth checking before starting a record retention program. See the website of the Private Law Libraries Records/Conflicts Management Group website athttp://www.aallnet.org/sis/pllsis/Groups/records.asp for more details.

By Jett Hanna