Randy Evans and Shari Klevens, Dentons partners. ()
Years ago law firms were not very movable. They stayed in the same locations, usually near courthouses and city centers, for decades. Much has changed in these days of e-filing, cloud storage, and an ever-changing real estate climate. Law firms can and do move more easily and frequently now, giving rise to a host of operational and ethical questions with each move.
In the past, moving a law firm involved simply moving physical files from one location to another, with older documents generally sent away to storage. Law firms could then use the same filing system as before the move with confidence that the firm would likely stay at their new location for a significant amount of time.
However, the changing real estate market and technology has rendered a firm’s physical location less important. Thus law firms are often tempted to move with greater frequency, chasing lower rent and adjusting for changing needs with respect to the amount of office space needed to operate a law practice. As a result, law firms facing the expiration of a lease often decide to relocate.
The process of moving is generally easier for younger law firms, where relationships with clients may only extend for a few years. In such cases, moving may be similar as in the past and primarily involve packing up paper files and computers to transport to the new office. However, for law firms that have been in existence for decades, if not centuries, moving can implicate a wide range of legal, ethical, and professional concerns.
Some of the new challenges faced by attorneys include how and where to store old paper files, and how to safely and confidentially transport e-documents to new computer networks and servers in light of the ever-increasing cybersecurity risks.
An important aspect of the professional duties of an attorney is the obligation to protect client confidences and secrets, which continues even after a representation has been terminated. For example, Connecticut Rule of Professional Conduct 1.16(d) states: “Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interest, such as … surrendering papers and property to which the client is entitled…”
Accordingly, if an attorney does not retain documents needed to protect a client’s interest, the attorney may face a bar grievance for failing to provide the client with documents to which the client is entitled. The attorney’s ability to defend any subsequent legal malpractice claim may also be impaired as a result of the inability to produce the client’s documents.
Of course, the cost of retaining old files can often be an impediment. As businesses, law firms aim to operate at a profit, which certainly can be affected by the overhead costs associated with storing files in perpetuity. The challenge for a law firm is therefore to ensure that its document retention policies are sufficient to fulfill the law firm’s legal, ethical, and professional duties and to limit the risk associated with the disposal of files while keeping the costs within reason.
A key step for every law firm in limiting risk is to adopt a written document retention policy specifying the practices, procedures, and protocols for every employee in the law firm. It is generally insufficient and can create unacceptable risk when a firm utilizes ad hoc or informal procedures in retaining files.
Where ad hoc or informal procedures are used, the risk is that the procedures used by attorneys and practice groups within a firm may vary significantly. In such situations, a more stringent policy utilized by certain attorneys within the firm may be used as evidence that another attorney’s policy was insufficient or unreasonable. In addition, without a written policy, law firms may struggle to produce evidence that reasonable steps were taken to preserve necessary client files and information.
One of the most important features of any document retention policy is timing. Connecticut Rule of Professional Conduct 1.15(b) requires attorneys to preserve client records and other property “for a period of seven years after termination of the representation.” The seven-year requirement is in fact a departure from the five-year requirement suggested by the Model Rules of Professional Conduct and the rules adopted in many other jurisdictions—highlighting the importance of document retention in Connecticut.
As part of a document retention policy, documents from closed files can be separated into three categories. First, documents such as wills, leases, and contracts that carry a special legal significance should be placed in their own category and kept, at a minimum, for the length of time required by state bar rules, but not less than the time needed for full operational effect of the document.
The next category encompasses nearly all other documents. These should be retained as required by state bar rules or until the statute of limitations for a legal malpractice claim has lapsed—whichever length of time is greater.
The final category includes documents subject to a “litigation hold,” which exists when there is a pending lawsuit or government investigation. The law firm should retain the documents in this category until the litigation hold expires.
After adopting a document retention policy, it is helpful for law firms to train all staff regarding the new policy and to inform clients of the policy, which can be accomplished in the engagement letter or fee contract. Document retention policies should also afford clients the opportunity to retrieve their documents before destruction.
Additional guidance regarding document retention policies is set forth in ABA Informal Opinion 1384, which provides a helpful list of considerations for the retention and disposal of files, including advice regarding the length of time to retain files under various circumstances. In addition, the Board of Governors of the Connecticut Bar Association has promulgated “file retention guidelines” that, along with the associated commentary, provide a great starting point for Connecticut attorneys in creating a document retention policy.
The guidelines are available at: http://www.ctbar.org/?page=FileRetention.