It is time to clean out those old files that fill the cabinets, line the halls and occupy conference rooms. Unfortunately, most firms have no written protocol for how long to keep old files. The result is an ad hoc system in which files are either kept forever (at significant expense), or destroyed on a case-by-case basis.
Many times, Murphy’s law kicks in and the one file that’s destroyed is the one file that an attorney needs later. Worse yet, the unhappy client wants to know why her file was destroyed while others were maintained.
The client file is one of the most valuable tools in defending against a legal malpractice claim. More often than not, the file dispels accusations of exaggerated neglect or error. Files confirm what was done and what was not. And, under Georgia law, once a claim has been made against the lawyer, any privilege shared by the lawyer and the former client is typically waived, and the lawyer may use the file to defend against claims.
Computers (and the "cloud") have changed the extent and amount of actual paper files that attorneys maintain. However, it has not lessened the need for written law firm practice protocols and procedures for document/file maintenance. Oddly, the existence of a written policy on document/file maintenance is as important as what the policy is.
The bottom line is that the maintenance and retention of files is a critical issue in the modern-day practice of law. Here is a start.
Have a written policy
The most important aspect of a document retention policy is that it is written and is provided to all employees at a firm. An undocumented ad hoc document retention policy does more harm than good. Instead, law practices should decide exactly what their policy regarding document and file retention will be.
A written policy ensures consistency among all law firm personnel. It avoids unnecessary misunderstandings with clients, courts, the bar and others. Basically, a written policy will help ensure that everyone is following the same plan and storing materials in the same way.
If the law practice does not have a current document/file retention policy, or if the law practice is changing or modifying the existing document/file maintenance policy, then the new protocols should have an effective date. This clearly defines a moment in time when the new policy applies. It also affords clients and other interested parties an opportunity before the effective date to express concerns or request modifications as it applies to an individual case or situation.
Once you adopt a document/file retention policy, communicate it. First, communicate it to all personnel of the law practice. The most important people to know and understand the document/file maintenance procedures are the people who have to actually follow them. This may mean training in addition to a written protocol or procedure.
Second, communicate it to clients. For new clients, include the document/file maintenance protocols in the engagement letter. Typically, the best way to accomplish this is some standard language in the engagement letter or fee contract with the written policy on record retention attached.
For existing clients, this means separate correspondence advising of the adoption of specific protocols and procedures for the maintenance and destruction of files.
For former clients, law practices must make a choice. They can either attempt communication with every former client, or allow for former clients to continue to maintain the files.
In all situations, clients should be afforded a choice before any actual document destruction occurs. Specifically, clients should have the option to retrieve their files before destruction. For clients who have consented to the destruction of their files pursuant to a written document/file maintenance policy, there is no problem. For clients who have not, the better practice is to maintain the files.
Written document/file maintenance policies are the first line of defense for a law firm practice’s files. This is true regardless of whether the request for firm documents comes from the bar, the government or in discovery. Document/file maintenance policies should be written with production in mind—production to personnel, clients and third parties.
How long to keep materials
For purposes of document/file maintenance policies, there are two types of documents. First, there are document that have special legal significance. These documents include things where the original makes a difference. Some examples of these documents include wills, leases, purchase contracts, settlement agreements, etc. Generally, the better practice is to either keep these documents indefinitely, or return them to the client. If the latter, confirm the client’s receipt.
Then there are all other documents. The challenge here is to balance the costs of document/file maintenance with the risks of destruction. Some believe that digitized storage largely makes this issue moot. However, the costs of e-discovery have proven to be significant. The issue remains important regardless of whether files involved are paper or electronic.
There are several factors involved in deciding how long to keep files. The most significant factors revolve around exposure: exposure to the law practice (through a legal malpractice claim or a breach of fiduciary duty claim) or exposure to the client (as a result of the legal services provided). The latter can vary depending on whether the representation involved a client like a minor or an entity like a bank. The former can vary depending on the term of agreements prepared during the representation or obligations undertaken.
The most commonly accepted time for document/file retention is 10 years from the date the representation ends. The best practice, again, is to notify clients in the file closing letter of the law practice’s document/file maintenance policy. Prior to destruction, the best practice is to send one more notice (attaching the document/file maintenance policy) advising the client that the documents will be destroyed. This last correspondence should include a specific date by which the client must notify the law practice if the client wants the files.
As previous articles have addressed, attorneys have important duties to maintain client confidences. These duties manifest themselves in different ways in connection with document retention and destruction.
Client files containing highly sensitive information should be maintained in a secure manner. In destruction, client files cannot simply be dropped in the trash. Attorneys have an obligation to take reasonable steps to assure continued client confidentiality—even in the file destruction phase.
Finally, the best practice is to document the file maintenance and destruction process. This means document the policies that apply. Document the client’s consent by including the policies in the engagement letter or fee contract. Document the notice by including it in the file closing letter. Document the final notice before destruction happens. And finally, document what was destroyed and when.
J. Randolph Evans and Shari L. Klevens are the authors of Georgia Legal Malpractice Law, published by Daily Report Books.