Many of us can look around our office and find things we probably don't need anymore but aren't sure if we should discard them. If you're an attorney, the items in question may be old client files. Largely gone are the days when overstuffed file boxes spilled out of storage rooms and blocked hallways. Still, whether files are paper or electronic, clients expect you to handle them properly, and so does the state bar.
Here are answers to some common questions about retaining and destroying law office files.
Is It Necessary to Have A Document Retention Policy?
Yes, and there's a purely self-serving reason for this: if a client sues you for malpractice, you'll be better able to mount a defense if you still have a copy of the file. It's prudent to hold onto files at least until the statute of limitations for legal malpractice has run -- and remember that the discovery rule might apply.
Besides, your malpractice insurance company looks favorably upon firms with file retention policies. It is well worth having a policy, just for a chance of a reduced premium.
Another reason to adopt a policy on handling closed case files is that attorneys must safeguard client materials and to take reasonable steps to return papers that a client is entitled to when the representation ends, under Model Rules of Professional Conduct 1.15(a) and 1.16(d).
How Do I Create a Law Firm Document Retention Policy?
There's no need to reinvent the wheel when drafting a document retention/destruction policy because samples are available online, including from the New York State Bar Association.
Many records management software packages are available to assist a firm in applying these rules, which can automatically trigger notifications on client files that are candidates for retention processing. A workflow component to monitor and track attorney notification and their response will also be needed in most firms. Remember: different applications offer a range of functions related to processing retention, so your policy and procedures should take into account the particular capabilities of your firm's records management software.
Most law firm records management policies use a matter-centric approach, creating a policy that analyzes individual client files to determine whether they should be retained. While an entire client matter will be considered for retention at one time, both the physical and electronic files must still be well-organized. Even for routine scenarios such as a client requesting their files or a lateral attorney departing the firm, the file must be organized in a manner that enables administrative staff to easily make decisions regarding what should be transferred.
Drafting the retention policy and performing research should be a collaborative process between executive management, records management experts, attorneys, and the firm's IT department.
How Long Should You Retain Client Files?
The answer is: it depends on the type of file. State bars have various rules about the minimum amount of time to keep files. The Model Rules suggest at least five years. See Model Rule 1.15(a). Many states set this requirement at six years, and some set it even further out.
However, for certain types of legal matters, you must keep the files even longer. These include, among others, issues that deal with:
- Estate planning for living clients,
- Trust funds,
- Continuing child custody or support obligations,
- Prenuptial agreements,
- Long-term contracts with continuing obligations,
- Tax matters of certain kinds, and
- Criminal matters.
In some fields such as tax and probate, statutes address how long records must be kept. In the criminal law context, bar associations often recommend hanging onto files for the life of the client, because of the possibility of habeas corpus petitions and other post-trial actions.
Matter closing can be an opportunity to remind the client of the work that was performed and the firm's desire to represent them in the future. In a perfect world, you would contact your former clients and they would come and pick up their files. However, finding a former client (especially one that still owes you money) may be difficult or impossible. Consider putting a brief paragraph about retaining and destroying files in your engagement letter to cover your bases upfront.
How Do Law Firms Dispose of Client Files?
Don't toss old paper files into the recycling bin. Shred them first, preferably using a document destruction company that certifies confidential practices. With electronic files, ensure that the data is completely wiped out and can't be restored. Beforehand, take steps to protect yourself from any claim that you have mishandled client materials.
- Before destroying a client file, make sure an attorney reviews it. Is there any reason why the file should be preserved longer? Are there any original documents in the file, such as contracts, that should be saved?
- Send a letter to the client's last known address stating that the file is about to be destroyed and that the client is welcome to pick it up. Obtain a receipt for any files you return.
- Keep an organized inventory of how you handled each file (e.g., permanently deleted it, shredded it, returned it), and the date of the disposition.
Some experts suggest re-framing our thinking about destroying documents. If the storage cost is low, consider holding onto old files that may have potential use in the future.
Deciding to create a file retention and destruction policy is only the beginning. Your firm will need to prepare to implement that policy through training and allocation of resources.
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