Does your firm have a File Retention and Destruction Policy?
If not, you’re running a risk of a Bar complaint or malpractice claim – and you might be in violation of your state’s ethics rules.
Some states – Michigan, for example – require all practicing attorneys to have a formal policy for file retention and disposal. And all states require firms to retain records of client trust accounts for a minimum period (usually 5-6 years).
File retention begins by knowing how long to keep files after they’ve been closed. The ABA suggests five years. Your state might say differently.
Once you’ve identified the applicable period, you should develop a File Retention Policy. An effective policy addresses different types of cases, as well as details like file pruning and recycling.
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10 Tips for Creating a File Retention Policy
- Know your state’s rules. ABA Model Rule 1.15(a) says lawyers shall maintain records of client funds and other property for five years after representation ends. What is the rule in your state? Attach a copy of the rule to your File Retention Policy. Remember: these are minimum periods. Some files should be kept longer.
- Have a procedure for managing files. Who is in charge of the system? How are files moved from active to closed status? Where are closed files stored? In what format? Create a Master List of closed files in storage. Prepare a list of documents that should never be destroyed (original wills, vital records, etc.).
- Retain case files at least until the statute of limitations for legal malpractice has run. Add two extra years just to be safe.
- Some files should be kept longer. Create guidelines for which files should be kept beyond the minimum period. Matters involving minors or incapacitated parties may need an extended retention period. The same goes for real estate and business files. Tax and financial records should be kept according to Internal Revenue Service standards. Other files – because of client requests or special requirements – should also be retained longer.
- Go paperless. Scan paper documents to create electronic copies. It will ease the storage burden and save time and money.
- Identify a destruction date. Periodically review closed/stored files to confirm the destruction date. Write that date on the physical file. Enter it into your case management system. Organize closed files. Tell clients how long their files will be retained.
- Give clients a copy of key documents in closed files. How are clients notified when their files are closed and/or destroyed? If a client requests their file and is entitled to it, provide a copy. If the client asks for their file and you still have it although the retention period has passed, turn it over. Don’t destroy it. Lawyers have gotten into trouble for doing so.
- Be careful with electronic data. Consult an IT professional about disposing of information on hard drives and case management software. Some systems can be pre-programmed with a specific purge date. What about data stored in the cloud? Make sure you understand how digital data is retained, managed and deleted.
- Dispose of closed files properly. This doesn’t mean simply tossing them in the dumpster. When you discard files, take preventive measures to avoid disclosure of confidential information. Shred paper files. Consider using a vendor that specializes in document destruction. Do they understand the confidential rules unique to legal records? Does your state have a policy on recycling case material? Do your research before putting files in the recycling bin.
- Prune files of reusable work product. There is no need to reinvent the wheel for every new matter. Remove pleadings, briefs or memoranda that might be useful later. Letters can be repurposed as templates. Real estate title examination reports can be reused in future refinancings or conveyances.
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