Practical Risk Management: Attorney Files and Records

Posted March 5, 2016; ©David Jargiello 2016 All Rights Reserved.

“Filing” (electronic and physical) is the bane of legal practice … mundane, complex, mission critical and source of liability all at once. In no particular order, some of my observations and suggestions follow below:

In my view, one of the core “files and records” problems on an industry-wide basis can be stated as follows:  many lawyers, regardless of the size of their firm, the “sophistication” of their firm, their area of practice, or their years in practice, do not fully appreciate that:

1 – The files (other than work product) belong to the client not the lawyer or the law firm;

2 – The obligation to maintain client files and records is incumbent on the lawyer as a matter of professional responsibility (i.e., that while lawyers can delegate the mechanical responsibility of “filing” they cannot evade the substantive professional duty to keep a “record” of their representation); and

3 – Creating a personal “mashup” of 1 years’, 5 years’ or 10 years’ worth of electronic material on a c:drive, thumb drive or similar media does not constitute “keeping a client file” within the bounds of the duty of care.

Thus, education coupled with a “top-down” firm culture of careful record keeping is always a first order of business in this area.

Of course, the flip side of the “filing” coin is “document retention.” In purely conceptual terms, a document retention policy is sound risk management practice for law firms of all shapes and sizes. Most law firms have either implemented a retention policy and program or are in the process of doing so. On their face, such policies are neither hard to draft nor hard to come by, and at their core they all say the same basic things:

**The management, retention, and disposition of client records are important things for which lawyers (not staff) are ultimately responsible and liable;

**There are bona fide professional responsibility and professional liability issues associated with these activities;

**There are practice area-specific laws regarding retention periods (e.g., tax laws, estate planning laws, etc.) and the firm should know what they are;

**It is not only OK, but a best practice to discard documents after a certain period of time, and

**Before throwing anything away, the firm must make a considered, professional judgment that retention isn’t compelled by a reasonably anticipated discovery demand, promises to the client, or the objectively reasonable expectations of the client.

That said, the practicalities of document retention are extraordinarily challenging and a fertile source of significant professional liability loss across the industry.

As one example of the latter, the records departments of many law firms I am familiar with are choked with partners’ personal income tax, personal business and other records, along with generations of Christmas cards and other memorabilia that are simply not part of the law firm’s business operations. While a law firm may be compelled to retain such material as an internal political reality, steps should be taken to distinguish them from firm business records and retention protocols. Likewise, records departments often find themselves mired in business records of dubious value. For example, is it really necessary to retain decades worth of FedEx airbills?

That is not to suggest that such a thing is irrational or incorrect on its face. Quite the contrary. The point is that a law firm – like any business – should make reasoned judgments as to what does and does not constitute a business record worthy of retention rather than flood the records machinery with chaff.

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