This post was written by Megan Zavieh and originally published on Lawyerist.com on January 21, 2014.
Voluminous paper and electronic files are not just a hassle to store and manage, but keeping files beyond your ethical obligation to do so can actually be troublesome. You need to know the rules applicable in your state and establish a document destruction policy in compliance with those rules.
Why Not Keep Documents Forever?
Files seem to multiply when put away for storage, filling rooms and gathering dust. Even electronic files have a way of suddenly maxing out hard drive storage capacities. Long-term storage of files can be costly, as physical files need to be maintained somewhere, so either your home’s basement becomes a file room or you pay an off-site storage location based on volume. Electronic files require a home, too, either on physical hard drives or virtual server space, neither of which are free.
Beyond the cost of storage, however, is the fact that a file existing longer than it has to can cause trouble. If a client raises a State Bar complaint against you after the time has passed when you could have destroyed a file, you would be on solid ground to respond to the Bar that you no longer have the client file. This response might lead to a quicker resolution of the complaint. After all, a client or State Bar cannot prove allegations of the misconduct without evidence, and if the file contained the evidence the client would have needed and you followed proper procedures in destroying it, there is no evidence to use against you. However, if you failed to destroy the file as allowed by your Bar’s rules, the complaint may take longer to resolve while the Bar sifts through your file. The logical counterpoint, of course, is that the file might also assist in exonerating you if a State Bar complaint is brought. While this is always possible, the burden is on the State Bar (and in effect the complaining witness) to prove your misconduct, not on you to prove proper conduct, and it is unlikely that materials contained in the client’s file would be more useful to you than to them.
A Formal Document-Destruction Policy Is a Must
Having a formal document destruction policy is a smart move for many reasons. It greatly streamlines the process of analyzing whether each file should stay in storage or be destroyed, because you have already gone through the issues and identified the rules to apply. It can actually reduce your malpractice premiums to have such a policy in place, and it allows you to point to that policy if anyone ever questions why a file has been destroyed. It also provides a basis for setting client expectations on file retention from the opening of a new engagement through the destruction of the file.
A formal policy also allows you to have a routinized procedure for contacting clients and offering files, contacting vendors to assist in destruction, and documenting the destruction process. All of these procedures being routinized reduces costs and headache as well as increases legal protection if ever you are questioned.
Contents of a Formal Document-Destruction Policy
The purpose of a formal policy is to integrate applicable rules with your own actual practices to create a system under which analyzing individual files as they age out is not a cumbersome process. This is not to say that some thought will not be required, and you should definitely not take the approach that the destruction decisions will be left to non-attorney staff based upon the written procedures, but the formal policy should take much of the guess work out of the file destruction.
Any policy should include, at a minimum, the following types of information:
- Procedures for closing files at the immediate conclusion of a matter
- Designation of storage location and means (i.e., hard copies, scanned copies, combination of the two)
- Schedule for periodic review of all files in storage for appropriate time to destroy
- Designation of individuals authorized to make destruction decisions (and these individuals should always be attorneys)
- Guidelines for files which would not qualify for destruction no matter their age (i.e., files with outstanding judgements, or cases involving minor children who have yet to reach the age of majority)
- Details of individual types of documents which should not be destroyed (i.e., original testamentary documents or vital records such as death, birth and marriage certificates)
- Procedures for contacting clients regarding their files before any method of destruction is employed
- Approved methods of destruction
- Procedures for documenting the destruction of all files
Writing a Document Destruction Policy
It is difficult to put forth a “sample” document destruction policy applicable nationwide due to the immense variation in state rules on ethical obligations for file retention, though the basics of one are included below. To put together your own policy, begin with your state’s rules. If you are a member of the Bar of more than one state, pull the rules of each state and lay them out together. Take the strictest rules from each state and meld them into your policy. You may wish you had destroyed a file sooner for practical purposes (see above), but you will not have an ethics problem for your file retention policy if you keep a file longer than required. Alternatively, you could have different policies for matters handled in different states; whether this makes sense in your practice will likely hinge on the significance of the difference in the rules and the volume of cases you handle in different states.
Once you have the rules before you, look at the practices you employ in your office. Are your files paperless? Do you maintain an official file and multiple working files in each attorney’s office? Consider the practicality of your office procedures and the requirements of your state rules.
Then begin putting together your own version of handling files in accordance with your state rules. When the policy is complete, make sure every person in your office who handles client files has a copy and has read it. Review it with your staff periodically.
What Are the Rules about Document Destruction?
While rules vary state-to-state, it is useful to gain an overview of what guidelines exist. Nationally, the ABA spoke to file retention and destruction back in 1977 when it issued Informal Opinion 1384, Disposition of a Lawyer’s Closed or Dormant Files Relating to Representation of or Services to Clients. The opinion stands today as the primary guidance on the subject.
Informal Opinion 1384 refused to set a timeline for destruction of files, but explicitly stated, “Good common sense should provide answers to most questions that arise.” It then set out some key considerations:
- Do not destroy items that clearly belong to the client, such as original documents
- Do not destroy information that the lawyer should realize will be useful to the client in asserting a claim or defense in a matter in which the statute of limitations has not expired
- Do not destroy information that the client may need and not otherwise have in his own possession
- Exercise discretion in determining how long to keep documents, keeping in mind the type of matter contained in the file
- Take extra care to maintain records of trust funds
- Protect client confidentiality when destroying files
- Keep records of what has been destroyed
These considerations highlight why an attorney must make the call on what to destroy; they require the exercise of a certain amount of judgment not appropriately delegated to non-attorney staff.
The most explicit guideline on the time period for file retention is ABA Model Rule 1.15, which states in subsection (a) that an attorney shall maintain records of the client’s funds “and other property” for a period of time after the termination of the representation. The Model Rule puts the time period at five years, but in brackets, allowing states adopting the Model Rules to modify that period accordingly.
Many states have modified the time period of Model Rule 1.15(a). If your state is among those that have adopted this rule in some form, the stated time period is extremely useful guidance. However, it is essential to realize that the time period is not an entirely safe harbor, as the considerations listed in Informal Opinion 1384 and the other guidance issued by the state must also be weighed before files are destroyed.
States which have adopted Model Rule 1.15(a) in some form include:
- Six year retention period beginning at termination of representation: Alabama, Alaska, Colorado, Florida, Georgia, North Dakota, and South Carolina
- Six year retention period plus description of specific classes of records which must be maintained and submitted to the State Bar upon request or court order: Wisconsin
- Six year retention period beginning at final distribution of matter contained in the file: New Hampshire
- Seven year retention period beginning at termination of representation: Illinois, Mississippi, and Nevada
- Seven year retention period plus description of specific types of records that must be maintained and circumstances under which those records must be produced: New York
- Deferral to “applicable law”: Connecticut
California’s Rule of Professional Conduct 4-100(B)(3) closely tracks Model Rule 1.15(a) and imposes a five year retention period “after final appropriate distribution” of funds or property.
Some states have also issued separate ethics opinions post-Informal Opinion 1384 addressing document retention and destruction. This is why you must review your own state’s rules and opinions before making your own policy.
Tell Clients about Your Policy, Up Front
One best practice touched upon by some state opinions is to set out your firm’s document retention and destruction policy in your engagement letter. That way, your clients know from the very beginning how their files will be handled. If your policy changes drastically, you can notify all existing clients of the change in accordance with the provisions of your retainer agreement for altering its terms, but you have no doubt that your clients have been notified at the outset of your policy. This will be useful when the time for destruction comes, as oftentimes we have lost contact with our former clients by the time years have passed since the termination of our representation. If a client cannot be located at destruction time, there is peace of mind in knowing that they were originally informed as to the plans for their files.
Sample Document Destruction Policy
With the caveats above about how all the states have their own rules and ethics opinions, here is a sample starting point for drafting your own document retention and destruction policy. Modify it to conform to your state’s rules and office’s practices to make it a practical and useful tool in your own office administration and risk management.
File Retention and Destruction Policy
Law Office of Joe Brown
Last Modified [Date]
This policy is set forth to memorialize the Firm’s processes and procedures for retention, review, and destruction of client files following termination of representation. It is intended to ensure the Firm’s compliance with applicable legal and ethical obligations to former clients, including the ethical rules of [your state].
File Closing Procedures
Following the termination of representation for any reason, including withdrawal of the Firm from representation, termination at client’s request, or conclusion of the matter for which the Firm was engaged, the client’s file shall be closed. Closing of the file shall be performed by the attorney in charge of the matter or an attorney designated directly by the attorney in charge and entails:
- Ensuring documentation of termination of representation by whatever means is in the file and has been provided to client
- Ensuring all outstanding fees have been received by Firm, client funds have been distributed and final accounting prepared and provided to client
- If termination of representation is because matter has concluded, confirm true finality of matter based upon type of file (i.e., in litigation confirm that final judgment has been satisfied or appeals exhausted or abandoned, in bankruptcy confirm final discharge of debtor, etc.)
- Confirm that client property in file has been returned (with copy retained in file) or if retained in file has been marked as client property for return to client at time of file destruction
- Confirm that all attorneys working on the matter have culled their own working files for any materials which rightfully belong in the Firm’s official file
- Mark file for review when time period for storage (see below) has been reached
At the time of file closing, extraneous documents may be discarded at the closing attorney’s discretion. Such extraneous documents may include notes, drafts, extra copies of documents, hard copies of electronically-available documents.
Storage of Retained Files
During the file retention period, all hard copy files shall be stored at [physical location]. All electronic files shall be housed on [describe the media of choice] at [what physical or virtual location].
Time Period for Storage of Files
All files shall be maintained for a minimum period of [number of years based upon applicable rules].
Materials Not to Be Destroyed
Certain files and materials are not to be destroyed even if they have been maintained for the required period of storage. Such files and materials are:
- Files containing outstanding judgments or structured settlements not yet fully satisfied
- Files pertaining to the rights of minor children until both the children have reached the age of majority and the statute of limitations applicable to any potential cliams arising from the file have expired
- Matrimony files involving ongoing support obligations
- Criminal files should be retained until any period of incarceration and parole has expired
- Estate planning files should be retained until the estate has been distributed
- Materials of legal significance which for any reason cannot be or have not been returned to the client, including but not limited to recorded deeds, vital records (birth, marriage, death certificates), original bills of sale, original incorporation documents, stock or bond certificates, trademark and copyright registrations, and original patents
Procedures Before Destruction
Upon determination in accordance with the guidelines set forth herein that destruction is appropriate, files shall be destroyed in a manner that preserves client confidences. Such manners for hard copy files include shredding, pulping, or any other method utilized by services which regularly in the course of business verify complete destruction of sensitive documents. Such manners for electronically stored business verify complete destruction of electronic materials.
The Firm shall maintain indefinitely (1) a record of the attorney in charge of reviewing the file’s approval of file destruction and (2) verification from the service or individual who performed the file destruction that such destruction was carried out. Such records shall include the date, location and method of destruction employed. Any use of an outside vendor to complete file destruction requires a binding non-disclosure agreement between the Firm and the vendor. A copy of this agreement shall be maintained with the verification by the vendor of the file’s destruction.
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