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Retention Policies and Requirements File
retention is a frequent subject of inquiry by lawyers seeking advisory
opinions from the Director’s Office.
Many lawyers are surprised to learn that the ethics rules do
not contain a statute-of-limitations-like deadline after which files
can be discarded without fear of client retribution.1
Even more are astounded at the complexity of the ethical
issues associated with file retention and destruction procedures. Ethics
Rules and the The
obligation to retain client files emanates from Rules 1.15 and 1.16,
Minnesota Rules of Professional Conduct.
Rule 1.15 obligates lawyers to maintain complete records of
all properties of the client coming into the possession of the lawyer
and to promptly deliver when requested those properties that the client
is entitled to receive. Likewise, Rule 1.16 requires lawyers, upon termination
of the attorney-client relationship, to surrender all property that
the client is entitled to receive.
Neither of these rules, however, provides any guidance or insight
about the duration of the obligation to return client property or
whether it is ever appropriate to dispose of client files. In
1977, the However,
in advising lawyers just how long client files should be retained,
the For
many lawyers, the prospect of having to cull documents from closed
files before destroying them undoubtedly made permanent file retention
more attractive. In addition, obtaining client consent to destruction
years after the representation has terminated is in and of itself
problematic in today’s mobile society.
Although the advice was well-intended, it proved unworkable
for many lawyers. The
Restatement Position More
recently, the American Law Institute (ALI) addressed file retention
obligations in its Restatement of the Law: The
Law Governing Lawyers (1998).
Section 46 of the Restatement
requires lawyers to take reasonable
steps to safeguard documents relating to the representation of
a former client. The comment to this section explains that ALI’s reasonable steps
standard does not require lawyers to preserve client documents indefinitely.
The obligation to safeguard client documents continues only
as long as there is a reasonable likelihood that the client will need
the documents. More importantly, it advises that documents
that are outdated or no longer of consequence can be destroyed. Lawyer license to destroy outdated client documents
is also referenced in connection with a former client’s right to retrieve,
inspect or copy file documents. Failure
by the client to assert the right to inspect or copy files during
the representation does not bar later enforcement of that right unless
“the lawyer has properly disposed of the documents.” The
Restatement position strikes a more preferable
balance between the lawyer’s obligation to safeguard client documents
and the likelihood of the client’s continuing need for a particular
document. The Restatement replaces the ABA’s “documents the client may reasonably
expect will be preserved by the lawyer” standard with one that is
less subjective in nature, and permits lawyers to gauge a client’s
continuing need for a document on more objective factors such as the
applicable statute of limitations, tax and other governmental regulations,
as well as the lawyer’s experience with other similar clients. Retention
Policies and Practices The
safest and most conservative file retention policy is one that retains
all client documents indefinitely.
Advances in document imaging and indexing, as well as the comparatively
inexpensive cost of electronic document storage, have caused a number
of firms to institute such policies.
The decision of many of these firms to permanently store at
least an electronic image of all client documents has been driven
more by their own need for client document access or to provide a
needed service to clients, than the ethical obligation to safeguard
client files. Obviously,
electronic imaging and permanent storage of all client documents is
not an option for every lawyer, nor is it ethically necessary. For these lawyers, the goal is to determine
retention periods for client files that meet or slightly exceed a
client’s reasonable anticipated need(s) for the file documents. Criteria warranting consideration include statutes
of limitations and other substantive law deadlines or time periods
relating to the file, tax laws and other governmental regulations
applicable to the client, and whether the file includes original documents
that are intrinsically valuable (e.g.,
stocks, bonds, notes, deeds, wills and trusts).
Lawyers must recognize that a prescribed retention period for
files in one area of the law may be insufficient for another. Retention periods should reflect lawyer experience
and practice in accessing closed file information in a particular
area of law. Client
originals, especially those with intrinsic value, always pose complications
in formulating file retention policies.
These problems can be minimized by file organization procedures
that account for client originals.
(See e.g., Frans & Kopka, “Records Management
& Retention Policies for Law Firms,” 55 Bench & Bar 29 (April 1998), which recommends developing a process
for separately maintaining client originals.) The originals can either be returned to the
client at the conclusion of representation, or if necessary, retained
when the remainder of the file is destroyed, without having to undertake
an entire review of the file(s). File
organization policies also simplify the administration of file retention
programs in their differing retention periods.
A comprehensive sample file retention policy can found at Nemchek,
“Records Retention in the Private Legal Environment: Annotated Bibliography
and Program Implementation Tools,” 93:1 Law
Library Journal 7, 41 (2001). Another
critical component of file retention policies is notice to the client. Notice can be provided to the client in the
retainer agreement2 or at the conclusion of the representation in
the form of a disengagement or termination letter.
Clients should be apprised of the retention period applicable
to the client’s file and the firm’s policy with respect to original
client documents. Client notice
of the firm’s file retention period may render client demand for documents
after expiration of the retention period unreasonable, or at least
less reasonable. Finally,
all file retention policies need to take into account the lawyer’s
own need for the file in the event of a malpractice claim.
In order to provide an adequate defense, most malpractice carriers
insist that the lawyer retain a copy of the client’s file for a prescribed
minimum period of time. Insurer
experience and insight into the life expectancy of a closed client
file can be a valuable yardstick in developing a file retention policy.3 NOTES |
