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Client File Management and File Retention
How much time do you spend looking for a file? How much time do you spend rifling through files to find a particular document or the address of opposing counsel? How much time do you (or your staff) spend filing? Most likely your answer will be, "too much." The law business is a paper-intensive business. If not managed properly, the paper will overwhelm any filing system you may have in place. Software applications such as word processing applications, document managers and case management systems, provide a way to tame the paper-tiger and can reduce the amount of time spent searching for and rifling through a file. But, as with any system in the law office, good manual systems must be in place in order for the automation of those systems to be successful. And, as is true with any system, the elements of consistency, discipline, development of procedures and compliance with those procedures are necessary for the system to work.
But, beyond improving efficiency, there are ethical and malpractice considerations relative to client file management. The attorney has a duty to preserve a client’s confidences and secrets. Satisfaction of this duty extends to protecting the documents and materials which are obtained or created in the representation of the client. Certainly, a standardized method of labeling client files, contemporaneous filing and returning documents to files and files to their proper location are essential to ensuring protection of client confidences and secrets, appropriate identification of files and the preserving of client property.
File Set-Up - Physical File
File set-up (the set-up of the physical file folder) should be consistent. Files should be named consistently by name or number or a combination of both. File labeling should be consistent for all files in the office. All files should be set up to include various folders for the different types of documents that are maintained there; i.e.,
• client information
• medical records
• attorney notes
Note: Documents, attorney notes and other correspondence that belong to the firm and that are not appropriate to turn over to the client at the end of the representation should be filed in a separate folder in the event the client file is to be turned over immediately. This will enable the attorney or staff person to easily purge the file of these documents prior to turning the file over to the client.
File Set-Up (Electronic File)
The same consistency should also be present in the electronic filing (saving) of documents within the firm’s word processing system. The firm should discuss and agree upon a standard protocol for saving documents so that they can be easily accessed by all of the users in the firm. A simple protocol could be as follows:
Attorney name/client/matter name (or number)/correspondence/letter, date.doc
You might choose other protocols which start with client name or document name or type. You may also create a forms file for documents that can be re-used in various matters. Regardless of the protocol, it is important that all users understand the protocol and consistently name (save) their documents accordingly.
It is also helpful to place the file name on the bottom of your documents. This helps in retrieving documents within the word processing system; it expedites filing (particularly when a client has more than one matter) and assists in posting the cost of copies or postage to the proper client account.
Filing should be performed as a task is completed or at least by the end of the day. Documents should be filed in reverse-chronological order. All documents or files that are ready for re-filing should be placed in a central location (if files are centralized) or the secretary’s work area (if files are decentralized) for re-filing.
Scanning of incoming documents into the client’s computerized file should be considered. This allows for a complete electronic version of the client’s file and reduces the need to pull the physical file to review a document or file status.
Although housing active files in a central location is usually recommended, it is many times not practical because of the configuration of office space or lack of a central space to house all of the firm’s files. Whether files are centrally located or scattered throughout the office, a file check-out system should be in place so that files can be easily located. The use of a check-out card indicates that the file has been pulled intentionally (vs being mis-filed), when the file was pulled and by whom. A file check-out system may also be a part of the firm’s central file tickler system.
The duty to protect client confidentiality extends to the management of client files. Attorneys and staff do not always realize that an office environment where files and documents take up every available counter and desk top is not only inefficient and chaotic, but is also exposing the firm to risk of compromising client confidentiality. In order to ensure that client confidentiality is not compromised,
• Filing should be performed daily.
• Files not being worked on should be housed in filing cabinets.
• Client files or documents should never be left in public areas or conference rooms.
• Persons not associated with the firm should not be allowed the use of attorney offices or firm conference rooms until those areas have been purged of all client documents and files.
• Client information should never be released without obtaining the client’s written consent and the responsible attorney’s authorization to do so.
File Status Checklist
Use of a file journal or File Opening Checklist will enable the attorney to quickly ascertain the status of the file. The checklist should indicate all of the critical dates associated with the file. Tasks, activities or events identified at file opening which are required to "work" the file to completion and their associated due dates should also be indicated on the checklist. The checklist form should have a place where the tasks can be checked off as having been completed and by whom. Events such as requests for records, receipt of same, witness contacts, meetings with the client and any other pertinent information can be listed on the journal or checklist. The journal/checklist can be color coded to allow for easy access.
Client File Retention
There are two sensitive areas of file retention - the turning over of files to clients and how long to retain files once the representation is complete. There are both ethical and malpractice considerations.
Turning Over the File to the Client
The firm’s file retention policy should address and instruct attorneys and staff as to the circumstances under which client files or information can be turned over to the client or released. Such a policy should include the following:
• Client files should be turned over promptly at the client’s request.
• Authorization to turn the file over should be obtained (if possible) from the responsible attorney prior to turning over the file to the client.
• The client’s file should be organized so that documentation or notes which belong to the firm can be easily removed from the file in the event the file has to be turned over immediately.
• A copy of the client file should be made prior to turning it over to the client. This copy is for the firm’s records.
• Original documents and unique items (photos and personalty) should be returned to the client.
• A receipt listing the file contents and property returned to the client or turned over to new attorneys should be signed by the client and retained by the firm.
The Duty to Maintain Fiduciary Records
ABA Informal Opinion 1384 (31477)
"A lawyer does not have a general duty to preserve all of his files permanently. Mounting and substantial storage costs can affect the cost of legal services, and the public interest is not served by unnecessary and avoidable additions to the cost of legal services. But clients (and former clients) reasonably expect from their lawyers that valuable and useful information in the lawyer’s files, and not otherwise readily available to the clients, will not be prematurely and carelessly destroyed to the clients’ detriment."
A file retention policy should address a number of issues relative to the disposition of client files. The most important of these is the way in which client files are closed or moved to inactive status and the destruction of files.
Practice Management Considerations - Closed File Procedures
A file closing policy should address the following elements:
• A File Closing Letter should be sent to the client at the end of every representation stating that representation is terminated and the file is being closed.
• Should be sent immediately after matter is closed
• Should explain any remaining duties of client or attorney
• Should include a final bill
• Should include original documents
• Should contain information about how long file will be retained before it is destroyed.
• May include client survey requesting the client’s opinion on the service received.
• Prepare the file for closing (See File Closing Checklist)
• Be sure all original documents have been filed or recorded.
• Prune file before file is closed.
• be sure all original documents have been returned to the client
• check to see if any documents should be placed in the office form file.
• check to see that all duplicate documents have been removed; all documents have been filed and all loose documents braided down
• public documents need not be retained (i.e., pleadings, deeds and probated wills)
• private documents should be retained in entirety for retention period (i.e., discovery, correspondence, memoranda, client communication regarding disclosures, correspondence, telephone conversations, and memoranda explaining the nature, extent, manner and options of legal services, etc.)
• attorney should use his or her discretion as to what should be retained in the file and how long the file should be retained based upon his or her experience with the client and case facts in order to be able to successfully defend him or herself against any future malpractice claims
• Check to be sure a final bill and file closing letter has been sent.
• Be sure all future docket dates have been placed on the calendar.
• Be sure a destruction date has been assigned and placed on the calendar.
• Assignment of a closed file number:
• use a number other than the file number - a closed file number will simplify the filing of closed files in the order they are closed. Reshuffling files on shelves or in boxes to accommodate files closed later than others is eliminated.
• using the year as the first two digits or last two digits will help identify how old the file is.
• files can be placed on shelves or in boxes in numerical order
• Development of closed file inventory information; i.e.,
• file/matter name,
• responsible attorney
• engagement date,
• termination of representation date
• date file is closed (internally),
• closed file number
• closed box number;
• closed box location; and
• destruction date, if any.
• Choose off-site storage in a storage facility.
• Develop a file retention/destruction schedule
• Suggested period for retention of client records is 10 years.
• Suggested period for retention of escrow and trust account information is 5 years.
• Exceptions to retention schedule may include:
• will and estate matters
• client (legal) disability such as age or incapacity
• real estate matters
• contracts, mortgages and other agreements that are still being paid off at the end of ten years
• uncollected judgments
• files that show a tax basis in property - retain until property is sold or transferred
• criminal law cases - should be kept for one year after criminal is released from custody
• support and custody cases - retained as long as obligation remains
• corporate books and records - retained indefinitely
• adoption files - retained indefinitely
• files of problem clients
• Repeat: Attorney should use his or her discretion as to what should be retained in the file and how long the file should be retained based upon his or her experience with the client and case facts in order to be able to successfully defend him or herself against any future malpractice claims
Practice Management Considerations - File Destruction
• Notification to client of the firm’s intent to destroy the file and the scheduled date of destruction
• A Fee Agreement or Engagement Letter should inform the client that you will be destroying the client file and when it will be destroyed. The client’s signature on the letter provides client consent.
• A letter should be sent to the client notifying of file destruction (if separate from closing letter). Destruction date should be established and diarized.
• Protection of client confidentiality
• Files should be destroyed in a manner that continues to protect client confidentiality and ensures complete destruction of the item. Shredding of documents in-house is best method of file destruction
• Maintain a permanent record for all files that are destroyed (see closed file inventory information for type of information to be maintained)
• Remove certain documents prior to destruction and maintain in the firm’s permanent client file
• Copy of letter concluding legal representation
• Copy of letter notifying of file destruction
• Original retainer agreement
• Original New Client Information Sheet and File Opening Checklist
• Any other critical information (based on client/matter)