Client File Retention - Articles

All Content


Posted by: Barry Kolar on May 15, 2014

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.  Never allow anyone other than the client to retrieve the client’s file without written authorization by the client. 

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."

Discussion

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.  You need a policy regarding the storage and destruction of closed 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), but if you have the space to retain them, it is a good idea to do so
• 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.  Never destroy a will file until the person has died and there estate has been fully probated, and do not destroy a file involving a domestic relations matter where the parties had children until the youngest child has attained the age of nineteen.
• 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.
• Assign 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 offsite 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 for one year beyond the date that the last payment becomes due or the youngest child attains the age of nineteen, whichever is later
• 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

• Provide 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 or through a reputable shredding company which provides confirmation of destruction are the best methods 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)