A records retention schedule determines how long your firm keeps its files. It is crucial to establish a proper retention schedule, and adhere to it so that you don’t end up overpaying for file storage, cluttering your system, and exposing your firm to unnecessary risk.
The first step in creating a records retention schedule is compiling a list of firm records. A law firm’s client matter files might consist of attorney notes, correspondence, and pleadings. The same firm will also have documents that exist outside of client matter files such as administrative, HR, personnel, and accounting records. Make a list of all of these potential file categories.
There’re different ways a firm can organize their retention schedule. Many firms choose to organize theirs by area of law. Your firm might want to go broader, and group by matter type such as transactional matters vs. litigation matters. Or, maybe one rule for all client matter records, which I like to call “one rule to rule them all”. Firm administrative records will likely have their own record types such as billing files, timesheets, committee minutes, etc.
Partner with your general counsel or managing committee to determine your retention periods. All of your client matter files can have one retention rule, or you can assign rules based on the type of matter.
Don’t rely on ad hoc retention decisions by lawyers as they are difficult to defend if you’re brought to court over your records management practices. Having policies in place that adhere to compliance regulations provide a lot more protection.
The most common way to calculate a law firm matter retention period is to use the matter close date. For example, matter close date + 5 years = the total retention period required for your matter files.
Estates and Trusts, and family law don’t use a matter close date. The age of majority of the child or another trigger can be used instead. Administrative files commonly use either a calendar or fiscal year end date to calculate retention. Personnel records retention should be derived from an event like when an employee is terminated.
There are risks to over retaining and under retaining that you must consider when you calculate retention periods. Over retaining can become a liability if matter records are kept too long. Under retaining can be dangerous if client and matter records are destroyed before they meet their legal retention period requirements.
For example, a matter has been closed for over 15 years, and the client is unaware of your firm’s retention policy. The client has destroyed their records based on their retention schedule. New litigation is brought before them, and it references documents that they had legally and ethically destroyed. Unfortunately, your law firm still has copies and is at risk because you didn’t destroy or return the client’s records on time.
Before you get started on your firm’s retention schedule, take the time to list your file types, decide on an organizational system, and understand the risks surrounding your records. If you need help creating your law firm’s retention schedule, sign up for a meeting with me. I can help you get started. Come back next week to see an example of a retention schedule.