How Long Do You Need to Keep Closed Files?

A fair question posed recently on the NW Sidebar blog.

As in Oregon, there is no rule for file retention in Washington. The only exception? Trust accounting records: five years from termination of representation in Oregon; seven years in Washington.

Guidance for Oregon Lawyers

So where can Oregon lawyers go for answers?  The best resource can be found on the Professional Liability Fund website.  Select Practice Management > Forms > File Management > File Retention and Destruction Guidelines.

Files should be kept for a minimum of 10 years as protection against legal malpractice claims. To learn more about ethical recordkeeping practices, see Ethical Guidelines for Client Files.

Guidance for Washington Lawyers

The NW Sidebar post suggests a four step approach:

  • Start with the Guide to Best Practices for Client File Retention and Management on the WSBA website
  • Check with your Washington malpractice insurance carrier
  • Consider the nature of each case (some immigration cases may be “live” 20 years from the time of initial representation)
  • Weigh the possibility of malpractice or discipline claims

In Oregon, the latter drives the minimum 10 year retention recommendation.

Multi-Jurisdictional Practices

Lawyers who practice in both states (or other states) may choose to keep files in conformance with each jurisdiction’s recommended practices or apply the strictest retention requirement.  Universal retention practices are easier to follow and enforce. Jurisdiction-specific retention practices may allow for earlier disposal of files.

What to do Now

Every firm should have documented file retention practices and a file closing checklist. Need a place to start? Consult the Guide to Best Practices for Client File Retention and Management on the WSBA website or use the Professional Liability Fund retention guidelines referenced above and the PLF sample File Closing Checklist.  [Available on the PLF website at Practice Management > Forms > File Management.]

Creating and using a file closing checklist ensures consistency and makes the file retention process easier for lawyers and staff.

All Rights Reserved – Beverly Michaelis -2017

Precautions for Paperless Practitioners

Did you happen to notice the new ethics opinion issued in September 2016?  You aren’t alone, but don’t worry.  Let’s get caught up.

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OSB Formal Opinion 2016-191 addresses a lawyer’s ethical responsibilities in keeping paperless client files and disposing of client property.

Everything Old is New Again

Nigh on eight years ago, I gave some advice on this subject:

  • Inform clients of your digital storage practices.  Explain how you will provide documents to current clients in the regular course of business and in the event a former client requests a complete copy of his or her file.
  • Update your fee agreement and engagement letters to reflect your file policies and procedures.
  • Be prepared to provide clients with a copy of their digital file in a format they can access.  [This may mean physically printing the file.]
  • Establish a retention policy for your digital files.
  • Use security measures to protect client records.
  • Take steps to ensure that documents stored electronically cannot be inadvertently modified or destroyed.
  • Backup, backup, backup!
  • Review the Professional Liability Fund (PLF) practice aid, Checklist for Imaging Client Files and Disposing of Original Documents. This checklist has since been renamed Checklist for Scanning Client Files.  It points out that certain papers should not be discarded after scanning. Examples include any document whose authenticity could be disputed, those with particular legal importance, or documents that only have value or enforceability as a piece of paper.  It also admonishes that original client property cannot be destroyed without consent.

See Beverly Michaelis, “Is It Time to Go Paper-Less?” PLF In Brief (February 2009), available on the PLF website.

What Does the Oregon State Bar Say?

OSB Formal Opinion 2016-191 reinforces my earlier advice:

First, there is no ethical prohibition against maintaining the “client file” solely in electronic or paperless form. But this doesn’t mean your ethical duties are thrown out the window.

Lawyers must safeguard client property, maintain confidentiality of information, and ensure availability of electronic file documents. This means:

  • Taking reasonable steps to ensure the security of electronic-only files.
  • Protecting against destruction of original client documents without the client’s express consent.
  • Retaining records for appropriate time periods, including following the completion of the matter or termination of representation.
  • Considering whether an electronic-only file might present a hardship for clients who need to access and work with the documents in paper form.

Lawyers must also communicate with the client regarding the terms of the representation and relevant developments affecting the representation:

  • The opinion suggests entering into reasonable agreements regarding how you will maintain client files during and after the conclusion of a matter. [Yes, please!]
  • You should also confirm that converting your closed paper file to electronic-only documents does not violate the terms of your retention agreement with the client.

If you use cloud-based solutions for storage of electronic-only files, re-read OSB Formal Opinion 2011-188 or see this post.

All Rights Reserved Beverly Michaelis 2017.

It feels good to be right.  Chalk one up for me 🙂

 

 

 

The Importance of Keeping Complete Client files

Do you keep a complete copy of your client files?  If not, does your reasoning fall into one of the following categories:

 

Let’s consider these arguments individually.

Rationale: I don’t want to store the paper

Agreed!  I don’t blame you one bit.  Talk about inconvenient!

  • You could keep files at home, but no one wants to do that and some of us don’t have the space.
  • You could keep files in your office, but it can look like a clutter bomb went off.
  • This leaves the expensive option: keeping files off-site.

Solution: Scan your closed files

The easiest solution is to stop adding to the problem.  Resolve to scan your closed files starting this year.  Most practitioners will need a scanner for Oregon eCourt.  Put it to work as a file retention tool.

Rationale: Scanning is too time consuming

If your paper files aren’t “scanner” friendly, digitizing them at closing time can be tedious and time-consuming.

Solution: Make your life easier and scan as you go

Scanning paper as you receive it means all file materials are electronic from the start and the work is done automatically over the life of the file.  In fact, if you “scan as you go,” there is no reason not to simply be paperless.

After scanning, paper can be:

  1. Shredded
  2. Given to the client
  3. Kept for a designated amount of time in a general chron file
  4. Kept for a designated amount of time in simplified client file (e.g., dropped into an expanding file folder)

Exceptions may apply to certain types of originals.  See the PLF File Retention Guidelines, available on the PLF website.

Rationale: The court has all my pleadings

This is a specific example of the argument that if someone else has a copy of the documents stored in my file, I don’t need to retain my set.

Solution: Keep it real

No one else possesses your exact client file, as you gathered it, for the purpose you gathered it.

When you decide that it isn’t necessary to keep copies of the documents you filed in court, the medical records used to prove your client’s damages, or some other part of your file on the grounds that “someone else has a copy,” you are taking a huge risk.

Many a lawyer has regretted the decision not to keep records because “they were available elsewhere.”  For example, the lawyer who said he withdrew from a case long before a judgment was entered against his former client.  The lawyer claimed he withdrew, but had no documentation in his file.  The court’s Register of Actions showed receipt of a letter from the lawyer seeking to withdraw, but when a PDF of the court file was obtained, there was no letter.  Maybe the letter never made it into the paper file.  Or perhaps it was missed when the file was scanned.

Regardless, the moral of the story is pretty apparent: anyone (including a court clerk) can misplace, misfile, or lose a document.  Never rely on another person or entity to keep your records.  PLF claim files are replete with similar examples.

In the event of a legal malpractice claim, it may be crucial to prove what you did nor did not have in your file.  And while it may be possible to obtain duplicate records, doing so does not establish they were previously in your possession.

Additionally, defending the practice of discarding part of your file can be quite uncomfortable at deposition or in front of a jury.  Jurors hold lawyers to a high standard and often naturally have sympathy for the plaintiff bringing a claim.  If your testimony shows that you shredded part of your file, jurors may draw the wrong conclusion about your motives.  Play it safe and keep your complete file.

All Rights Reserved [2015] Beverly Michaelis

 

Free Shred Day – Coming Soon to a City Near You?

We hope so!

The Professional Liability Fund has held several successful shred events at the OSB Center, most recently on May 17:

678 bankers boxes shredded

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Stretching the equivalent of 24 school buses parked end-to-end

bus1bus2bus3

Weighing as much as 2 full-grown hippos with 26 stout offspring

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baby h

We are working with Recall, our document storage and destruction provider, to host future shred events in:

  • Salem
  • Bend
  • Eugene
  • Medford
  • Newport or Tillamook
  • La Grande
  • Pendleton

Stay tuned!