Hoarders: Cleaning Out the Client File Clutter

Vol. 29 No. 4

By

George C. Cunningham is president of PelliGroup, Inc., a records management consultancy located in West Point, Virginia.


Lawyers’ records fall into two distinct categories: business records and case or client files. Many business records, particularly those that deal with money and people, are subject to both federal and state laws that specify how long specific types of information should be kept. Case or client files include everything that you created or accumulated while you were providing service to the client. Case files are the primary focus of this article.

The question is “What do I do with all this stuff?” Perhaps your small or solo practice is being merged into a larger firm. Or maybe, after a long and productive career practicing law, you are shutting down your practice. Or it could be that you are simply running out of file or disk space, tired of paying for storage of all the hard copy you have accumulated, and have so much e-mail and electronic content that you are actually ready to deal with it. This article provides some guidelines for dealing with old client/case files in a way that protects your clients and minimizes your risk.

If you are merging your practice into another entity, you will have to figure out what you are taking with you and what you need to get rid of. Obviously, one of the reasons you are merging is because your active book of business will be a positive asset in the new and larger entity. Hopefully you have been diligent in your efforts to identify and rectify any potential conflicts of interest. But what about the old case files for clients you no longer represent or those that, for reasons of conflict avoidance, you want to divest? And what about your own risk; how do you protect yourself?

In any event, your resolution stands firm to clean it out, to get rid of the stuff that you don’t need, whether it be in paper or electronic form. Here is a strategy for doing so that will meet your needs and the needs of your clients without violating ethics standards.

 

Baseline Requirements

Every lawyer knows about ethics opinions (“Opinions”) and the Rules of Professional Conduct (“Rules”) that tell you what your obligations are as a lawyer and set standards for behavior as a legal practitioner. These Opinions and Rules, generated by the ABA (as in ABA Informal Opinion 1384) and by state and other Bar Associations (as in Wisconsin SCR 20:1.5), range from the very specific to the somewhat vague and may be subject to discussion or interpretation. What some lawyers may not know is that among these many Opinions and Rules are guidelines for your record keeping responsibilities as a lawyer and what to do with your files when you move on or retire.

Whatever your motivation, a number of Rules and Opinions, as well as case law, apply when approaching your project to clean up and clean out old content:

  • Most of what you have created or collected when serving clients actually belongs to them.
  • Before disposing of your old records, give clients the opportunity to take possession of those records to which they are entitled.
  • You need to make a good-faith effort to find and notify clients about pending disposition even if you haven’t done business with them for many years.
  • When you do dispose of records, that disposition should be carried out in a way that protects clients’ interests and the interests of third parties, information relating to whom may be included in those files.

Although old case files may have no immediate perceived value to you, take into consideration the needs of clients and third parties as well as your own needs.

  • Work product. You are entitled to keep valuable work product such as forms, templates, models, and research so long as your process doesn’t create risk for clients or third parties. If the old materials contain some forms or templates that you find valuable, set these aside and redact any information that could identify clients and potentially cause harm to clients or to third parties if later exposed in discovery. Clearly title these so you can find them later, index them, and set them aside in a separate directory. Do this and you will have the start of a very useful knowledge bank.
  • Administrative and practice management records. Generally speaking, if there are no open disputes, clients are not entitled to those records that deal with purely internal issues such as initial conflicts and credit checks, resource assignment, and other administrative matters. You need to check your local Opinions and Rules as this does vary from state to state.
  • Third-party information. Sometimes in the course of your work you will investigate and collect information about third parties. If clients ask for the return of documents, make sure to remove all references to third parties that could be considered private or confidential. You owe a duty to these third parties and must take steps to ensure that you are not putting them in harm’s way.
  • Hard copy vs. electronic/digital content. Many of the old and dusty files will exist as hard copies and will be easy to get rid of or to send to clients. If clients ask for information, they are generally entitled to it so long as the above parameters are observed. How you provide that information, in the rare instances when clients ask for it, is generally a decision between you and the client, subject to your jurisdiction’s Opinions and Rules.
  • What if I can’t find the client? Document each attempt at contact on a spreadsheet. If you aren’t successful in your initial attempt to find a client, do a bit of research (Google and other online sources are very helpful); if this does not yield results, post a brief notice in the legal listings of the major local paper and allow sufficient time for a response. If you have taken reasonable steps to locate and notify the past client and you have documented your process—what you did and when—then you should be able to dispose of the file without a problem.

 

Process

Just like Santa, you want to make a list and check it twice. Review the files and list the old clients and the matters with which you were involved. Make sure the title or description will be meaningful to the client; MOS2-RE981213 may mean something to you, but it won’t mean anything to the client. When reviewing the files, arrange them in alphabetical order by client name so they will be easy to find later and capture the most recent contact information you have on file. Flag any documents that might be of particular interest to clients, such as executed documents having to do with estate planning, deeds, contracts, and agreements. A spreadsheet should do nicely, with headings for Client, Matter, Close Date, Name, Address, Phone Number, and E-mail. And include columns for notes (i.e., when you tried to contact the client, when/if you succeeded, and the decision).

  • Reach out. Contact all clients (e-mail if you have it, snail mail if you don’t) with a list of their matters, and let them know what you are doing. Remind them that in line with your own policies and retention guidelines, as well as the ethics guidelines of the profession, you will be destroying the records at a given point in time. It’s a good idea to confirm the contact and the decision. Remember, if clients do not respond, it may be that they didn’t receive your communication. Most clients will not be interested in getting the old, closed files back.
  • Take action. If clients express interest in getting some documents back (you have already identified the most likely candidates), review the documents. Some jurisdictions allow you to charge clients for postage, shipping, and some related costs, so make sure you know what is permissible where you are/were licensed; if there will be a charge, let the client know about it up front.
  • Be clear about what you are returning. When clients do ask for something, and they know what charges (if any) will apply, recommend the documents that will be meaningful to them. Going through everything and generating complete paper or digital copies costs money and may potentially reduce clients’ interest.

 

Self-Preservation

Check your jurisdiction’s statute of limitations (SOL) that applies to lawyers. Some states have a law that applies directly to lawyers, but in other states a lawyer’s work is covered by a statute covering contracts or something else. Use the SOL as the minimum time limit before starting the cleaning process. For example, if the SOL to which you are subject is five years, it’s a good idea, for your own protection, to keep the files that have closed within the last five years and not offer them back to clients until that time has passed without dispute.

  • Open disputes. Obviously, you must keep all related documents and content if you are involved in an open dispute with a client or a third party.
  • Executed documents. If you are holding any executed documents created as part of wills, estates and trusts work, or deeds, mortgages, or other muniments of title and you haven’t been able to find the client, make sure the documents are registered with the appropriate authorities and document your steps before you dispose of anything if your jurisdiction allows. In many states, such as Illinois, these types of documents must be maintained in perpetuity

 

How to Get Rid of It

Don’t throw it out, don’t tear it in half and put it in a dumpster, don’t give it in raw form to a recycler. Be safe:

  • Paper. Shred all paper documents yourself or witness the shredding and get a certificate of destruction.
  • Electronic files. Either (1) use a data destruction program that meets government or military standards—such programs generally delete the content by overwriting it a number of times; or (2) physically destroy the drive.

There are firms that dispose of both hard copy and electronic information and do it well. If you don’t know of a reputable and certified information destruction company in your area, contact the National Association for Information Destruction for the names of local providers.

 

What Should I End up With?

At the end of your review and cleanup project, you should have a single (hopefully electronic) folder containing a few documents:

  1. your spreadsheet that lists all the matters and contact information, along with the results of your contact efforts;
  2. a sample of each letter or e-mail that you sent at each step along the way;
  3. a copy of any legal notices you posted; and
  4. signed and dated certificates of destruction with a listing of what was destroyed.

If you are not shutting down your practice and you plan on continuing with the practice of law, this whole process can be simplified in the future by including some basic text in your engagement letters. Just notify your clients that you have a records retention policy that is designed to comply with legal and ethical requirements, that you will hold the documents until your retention period has expired, and that you will then be notifying the client to discuss options for final file disposition.

 

This article is not offered as legal advice. Any practitioners who are planning on cleaning out old content should check recent ethics opinions, current regulations, and case law to make sure that the process they are following meets current standards for disposition of client files. In case a question arises, practitioners should check with their local bar association. Some of the laws that govern retention of business records will change from year to year. Practitioners should check to make sure that the time frames they are following are based on current legal requirements.

 

Advertisement

  • About GPSolo magazine

  • Subscriptions

  • More Information

  • Contact Us