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THE MAGAZINE      September 2002
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Develop an Electronic Document Retention Policy

Scott Nagel

You’ve likely addressed electronic discovery issues with your business clients, talking to them about the benefits of implementing company-wide policies on electronic data retention and destruction. But are you following your own advice? Your firm may face the same discovery issues that your clients do.

 

If your firm is sued, will you be able to collect all your electronic documents, review them for privilege and produce only those that are responsive and not privileged within 30 days of a request for production? If your answer is no, it’s time to implement and enforce an effective document retention policy.

Keeping track of every byte of law firm data is probably an impossible dream. But a firm can significantly reduce its liability in the face of an electronic document request, if its computer systems are properly organized and maintained.

An effective document retention policy ensures that electronic documents are efficiently handled, and neither retained too long nor destroyed too soon. Other benefits include an increased ability to foresee potential documentation problems before they become unmanageable, better access to all the firm’s electronic data and quicker, more economical responses to in-house reviews and document requests.

If a lawsuit does arise, an effective document retention policy can protect your firm against a claim of spoliation. Courts take a dim view of companies that fail to preserve electronic evidence. Sanctions for the destruction of electronic evidence have ranged from monetary fines to adverse jury instructions and even entry of default judgment.

The Planning Phase

Unfortunately, there is no one-size-fits-all document retention and destruction policy. Every firm must create its own guidelines based on its work flow, the types of data it receives and stores, the cases in which it has been involved and statutory guidelines. Typically, however, the most labor-intensive part of the process comes in the planning stage.

First, you must take a hard look at the information that your firm handles. Then, investigate the laws and statutes of limitations that govern retention periods in your jurisdiction. You may be required to save financial documents for much longer periods than e-mails or standard business records.

Another important factor is the involvement of the firm’s technology department from the outset. You will likely need IT’s help to ascertain exactly what data is being stored, and where it ends up.

It is also important to know the physical limitations of your equipment or to enlist the services of a company specializing in electronic data storage. No policy will be effective if your system’s memory capacity can’t accommodate the retention policies you want to implement.

Drafting Considerations

In the 1988 case Lewy v. Remington Fire Arms Co., the Eighth Circuit reviewed the firearms manufacturer’s document retention policy—specifically, regarding the destruction of customer complaint information. The court set forth three elements to determine whether a document retention policy is reasonable:

• Retention times should correspond to the facts and circumstances surrounding each document. For example, records of customer complaints should be saved longer than records of phone messages or appointments.

• Retention times should take into consideration whether lawsuits concerning specific data have been filed, or are likely to be filed, and the seriousness of the claims. When a company knows or should know that data will be relevant, such data should be exempted from the general destruction policy.

• Retention and destruction policies may not be implemented in bad faith.

The Lewy court’s holding provides a good starting point for drafting and implementing a document retention policy. Your firm may also consider segregating business e-mail and personal e-mail by applying different retention standards.

Execution Pointers: Make Enforcement Consistent

Select one person to be in charge of executing the retention policy. This greatly increases the likelihood that it will be consistently enforced. The same person should also be responsible for testifying regarding the policy should it be necessary.

Once the policy is in place, conduct periodic internal audits to ensure that it is working as designed. Make any necessary changes. If your firm is involved in litigation, it will be much easier to argue that the policy is reasonable if it has been routinely reviewed and adjusted as needed.

Above all, remember that the blind destruction of information pursuant to an outdated policy is potentially worse than having no policy at all. The same is true of a retention policy that is not enforced consistently. Courts do not react kindly to a policy that is only followed when litigation is on the horizon.

Get the Word Out to Each and All

Finally, don’t keep your employees in the dark about what’s happening with the firm’s document management policies. After all, this involves their data. Your people will be an important part of the planning and execution processes.

And be sure to review with staff the legal ramifications of destroying or overwriting information if the firm is involved in, or has notice of, a lawsuit.

While no document retention policy can make your firm completely bulletproof in the electronic discovery process, an effective policy makes it much easier to know what information is in your electronic filing cabinet, and to access that information when it’s needed. The bottom line? A well-drafted and consistently enforced document retention policy will add to the efficiency of your firm’s technology support structure and provide you with another valuable benefit: peace of mind.

Scott Nagel is Director of Client Solutions at Seattle-based Applied Discovery, Inc., which specializes in electronic discovery solutions. He was formerly in private practice, where he focused on complex litigation and products liability.