Developing a Records Retention, Destruction Policy
Editors Note: The following article is adapted from materials prepared by Attorney Michael Hall for the March 12, 2004, NHBA CLE program, Law Practice Management. This program is available online, on videotape and audiotape. Contact the NHBA CLE Department at 224-6942 or visit the NHBA-CLE page. The bracketed material adds a reference to the NHBA Ethics Committees latest draft revision of the Rules of Professional Conduct.
THE SIMPLEST POLICY for retention and destruction of client files would be to keep all files forever. However, as time passes and files accumulate, off-site storage becomes necessary and prohibitively expensive. Also, recent developments in computer scanning and storage present new options for file storage. Therefore, decisions must be made about how firms will store and retrieve client files, consistent with requirements of the New Hampshire Rules of Professional Conduct, and those decisions should be put into writing in the form of a document retention and destruction policy for your firm.
Rules of Professional Conduct Relating to Client Files
The Rules of Professional Conduct relevant to retention and destruction of client files are:
- Rule 1.6 "A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation."
- Rule 1.15(a)(1) "Property of clients...shall be held separate from the lawyers own property...shall be identified as property of the client...and (shall be) safeguarded."
- Rule 1.15(b) "[A] lawyer shall promptly deliver to the client anyproperty that the client is entitled to receive."
- Rule 1.16(b)(4) "[A] lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of the client, including...delivering to the client all papers and property to which the client is entitled."
- Rule 1.16(d) "Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a clients interests, such as...surrendering papers and property to which the client is entitled...the lawyer may retain papers relating to the client to the extent permitted by other law."
Third Party Handling of Client Files
Consistent with the confidentiality requirements set out in Rule 1.6, a lawyer may send client files out of the office for storage, microfilming, and scanning, provided the lawyer takes reasonable steps to ensure that the people contracting to do this work will maintain client confidences (see NHBA Ethics Committee Formal Opinion #1989-90/2 and NHBA Ethics Committee Advisory Opinion #1986-87/8).
Ownership of Client Files
"A clients file belongs to the client, and upon request, an attorney must provide the client with the file," Averill v. Cox, 145 N.H. 328, 339 (2000). Although some jurisdictions have distinguished "end product" (pleadings filed in court, correspondence, final contract documents, and other documents circulated by the attorney) from "work product" (attorney notes, drafts, and other working documents) and have limited the clients property interest in the file to "end product" documents, New Hampshire has declined to make such a distinction. Id., and see Sage Realty Corp. v. Proskauer, Rose, Goetz, and Mendelsohn, LLP, 689 N.E.2d 879, 881-82 (N.Y. 1997) and cases cited therein.
In New Hampshire, the only circumstances under which the client may not be entitled to receive the entire file is if the attorney makes a showing of good cause that disclosure would violate some other obligation, such as a promise of non-disclosure made to a third party. Averill, 145 N.H. at 339. Averill also states that because the client owns the file, the client is entitled to the entire original file, and the cost of making a copy for the attorney to retain must be borne by the attorney. However, by prior written agreement, the client may be required to pay the reasonable cost of copying the file. The NHBA Ethics Committee, in a Practical Ethics article, Clients Are Entitled to Their Files (11/19/98), anticipated the cautious approach of Averill on issues relating to ownership of client files.
How Long Must Client Files Be Retained
There is no hard and fast rule regarding how long client files must be retained. An amendment proposed for consideration by the Supreme Court in October of 1997, but not adopted, would have added the following language to Rule 1.15: At a minimum, the substantive portions of a client file, when not delivered to the client, should be retained by the lawyer for at least six years from the date of the last action taken on the file, or beyond any applicable period of statutory limitations on actions, whichever is longer. Disposal of the file should reflect the continuing obligation of confidentiality and the need to provide reasonable notice to the client of the pending or proposed disposal.
The proposed amendment concluded with advice to see ABA Informal Opinion 1384, "for further guidance."
ABA Informal Opinion 1384 (Guidelines for Client File Retention/Disposition 1977) provides as follows:
Although lawyers are not required to keep client files for a specific length of time, the guidance provided by the ABA and the 1997 proposal suggest that files should be retained for as long as they may possibly be of value or interest to the client.
- Unless the client consents, a lawyer should not destroy or discard items that clearly or probably belong to the client. Such items include those furnished to the lawyer by or on behalf of the client, the return of which could reasonably be expected by the client, and original documents (especially when not filed or recorded in the public records).
- A lawyer should use care not to destroy or discard information that the lawyer knows or should know may still be necessary or useful in the assertion or defense of the clients position in a matter for which the applicable statutory limitations period has not expired.
- A lawyer should use care not to destroy or discard information that the client may need, has not previously been given to the client, and is not otherwise readily available to the client, and which the client may reasonably expect will be preserved by the lawyer.
- In determining the length of time for retention or disposition of a file, a lawyer should exercise discretion. The nature and contents of some files may indicate a need for longer retention than do the nature and contents of other files, based upon their obvious relevance and materiality to matters that can be expected to arise.
- A lawyer should take special care to preserve, indefinitely, accurate and complete records of the lawyers receipt and disbursement of trust funds.
- In disposing of a file, a lawyer should protect the confidentiality of the contents.
- A lawyer should not destroy or dispose of a file without screening it in order to determine that consideration has been given to the matters discussed above.
- A lawyer should preserve, perhaps for an extended time, an index or identification of the files that the lawyer has destroyed or disposed of.
[In its proposed revision of the N.H. Rules of Professional Conduct see NH Practice Guidelines or the Summer 2004 issue of the New Hampshire Bar Journalthe Ethics Committee is proposing new language for Rule 1.15 b that sets a six-year limit on financial records regarding clients matters: (b) Records shall be maintained by the lawyer of the handling, maintenance and disposition of all funds and other property of the client at any time in the lawyers possession from the time of receipt to the time of final distribution and shall be preserved for a period of six years after final distribution of such funds or other property or any portion thereof. The lawyer shall maintain the minimum financial records specified in the New Hampshire Supreme Court Rules and shall comply with every other aspect of those Rules.]
Records Retention Schedule ~ Non-client Files
Destruction of Client Files
Opinions of the NHBA Ethics Committee have approved destruction of "hard copies" of client files in connection with long-term storage on microfilm or computers (see NHBA Ethics Committee Practical Ethics Article, Ethical Considerations and Retention of Client Files (3/18/99) and NHBA Ethics Committee Advisory Opinion #1986-87/8, Attachment B).
However, before files are destroyed, all original documents, such as deeds, wills, and photographs should be returned to the client, advises the Ethics Committee. Also, lawyers are required to make sure that the technology used to store client files will allow future access to files as computer hardware and software changes, and to the extent independent contractors are relied upon for scanning of documents and disposal of hard copies, the contract documents and the procedures actually followed must assure client confidentiality.
Notice to Client of Planned File Destruction
Related questions are whether the client must be informed of the plans to store the file electronically and destroy the paper copies, and should clients be given the opportunity to retrieve the paper files? The 1977 ABA Guidelines say, "Unless the client consents, a lawyer should not destroy or discard items that clearly or probably belong to the client." Because the recent Averill case holds that the entire file is the property of the client, it is wise to assume that no part of a clients file should be destroyed without permission or at least notice and a reasonable opportunity to retrieve the file.
According to the NHBA Ethics Committee: The client should first be informed of the disposal plans, with the opportunity to retrieve the file. If the lawyer cannot contact a client, the attorney should publish notice of the intention to destroy all or a portion of his or her files from or before a certain time period (without naming the clients specifically). With the exception of original instruments or other documents of inherent value, destruction may occur in any manner that properly preserves the ongoing duty of confidentiality. The lawyer should permanently maintain an index of files/documents destroyed (NHBA Ethics Committee Practical Ethics article, 3/18/99)).
The NHBA Ethics Committee has succinctly summarized a lawyers obligation with regard to client files: While a lawyer does not have an ethical obligation to maintain a clients file indefinitely, it is important to remember the overriding considerations of confidentiality, proprietary rights, a clients reasonable expectations, and the lawyers duty to avoid foreseeable prejudice to the clients interest. Above all, it seems that the lawyer should take steps to communicate to the client exactly how the lawyer will retain or dispose of the file, and to assure that no portion of the file is destroyed prematurely (NHBA Ethics Committee Practical Ethics Article, Ethical Considerations and Retention of Client Files (3/18/99)).
Therefore, law firm policies for retention and destruction of client files should provide for:
- Notice to client of planned destruction
- Opportunity for client retrieval of original file
- Client consent to destruction
- Long-term storage of key documents
- Permanent storage of documents relating to overview and disposition of case and file