Technology Tames the Records Beast

It is a lawyer's ethical duty to protect all documents on behalf of clients. Failure to keep files safe is a failure in the overall duty to act competently in the best interests of a client. This can create a problem, especially with small firms. Now, however, technology can be a lawyer's ally in this battle.

It is a lawyer's ethical duty to protect all documents on behalf of clients. The American Bar Association's Rule of Professional Conduct 1.15 requires that client property and files be "appropriately safeguarded." The rule stipulates no minimum time that this safeguarding must be done. Failure to keep these files safe is a failure in the overall duty to act competently in the best interests of a client. The rules and specific time periods for storing or destroying client files vary by jurisdiction. Some states, for example, require a lawyer to securely store a client's file for 10 years after completion or termination of the representation unless lawyer and client make other arrangements.

This of course can create a problem for a small law office, where storage space will be at a premium. Even a solo practitioner can accumulate a dozen bankers' boxes of case files a year, and larger firms can literally fill thousands annually. Until the past decade, firms either allowed boxes of paper documents to clutter their office space, or relied on outside document management and storage companies to handle archiving and security of files. These companies were tasked with labeling and storing the boxes according to some standardized system, whether the firm devised it by matter or the storage company applied it by use of bar codes.

Now, however, electronic technology is the lawyer's ally in taming the records beast. From generating electronic files on personal computers, to scanning of paper files, to storing electronic records in a remote "cloud" location, computers have made the issue of records retention more manageable – yet at the same time more complex. Particularly in terms of record safeguarding, law firms must be alert to the perils as well as the promise that electronic technology brings to record management and retention.

Scanning Systems

A first-level records management strategy is to scan everything but important originals like contracts, keep the scanned electronic files in multiple locations for security, then shred everything else. As always, before embarking on such a strategy check the rules and specific time periods in your jurisdiction for storing or destroying client files. If stipulated storage time has lapsed, destroy the paper files by shredding the hard copies through the services of a company that assures security in the shredding process. The scanned copies create a file database that is easily searchable, saving both time and money. And of course, it greatly reduces the inconvenience and expense of paper document storage. So long as there is compliance with jurisdictional rules, it is an excellent solution for the smaller firm.

Electronic Systems

For large inventories of electronic files, firms need to understand file management in the contexts of their technological environment and how that environment is structured and operated. The natural assumption is that technology is up to date, and that it is being properly backed up and archived. It is a given that every law firm should be backing up electronic data regularly – every day, if at all possible – and storing backup data files off site. This site should preferably be in another city or region, to mitigate the impact of widespread disaster. It also goes without saying that there should be clear requirements for what is backed up and how often the backup procedure is done. As key elements of their electronic systems, firms should verify backups and test the ability to restore files. Make sure the entire procedure works: physical transfer from the backup storage facility, as well as electronic transfer over the Internet. Examine data security and encryption procedures to make sure that electronic transmission of backup files is protected from hackers or other security breaches. A data protection vendor should provide the firm with software that manages the storage inventory and integrates it with the vendor's own filling system. Elements of an effective system should define document types (electronic or paper, historical record or temporary file), clearly stating document retention authority by category type, indicating the length of time for which different kinds of documents should be retained, and stating the necessary time period for retention.

Discovery Systems

Since 2006 the Federal Rules of Civil Procedure require producing not just paper but all electronic documents and data for trial. Defendants and their counsel must carry out this duty to preserve and provide electronically stored information (ESI), or face penalties from the court. ESI can encompass a huge number of documents. One gigabyte of ESI can equal 75,000 hard copy pages, and the largest lawsuits may require production of millions of paper page equivalents. Ediscovery software can manage this process by analyzing documents required for litigation discovery in a fraction of the time for a fraction of the cost when compared to using lawyers for the task. Some electronic search programs not only find documents with relevant terms at high speed, they extract relevant concepts and deduce patterns that would have eluded lawyers examining paper copies. The essential point is that electronic files are just as valid and as necessary as paper ones, and much easier to access and manage. Both client and firm benefit from effective eDiscovery system use.

Cloud Systems

Cloud computing is the latest evolution in electronic document management. In this system, software and servers are owned by service providers and reside in a remote "cloud" location. The law firm that uses cloud computing purchases Internet-based document management or other programs, but does not control storage or reliability. This can be a problem because cloud computing services have already suffered major service breakdowns that make documents and programs unavailable – particularly if specialized files or software are not backed up on different servers. Although no major cloud computing data breaches have been publicized, that possibility exists. The firm that uses cloud computing does so knowing it may have connection, security or reliability problems. It's a risk that requires careful evaluation.

Administrative Systems

Taming the records beast through electronic methods goes beyond the issue of client records and can encompass the firm's own administrative documents and files. Two applications in particular, both of them focused on client relations and service, illustrate the efficiencies that electronic systems bring. Client Relationship Management (CRM) Software. Shared CRM databases on computer desktops can make available to all firm members the marketing information and service needs for any client or prospect. This is the type of information that used to be stashed away in individual Rolodexes and address books, or in hard copy marketing files. CRM databases are populated by entries into data templates that often are customized according to each firm's needs, with data fields incorporating information that covers both clients and contacts. Information can be entered and viewed by anyone authorized to do so. The idea is to free client service and client development from compartmentalization and place the emphasis where it belongs – on the client or prospect. For the investment in CRM to be worthwhile, there must be a standard classification system for every item that is in a client or prospect record. Data and records cannot be created haphazardly and changed after the fact – effective records management requires planning beforehand and consistent application once the system is in use.

Knowledge Management (KM) Systems. Investing in KM poses a challenge similar to CRM. KM systems combine the work product of all lawyers into a single unified database that can be accessed to the benefit of all clients, in contrast to the old KM concept of looking in file cabinets and pulling out the paperwork of the most recent deals or pleadings. The heart of the process is to identify precedent documents that can be used in future matters and ensure that they are both identified and easily accessible. This is only feasible by using shared document management systems. If the technology is not integrated systematically from the start, the result will be a haphazard, after-the-fact efforts that diminishes business development effectiveness. Moreover, the KM process only works when the information is classified and categorized consistently and frequently, so all lawyers can access it.

Service Dynamic

The principles of electronic file and record management are the same as those that have governed paper documents. It is just the management process itself that is changed, and almost in every instance it is for the better. Proper application of electronic tools to tame the records beast reduces records management time and cost, saves the firm expense for record storage and searching, and makes information more readily available. These efficiencies are tangible, and they should tangibly be reflected in improved service to the client. How well firms use technological efficiency will be the new client service benchmark. The firm that adopts technology to improve file and record management, and then passes those savings onto the client, will be the successful firm of the future.

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