File Management in Law Firms: An Introduction
Essential to an effective law firm is an organized system for Files. Files are a record of what work you’ve done. And you are responsible to properly maintain your files and to provide them to clients upon request. Poor file handling is considered negligence under the Rules and subject to disciplinary action.
Electronic files are just as much or more of a lawyer’s property as paper files. Your firm’s data is one of your most important assets, and must be afforded the same respect as that of a physical asset. In fact, many lawyers have had their firms’ entire information system held for ransom by ransomware (a malicious software program that encrypts your files and prevents access).
Without a firm policy on file management , it is easy to allow important documents create themselves in random locations with abstract names, making it difficult to locate them in a timely manner. This poor organization can cause the effects that not being able to locate information in a timely manner would cause.
Good file management includes ability to easily locate information, to retrieve it if necessary, to be satisfied that you have retained documents for the required period of time set by statute (or any longer period you’ve established for your own protection), and to be able to produce them in a timely manner upon client request.
Establishing File Management Procedures
The planning and implementation of a file system will vary based on the size of the organization. Small law firms, such as solos and "one to six" attorneys, typically have temporary file organization as individual attorneys set up their own systems. In these small settings however, what often happens is that the attorney who generated the documents does not have a good retention plan.
Medium to large firms may employ two or more approaches. One approach is to place responsibility for storage and retrieval, as well as development of forms, into the hands of a team of staff members. This is similar to the Lancet model discussed above. A second approach is for the firm to do a needs assessment and identify file systems that are the same across the organization. Then the firm may have two lawyers responsible for the system and functioning like an informal committee to implement the systems throughout the firm.
Most firms depend upon Commercial Off the Shelf (COTS) software to manage their files. Some suggested COTS Software for litigation include Lexis Discovery IQ and Relativity. For more information about COTS Software generally, see our post on identifying the right software for law practice. There are many different kinds of software for legal practice files, many of which overlap in functionality. All software falls into one or more of the following categories: Case Management, Practice Management, Document Management, Knowledge Management, Litigation Support and E-discovery. For a description of the different features between these software programs, see The User’s Guide. The User’s Guide also contrasts the capabilities of DocuShare and Open Text, to provide a comparison between a Software as a Service (SaaS) option and a traditional software choice.
It is important when purchasing a new software platform for filing, that you think two steps ahead. For example, will it meet the needs of all your practice groups? It is not a good idea to buy software that will meet the needs of only one practice group at the cost of not being scalable throughout the organization. It is better to have one consistent software platform that meets the needs of the entire organization, rather than having more than one platform. The organization will face reduced training costs and the transition from manual to automated filing will be more uniform. Make sure before you buy that your designated practice groups can fully function on a single platform RFP. It is also essential that the installation of the new software has a thorough user-training program, to ensure the files are saved properly and retrievable. Centralized storage makes it difficult to retrieve anything, if no one understands how to save it.
The second consideration when changing to a new filing system is finding an appropriate storage platform. Given the new GDPR laws, law firms are moving more information to the cloud. A firm can use a hybrid system that uses both the cloud and physical files. Files stored in the cloud usually have restricted access.
Although digital storage has transformed file management systems, physical files remain an important part of overall file management. It is common for most law firms to keep both cloud and physical files for the work in progress, along with closed files. When designing a physical file architecture, law firms should consider the physical constraints of the buildings where the files will be stored, and build a record retention plan around where the files will be physically stored. This storage architecture should be flexible enough to support physical and/or digital storage. Both physical and cloud storage are limited by the way in which the data is indexed. It is essential to understand how data is indexed in digital storage, in order to understand how to file and retrieve data on a cloud system.
Photos: All photos in this blog post were taken at the ABA TechShow in Chicago during a session titled "National Security, Cybersecurity and Pandemic Preparedness: Using Artificial Intelligence Tools." In this session, attendees learned about expert tools for crime prediction, crime-solving forensics, and how to locate missing persons and loved ones.
How to Create a File Naming System
Essential to success in any business, a consistent and clear file-naming convention will help you easily find and work on the files you need to. It increases both efficiency and accessibility across all platforms.
The format of your file naming convention is going to be personal for your firm, but to start on the right track, there are some tips to use as a guideline.
These are some suggested formats to use or modify for your firm: You can also add additional information before or after, such as: last name first name, middle initial, file number, client number, matter number, case number, type of firm (small, LLC, corporation, etc.). By including searchable information, it makes it so anyone can easily find a file.
Tips: Be consistent. If you are going to use hyphens, use hyphens for everything. If you use underscores, use them for everything, not just some things. Be consistent with spacing. These will make a difference in the way you search for files and the results that appear for searches. While it’s great to use those advanced searches, don’t make it hard on yourself by not following a consistent naming convention that will allow you to search for files in a general search. These are internal files until they leave your office and become an external file. Use the case number or your own internal file number at this stage. If you use the client’s last name, you could possibly violate HIPAA rules if you use it incorrectly. Yes, the A, B, C, D, E, F’s are important. But, too many law firms these days have "bankruptcy" clients that have become "foreclosure/abandonment" clients. Further, the rules, standards and requirements have changed, and continue to change, about when each client should be classified. In your office, you might not have one person do all those cases. Family law, bankruptcy, foreclosure, workers compensation can all be different sections in your file management system. Yes, the rule of thumb is to spell out everything in your file management system, but when a client gives you a nickname of "Billy," used apparently only in the family, might be better to use "Bill."
Some clients may use a multiple-word name, which can be fine for the folder names in the system. If you have to search by the last name, what would it be? You want your search to come close to matching the last name of the client.
All clients have a number or identifier in their file. Be sure you know what that number is before you put it in your file management system. You may want to use them for reports.
Document Security and Confidentiality Issues
Confidentiality and security are paramount in law firms, as the potential harm from breaches is substantial. All firms should look to ensure an optimum level of security concerning document storage. Consider the following measures to protect your files on the cloud:
Encryption Storing documents on the cloud without encryption is like storing valuable physical assets in a metal safe without a security lock. Document encryption uses an encryption key to scramble, or code, your documents so that only those with a decryption key can view your documents. Using secure encryption is a must for all law firms, and encryption should be enforced at all levels. If your files are deployed on the cloud, then not only should the data on the system be encrypted, but transfer of data over to the cloud, too. If any files are shared both inside the firm and with clients, you should make sure that the sharing is secured with effective, full password protection to avoid inadvertent access.
Access controls Access controls are another important part of law firm document security, as they restrict who can access your files on the cloud. This helps you improve productivity by allowing you to share files with your colleagues when you have productivity restrictions in place, while still keeping sensitive files separate from others. It also ensures privacy, as only those with clearance can view certain files. Access controls can be enforced both at the data level (such as setting up a separate folder for sensitive data) and by the cloud provider. Many cloud providers have secure user sign in protocols in place, such as two-factor authentication. Two-factor authentication combines two factors to prove identity, such as something that you know (e.g. password) and something that you have (e.g. phone). Multi-factor authentication (MFA) also takes in something that you are, such as biometric identification. MFA, however, can sometimes be difficult for employees to set up and use, which means an increase in helpdesk support.
Firm-wide policies A firm-wide policy regarding document security is stronglyrecommended and should include rules around client confidentiality, password management, secure file sharing and regular audits. The firm-wide policy ensures that all employees, from senior partners to junior associates, understand the importance of client privacy along with the risks and consequences of breaches. While you may already have security policies in place that are followed across the firm (e.g. email encryption, document sharing controls and access controls), it is equally important that you remind and refresh your lawyers and support staff on your firm-wide policies.
Implementing a File Retention Policy
Implementing a file retention policy is essential for the long-term management of a law firm. This is comprised of both the creation of a policy and the ongoing monitoring of compliance with that policy once it has been established. When it comes to establishing file retention policies, most bar associations suggest that your office develop a written file retention plan which includes policies and procedures for how you will manage all of the records the firm generates. This needs to be a regular and integral part of your law firm’s record and information management planning. The consequences of not having a file retention policy or for failing to implement such a policy can have dire ethical consequences, as it can undermine attorney-client privilege and create conflicts of interest.
As defined by most state bar association, the purpose of a file retention policy is essentially to document procedures whereby clients’ files are retained and accessed in compliance with ethical obligations and to facilitate the firm’s orderly and timely destruction of client files. Most bars will require setting forth policies and procedures by which a firm identifies when files will be destroyed.
When developing a file retention policy for how long to keep files, the starting point is to be familiar with both federal and state law. For example, Federal and state laws will have certain requirements to retain certain types of records. For example the National Archives and Records Administration publishes records retention schedules for federal government and law enforcement agencies and the Internal Revenue Services has regulations governing the retention of tax documentation and gives guidance to private taxpayers. All firms must comply with these laws, and, offices involved in litigation will want to ensure that they are complying with any existing and applicable U.S. District and State court local rules concerning file retention. You will also avoid penalties and sanctions that may arise out of breach of a legal obligation to a client, such as a contract or fiduciary duty.
Beyond that, identifying what file disposition policies are required pursuant to state law and any relevant court guidelines, there are a number of best practices that are recommended for file retention:
With regard to implementing an effective file retention policy, your policy should have withdrawal details – as well as a reasonable means to communicate to affected employees. In order to facilitate tracking of files towards disposal, you should assign staff the responsibility of tracking files in a registry that includes files by month and year.
Finally, while timely file disposal is important, many law firms err on the side of caution and elect to keep files longer than they actually need to due to concerns over breach of attorney client privilege. While for good reason conflicts of interest need to be considered and documented, very few documents are actually privileged. General files, even correspondence of a general nature, are rarely privileged unless they would contain a legal analysis or a legal opinion and only if that opinion or analysis were conveyed to the client. Weighing the cost of storage vs. compliance obligations, you will find it often makes sense to dispose of these files.
To properly balance the duty to maintain files and the costs of storage, having an optimized file retention policy is fundamental to effective and efficient law office practice.
Regular File Audits and Reviews
For you to be able to maintain a well-functioning management system, you absolutely must conduct regular file audits and reviews. You should consider implementing some of the following strategies to facilitate this process:
You probably already have a good idea of how to implement all of these controls, but it’s surprising how many law firms don’t bother to implement a regular review procedure or file audit. The importance of such a plan cannot be overemphasized . Regular reviews of your firm’s files, whether they are tickler files, active files, closed files, or archived files, can be the only way you can ensure your current or former legal assistants and/or lawyers do not inadvertently delete the information in your files. It’s true that the risk that your legal assistants will delete the information in your firm’s old files is small, but the consequences of that deletion can be significant. Take control of your firm’s information and you will likely save your firm a lot of trouble and money.
Staff Training in File Management Policies
Your file management system is only as good as the people using it. And even the most comprehensive, detailed processes are of little use if your staff isn’t trained on how to follow them. It’s essential to make sure everyone in your firm is on the same page when it comes to managing files. Not only will it cultivate a sense of team responsibility around this collective task, but it will also help ensure that the system is being followed to the letter, avoiding unnecessary headaches. The more knowledgeable your employees are about file management, the better they can keep track of information (and retrieve it when necessary). To avoid inconsistency and disorganization, it’s imperative to implement comprehensive training programs. Here are some tips: Make sure your employees understand that tracking files is a firm-wide responsibility. Assign certain individuals to monitor how effectively and efficiently protocols are carried out, but maintain clear lines of communication so that everyone is up to date on what needs to be done. Create and distribute printed copies of your file management policies and procedures manual. Post it in a central area of the office. This way, your employees can have the information they need at their fingertips and it can serve as a valuable reference source. Hold periodic training sessions, which can be in-person or virtual, to ensure everyone maintains familiarity with their file management responsibilities. Provide individual feedback when necessary. HR’s formal review process usually does the trick, but it’s helpful to coach team members throughout the year about the importance of a sound file management system. Having a solid file management system is of no use if no one knows how to use it. Because so much of client data needs to be dealt with in a timely and accurate manner, it’s critical that your staff be properly trained. At the end of the day, you should be able to rest assured that your firm’s files will always be where you need them, when you need them.
Using Technology for Optimal File Management
Technology plays a vital role in advancing file management. Innovative tools and platforms are available today to streamline processes, as well as to track progress and ensure efficient handling of firm files. Today you can have a fully integrated approach to file management in your law practice. One such platform is the law practice management software from Thomson Reuters, which is specifically designed for secrecy and strict handling of sensitive documents. The process is not only secure, but also facilitates version control, making it easy to determine whether there was a change in a document and by whom. Another type of technology that’s useful for file management is cloud storage. There are many data storage solutions available for law firms. Cloud data storage is a great way to automatically back-up files and provide a high level of security. It also provides access from anywhere. We customarily think of cloud storage as a good solution for client retention. However, it can also be a good solution for file management. Next on the horizon is the evolution of document assembly, which involves merging a document assembly system with your document management system. This would give you both a legal and a non-legal document assembly ability. You will have access to not only documents that you need to assemble in your legal practice, but also all the other non-legal documents you need to assemble. Moreover, such a system would have a "search and find" capability, which would allow you to search for a particular word or term, and find that particular document instantly. The ability to draw down all the documents related to one case, one client, or one word or topic, is extremely useful for law firms. The past few years have seen significant advancements in document assembly, and the next several years promise even more innovations.
Common Errors to Avoid in File Management
One reason behind our hosting EDL webinars is to educate law firm staff on common file management mistakes they may make. Here are a few of the more troublesome pitfalls:
1) Lack of consistent policy.
Law firm staff change jobs frequently these days, and especially if a file manager happens to be in a converted legal secretary position. Because a comprehensive policy on file management may not be consistently followed by all staff, the firm risks inconsistent compliance across offices and conflict with compliance regulations such as attorney-client privilege. A consistent file management policy should be reviewed regularly and communicated to staff who have contact with client files. It only takes a moment to update a new hire or remind those who have not been trained for some time.
2) Inefficient systems.
Failing to implement and follow through on a compliance policy that covers the entire lifespan of client files is another concern. For example, if an office policy calls for electronic backups but it’s implemented only for new clients that come on board after the system is in place, that can lead to the entire client history being at risk if older elements of the files rely on a backup system that is not robust enough to include them. Staff members may think "it’s too difficult to scan those documents" rather than "we need to revisit the policy and how it has been implemented."
3) Not assigning responsibility for document retention.
Cross office communications about office policies and document retention issues can draw attention to those responsible for maintaining compliance. Clients are likely to be concerned if they learn that some offices in the firm have had paper files lost or damaged. A typical scenario might be for a lawyer to ask each of his or her paralegals to handle specific documents. When an office or firmwide policy doesn’t specify when paper files will be scanned, different paralegals may execute very different approaches as they retain the documents in different folders. The policy should assign responsibility for scanning and retention of paper files and availability for reference.
4) Enabling clients to retain control over documents.
Another common mistake law firms make is allowing their clients to make decisions about what should be done with their files. While you may think that the law firm does need to ask the clients what they want to do with their files, your role is to educate them on their options, and the risks associated with each response. For example, if you lose a file, or have a file disaster and have nothing backed up on the cloud—your clients count on you to have done everything to protect their information. When those clients receive a letter from you saying you have a fire or flood—and you haven’t taken the time to fully educate them on their options—they are in a weak position if they are presented with an ultimatum. You cannot help eliminate this risk if you have not fully educated them and documented that education in written correspondence. It is up to the law firm to set the standard and provide the best practice for the client. Your firm’s policy should be to always back up files and store those backups on the cloud.
Conclusion: How to Maintain a File Management System
In this article, we have taken a look at the importance of maintaining an effective file management system at your law firm. By establishing such a system, you improve staff productivity, enhance coordination between team members, and ensure both client and firm assets are not lost to the challenges associated with the perils of old and new technologies.
In reviewing the steps that you must take to ensure that your file management system is up to par, we began by looking at the types of files you should maintain – including verbal communications, electronic communications, and paper documents. We then took a look at some of the important qualities that your law firm needs when it comes to file management systems . These qualities include ease of use, conflict prevention, confidentiality protection, and ease of use. We also looked at all of the possible areas that may require filed documentation. Finally, we looked at how a sound file management checklist for your law firm can help to ensure that you have a solid file management system for your law firm.
As a law practitioner, you understand the complexities and risks associated with representing your clients. The last thing that you want to worry about at your law firm is a failure of your file management system or the loss of critical firm or client assets. By having a solid file management system in place at your law firm, you will reduce risk and improve efficiency, which will result in a better bottom line for your business.