How long should we keep client files?
Questions from the Legal Ethics and Professional Liability Seminar Series
This is one of the more common questions that local Bar association members ask during my Legal Ethics and Professional Liability Seminars. The real surprise is that there is no consistent answer across participants and seminars. The Bar Rules provide a little help, but here are some general guidelines to follow.
The primary Georgia Bar Rule that applies to record keeping is 1.15 Safekeeping Property – General. The Rule requires that funds and “other property” shall be maintained for six years after termination of the representation. The “other property” part could mean client files, but the Comments seem to point to securities and other valuables that require special handling, like a safe deposit box. Georgia Bar Rule 1.16 Declining or Terminating Representation also applies, but focuses more on the requirement to hand over papers and property, rather than the timing.
Keep client records for at least six years
Let’s use six years as a general guideline, if for no other reason than the statute of limitations for a legal malpractice case (with a sufficiently written contract) is also six years from the date of the negligent act. If you immediately return or destroy files after representation, you may find it more difficult to defend yourself later in a malpractice claim or disciplinary matter, if necessary. You could request the documents later, but don’t be surprised if the documents beneficial to your defense no longer exist. If you can’t mount a defense, your insurance carrier may find that your actions prejudiced the defense and coverage could become an additional problem for you. Avoid the hassle and retain an electronic copy (or a hard copy if you have the storage space) of the client’s records.
Some CPAs recommend keeping financial records for as many as 10 years, but again there’s no ethical requirement for that length of time. I’ve also heard other lawyers recommend “forever” under the premise that a client matter may end, but the lawyer retained certain duties to the client into the future. Keeping documents forever could create a security risk or other problems over time, so make sure you disclaim any future duties to the client in writing at the end of each client matter.
Document and communicate your file retention policy
The best practice is to create a specific firm policy for file retention, ensure that lawyers and non-lawyers in your firm clearly understand the policy, and then communicate it to clients at three critical points:
- In the engagement letter.
- When the matter concludes and you send a thank you / closeout letter.
- 30-60 days before files are destroyed pursuant to your policy.
Documents with original signatures may require some extra effort. Try to return these documents (with receipt confirmation) when the matter is concluded. If you can’t receive confirmation, consider holding wills, deeds, and other security documents indefinitely as a good customer service practice.
File destruction process
Many firms keep this simple, conducting a year-end file review to identify all of the client files eligible for destruction. After appropriate client notification, files are reviewed to segregate documents with original signatures and then shredded. Some firms scan the entire client file so they can retain a secure electronic copy in perpetuity. This is not a requirement, but seems like a smart business. I am of the personal opinion that incorporating scanning into daily operating procedures is the most reliable, efficient and cost effective policy.
While discussing file management and retention policies, I would be remiss not to mention that you cannot prejudice a client by withholding file materials upon withdrawal. See FAO No. 87-5. Also remember that you cannot condition the return of a client’s file materials upon the execution of a release of claims or a release of State Bar complaints. See FAO No. 96-1.
Schedule a seminar for your group or Bar Association
I regularly speak about legal ethics, professional liability, and risk management, and recently published a white paper to help attorneys deal with GA State Bar disciplinary matters. For more information on scheduling a seminar for your firm, local Bar Association, or group, please contact me at 770-751-8050 or email@example.com. If you can’t make it to a seminar, please join my LinkedIn group to read articles and updates from other attorneys and participate in the online discussion – Attorney Ethics and Professional Liability.