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How to stay within the rules, while cutting costs, on document storage

By: JESSICA STEPHEN//May 9, 2014//

How to stay within the rules, while cutting costs, on document storage

By: JESSICA STEPHEN//May 9, 2014//

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paperless_storage_Tricia Nell thought going paperless would give her the flexibility to work from anywhere, anytime.

And she was right.

But it also revolutionized her document retention system, streamlining the file storage at Tricia Nell Law Office SC, Green Bay, and saving her thousands of dollars – a strategy she thinks could translate anywhere.

“When I was at the DA’s office,” said Nell, a former district attorney and special prosecutor, “they probably spent $50,000 to $100,000 storing files (in a warehouse). You don’t have to do that anymore.”

“Wisconsin even has a legal ethics opinion,” she added, “e-98-1, that says as long as you have the implied consent of the client, which we always do, and they can choose; if they want an electronic copy or a hard copy; and they are notified, they can come and pick that up and then we can go ahead and save those files electronically. It saves us so much money, and it’s the wave of the future.”

As more and more documents are stored digitally, said Marney Hoefer, a partner at Stafford Rosenbaum LLP, Madison, attorneys have to be prepared.

“If you can really limit the number of documents you’re saving and limit the duplicates, you’re going to cut down on volume,” she said, “you’re going to cut down on cost and, if you get sued, cut down on reviewing those documents.”

To accomplish that, Hoefer suggests a two-prong approach.

First, she said, have a clear and concise document retention policy. Then, follow it.

“If you have a good one, you can save money over time,” she said. “You don’t have duplicate documents. And, if you get sued, you know where your documents are. And you can defend it if you’ve got a reasonable policy in place and implemented it.”

In fact, Hoefer said, it can be bad if attorneys have a document retention policy and don’t follow it.

“Cases get dismissed because of document destruction that was not in line with their document retention policy” Hoefer said, noting that something as seemingly innocuous as removing a Facebook picture has led to multimillion awards, plus attorney fees.

Once you have a policy, Hoefer said, the next step is to make sure your document retention system is compatible with your current technology and the size of your company.

As a former staff attorney with the state Department of Natural Resources – an office that historically has fielded a large number of public records requests in the state – Hoefer said maintaining technologically current files is key. It’s a lesson she learned the hard way after realizing that data stored on aged floppy discs could no longer be retrieved.

“As your storage abilities change,” she said, “you have to keep up with technology and make sure the older stuff can still be read.”

It’s also wise to account for employee turnover, including retirements, and employees’ use of social media and its potential to be summoned as e-discovery.

“I have a laptop, a phone and a tablet that all could have potential documents on them,” Hoefer said, “and cloud storage as well. So, when you have a document retention policy, you have to think about, ‘Do I need to be retaining texts? And do I need to retain Facebook posts?’”

Once that’s been folded into your document retention policy, Hoefer suggested revisiting the policy as often as every six to 12 months.

The how and where

Once you’ve decided what to keep, how do you store it and how long should you keep it?

The Wisconsin Supreme Court rules on document retention give varying timeframes, from five years for traffic and ordinance violations to 75 years for guardianships, if they involve a firearm.

Civil, small claims, complex forfeitures, misdemeanors and worker-related files, such as workers’ compensation and unemployment claims, must be kept for 20 years, while documents related to felony cases, John Doe and grand jury proceedings, search warrants and probate cases must be preserved for 75 years.

And wills must be kept for 100 years, while termination of parental rights files must be kept forever.

With so much variation, attorney Brian Cahill of Gass Weber Mullins LLC in Milwaukee said, there really is no industry standard for document retention.

“The problem,” he said, “is if you go with a short time period, you’re going to wind up with problems because you’ve got the (Office of Lawyer Regulation) issue, which is 10 years after the client knew or should have known about conduct that could arise to a complaint.”

Even then, the 10-year benchmark can fall short, particularly if the case involves an infant.

“You could have 20 years where you might have a potential claim for OLR with that,” Cahill, who oversees his firm’s IT strategy, said.

That said, electronic storage has made it easier than ever to keep documents indefinitely – and, Cahill said, you should.

“I have not had a lawyer ask to see original documents in more than five years,” he said, “because it’s all electronic now.”

The important thing is making sure clients are informed about document retention and destruction policies – something often accomplished in a retention letter and a follow-up letter as a document destruction date approaches – and that original documents are returned to the client as quickly as possible.

Beyond that, it’s just a matter of making sure originals are converted to digital; that they are, as state Supreme Court rules state, accessible, authentic, legible and readable; and that firms have enough storage.

“We just keep adding electronic space,” Cahill said. “And the cost of electronic storage has come down so much, we’ve been able to maintain every document from every case we’ve ever worked on since the firm opened in 2004. The key is making sure you have a disaster recovery system in place.”

At Gass Weber Mullins, that means files are updated daily and stored in the computer system, backed up on site and also at an off-site location until they are six months old. After six months, files are sent to archival storage in their server room on a RAID 5 storage unit, a large storage capacity system set up with multiple discs.

Then, once a month, that information is backed up to a similar storage system off-site.

“So, when a disc fails, and they will fail,” Cahill said, “you have a backup.”

It’s the sort of system that can transform a practice, he said.

“I have immediate access to all my files at any time, and the cost is a one-time cost of buying your electronic storage,” Cahill said. “Once you have that, you’re not paying that monthly storage fee and it becomes reasonable to maintain indefinitely.”

Nell agreed.

“I think it’s important for people to understand what we save,” she said, “in billable hours.”

Since she opened her private firm in 2012, Nell’s system has included cloud storage; a software management system called Clio; a computer-based and cloud-compatible phone system called RingCentral; and the online-based file transfer system Dropbox.

Learning all those systems has been a challenge, but Nell said her computers no longer crash, a problem she’s faced routinely at other firms and in other offices. She has instant and encrypted access to files, and she said it’s cost-effective, despite contracting with a tech firm to help maintain the system.

“I’ve saved about $20,000 in equipment, software fees, user fees on the computer end,” she said. “And the phone end would probably be $10,000. For a small business, that’s $30,000 upfront costs. That’s huge.”

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