1. What is the lawyer’s obligation when the client discharges the lawyer in an ongoing legal matter, and demands the file?
2. May the lawyer charge the client for expenses incurred in producing a copy of the file?
3. May the lawyer withhold the file as security for unpaid legal fees?
4. May the lawyer withhold the file if the client refuses to pay for the costs of producing a copy of the file?
5. How long must a lawyer maintain a former client’s closed file?
6. What procedures should a lawyer have in place regarding client file retention and destruction?

In determining whether an attorney is meeting his ethical responsibilities for a particular client, it matters not generally what form the documents in the file take, but instead whether all the documents necessary for the representation are present in the file. This is not to say that there are not instances where a paper document might be required. There may be any number of circumstances where keeping an original paper document in the file is critical, for example, testamentary documents, marriage certificates, or handwriting exemplars, to name a few. Clients without access to computers would require the attorney to keep a paper file. As to file materials other than documents, such as physical evidence, an attorney must always safeguard, maintain and account for such items. Any other instances where lack of a physical item may prejudice the interests of the client would also mean that an exclusively electronic file would not be permissible. The committee opines that there is not a per se prohibition against electronic files in all instances. However, when making decisions as to what to keep in the file and in what form, while an attorney may consider storage expediency, those decisions must be made such that the attorney’s duties of competence, diligence, and communication are not compromised. See Rules 1.1, 1.3, and 1.4. The preference for electronic storage cannot reduce a lawyer’s obligation to fulfill these ethical duties for each client.

What if a client wants his file? Does it matter whether he’s paid his bill or whether the matter has concluded?

Prior to the adoption of the Rules of Conduct, effective January 1, 2000, a lawyer had to go searching through the legal ethics opinions for advice on these file questions. However, on that date, Rule 1.16(e) went into effect; that provision directly addresses how to handle the client’s file. Rule 1.16(e) breaks the file contents into three categories.

The first is "all original, client-furnished documents and any originals of legal instruments or official documents." Those documents are deemed to be the client’s property, and the attorney must unconditionally return them to the client upon request.

The second category includes lawyer/client and lawyer/third-party communications, copies of client-furnished documents (unless the original has already been returned), working and final drafts of legal instruments, official documents, investigative reports, legal memoranda and other attorney work product documents, research materials, and copies of prior bills. For this second category, a lawyer may charge the client for the expense of making a copy of the items for his own retention. For both of these categories, an attorney must provide the requested items regardless of whether the client has paid his bill. The old common law lien on the client’s file is, essentially, overruled by Rule 1.16 (e). A lawyer can certainly pursue all normal collection options against a former client for unpaid fees; however, the retention of the file must never be used by the lawyer as leverage for payment of the bill for fees, the copying cost, or other costs associated with the representation. That practice will result in discipline for the lawyer.

A third category presented in Rule 1.16(e) includes copies of billing records and documents intended only for internal use, such as memoranda prepared by the lawyer discussing conflicts of interest, staffing considerations, or difficulties arising with the attorney/client relationship. A lawyer is not required to provide those items to the client. It is important to note that attorney work product is not in this category. An attorney must provide copies of items like his research notes, drafts of documents, and outlines of case strategies to the client upon request, as those items are within the second category discussed above.

May the attorney require, as a condition for representation, that each client consent to an “electronic-only” file?

In Legal Ethics Opinion 1818, the Committee’s answer is generally “yes,” so long as the client’s interests are not prejudiced by such a condition for representation. The Committee concludes that there is no per se prohibition against such a condition; nevertheless, if the choice to destroy a hard copy of a particular item would prejudice that client, then in that instance, the attorney should not require the client to agree to that destruction as a condition to the client obtaining legal representation.

Upon termination of the representation, may the client demand that the file, if maintained by the lawyer in electronic format, be delivered to the client in electronic format?

Virginia’s Rules and ethics opinions have not addressed this issue. At least one jurisdiction has concluded that electronic documents are part of the former client’s file that must be turned over if requested. When a former client asks for its file, a law firm must include any electronic documents or components of the file as well as whatever may be on paper. The cost of locating and compiling the electronic records has no bearing on the law firm's duty in this regard. See N.H. Bar Ass’n, Ethics Op. 2005-06/3 (Jan. 2006). Lawyers who maintain client files in electronic format should consider delivering such documents in PDF, TIFF, or other formats that do not allow clients or third parties to alter the contents of the document. This is particularly important if the termination of the professional engagement occurred under circumstances that were not amicable.

File Retention: How long must an attorney retain the files of former clients?

A lawyer does not have a general duty to preserve all former client files. See ABA Informal Op. 1384. The only express requirement regarding file retention found in the ethics rules applies to trust account records. Rule 1.15 (e) requires that all records (trust account) required to be maintained under that rule should be retained for five years after the end of the fiduciary relationship. For all other files, the ethics rules do not direct an exact time period; however, Rule 1.16 does establish a general duty not to prejudice a client upon termination of the relationship. Thus, an attorney should not destroy a former client’s file so quickly that the client’s interests are prejudiced. Legal Ethics Opinion 1305 provides detailed suggestions for the destruction of client files. Some considerations to keep in mind are whether files still contain any client property or original legal documents. Also, consider which documents are worth retaining for malpractice protection and which documents are necessary for conflicts checks. Certainly, any relevant statute of limitations must be kept in mind. The exact retention period for any file will depend on the area of law and nature of the particular matter.

For example, a criminal defense lawyer may want to retain the client’s file for a considerable length of time after the representation has ended because of potential habeas claims made by the former client. Legal Ethics Opinion 1418 indicates that delivery, and therefore retention, of a former client’s file may be necessary to protect the client’s interests in the event of post-conviction proceedings such habeas proceedings alleging ineffective assistance of counsel.

In addition, disposition of a former client’s files does not include throwing the client files into the garbage. Such an approach presumably would not protect client confidentiality. On the other hand, shredding, incinerating, or employing a commercial service that guarantees confidential disposal of documents would be sufficient. See Montana, Retention and Destruction of Client Files in a Law Firm, 25 COLO. LAW. 47, 48 (Apr. 1996); Thar, How Long Should You Retain Client Files?, 83 ILL. BAR J. 649, 650 (Dec. 1995).

Rule 1.16 (d) requires an attorney, upon termination of the representation, to take steps to the extent reasonably practicable to protect a client’s interests. This duty includes the obligation to return to the client all original documents and property which the client has entrusted to the lawyer. Thus, a lawyer needs to exercise care not to destroy original documents provided by the client, without notice and consent from the client. A lawyer should consider notice to a former client, if the client’s whereabouts can be readily determined, that the former client’s file will be destroyed unless the client makes arrangements to pick up the file. Some jurisdictions require advance notice to the former client of the lawyer or firm’s retention or destruction policy; however, if the client is made aware of and agrees with the policy, no further notice is required if the lawyer or firm destroys the file. The lawyer can include a document/retention policy in the written representation agreement and have the client agree to the terms and conditions under which the client’s file will be maintained by the lawyer or destroyed.

In order to avoid uncertainty regarding the treatment of client files, it is sound law practice management for lawyers to make arrangements with their clients for the disposal of clients’ files either in the initial representation agreement or in the agreement terminating the attorney-client relationship. See Wis. Ethics Op. E-98-1 (1998). Such an agreement may provide for the immediate delivery of the client’s files upon termination of the representation, storage of the closed files for a specified period of time and then destruction of the files, or the immediate destruction of the files following completion of the representation. Similarly, the parties’ respective obligations regarding delivery, storage, or destruction costs may be set forth in this agreement.

In the absence of such an agreement, however, the lawyer must be guided by the provisions of Rule 1.16(d). Upon termination of representation, the lawyer should make a reasonable, good-faith effort to notify the former client of the existence and contents of the client’s files and follow the client’s instructions whether to hold, return, or destroy the files. This process is obviously easiest to implement if undertaken immediately following the termination of the representation, but there may be circumstances where this is not possible.

More difficult problems associated with the disposal of former clients’ files arise when some period of time has passed since the end of the representation and either the client cannot be located or the client simply declines to respond to the lawyer’s request for instructions regarding the disposition of the client’s closed files. Because the ethical responsibility to do what is “reasonably practicable to protect a client’s interests” persists even in the case of a former client, see Rule 1.16(d), there is no hard and fast rule that resolves this issue in all cases. Many jurisdictions, however, have recommended a minimum time period in which a lawyer should maintain the closed files belonging to his former client.

Michigan Bar Op. RI-109 (Dec. 17, 1991) validates the practice of creating a file retention policy, stating that when a law firm establishes a record retention plan which protects the client’s right and advises the client of the plan, and the client has either retrieved their file or the time to exercise that option has expired under the plan, the firm has no further duty to notify clients of damaged or lost files.

Illinois State Bar Op. 94-19 (Mar. 1995) uses a blanket time limit for file retention and approves the destruction of legal aid files after five years, excluding wills and conflicts information. Iowa Bar Op. 91-20 (Nov. 14, 1991) approves the destruction of legal aid files, including conflict information, after five years.

Michigan Bar Op. RI-240 (June 26, 1995) approves the destruction of client files without notification to the client, provided the file contains no client property, or after reasonable notice about client property has been given. New York State Bar Op. 623 (1991) reaches a similar conclusion.

Arizona Bar Op. 98-07 (June 3, 1998) recommends indefinite file retention for probate or estate matters, homicide cases, life sentence cases, and lifetime probation matters. File retention for five years is appropriate in most other types of matters. The appropriate retention period will vary depending upon the lawyer’s judgment of the client’s reasonable need for the file materials after the representation has ended. That judgment should include consideration of applicable statutes of limitations, the length of the client’s sentence or probation, and the anticipated possible uses of the materials by the former client.

Establishing a Law Firm Record Retention/Destruction Policy

Lawyers have an obligation to implement an effective document retention/destruction system for their law practices. The increased use and focus on e-mail and other electronic documents in discovery makes it important that lawyers learn how to how to manage their electronic documents before litigation ensues. How long should e-mail and electronic documents be stored? Generally, the experts say that whatever rules apply to hard documents should apply to electronic documents.

Steps in Developing an Electronic Document Retention Policy

No one-size-fits-all approach exists for developing an electronic document retention policy. Following the steps outlined below, however, can help with the process.

(a) Firms must develop their own plan based on the following:

• Identify the types of data and documents the firm receives, uses, and stores. Define all records and media the firm uses for recordkeeping, payroll, accounts receivable, accounts payable, client databases, etc. Consider e-mail, web page files, text files, sound and movie files, spreadsheets, PowerPoint presentations, PDF documents, etc.
• Establish retention schedules for each type of document or data.
• Establish uniform standard file naming and storage protocols.
• Follow statutes or rules regarding required record retention for various types of records such as employment records, accounting records, client files, business records (i.e., trust account records must be kept for 5 years from the date the attorney-client relationship was terminated).

(b) Involve a person trained in computer technology from the outset—know what data is being stored and where it ends up.

(c) Decide if the firm will implement a “manual” system or implement an automated document retention and storage system.

(d) Know the physical limitations of your equipment. Can your system’s memory accommodate the retention policy and the applications to run it? You may need to consider a third party vendor for storage or purchase new equipment.

(e) Make sure the policy is claims or litigation neutral. There should be no distinctions or exceptions drawn in the policy as to treatment of documents that may be helpful or damaging in future litigation or claims.

(f) Identify the method by which the retention system is monitored and enforced.

(g) Include provisions for updating procedures when the firm implements technological advances. Records should be kept that document the design, development, implementation, and enforcement of the policy.

(h) Procedures should be forward looking for disaster planning, power outage, virus attack, interception, fire, flooding, and other casualty risks.

(i) Procedures must include a provision for excluding from destruction documents that are relevant or may be potentially relevant to claims, accidents, complaints, or other events that could lead to litigation in the future.

Plan Execution: Make Enforcement Consistent

• Centralize execution of the retention policy in one person. This person should also be responsible for testifying regarding the policy should that be necessary.
• Conduct periodic internal audits to ensure that the policy is working as designed. Make any necessary changes. If the firm becomes subject to litigation, the existence of a plan, consistent enforcement of it, and a history of adjusting it as needed will more likely be viewed as reasonable.
• Include a compliance requirement and monitoring method. For example, establish a system of random checks of a limited number of computers to monitor compliance.

Communication: Ensure that all firm members and staff know about the policy and understand it

• Inform staff as to the firm’s document retention policy. Make them a part of the planning and review process.
• Review with staff the legal ramifications of destroying or overwriting information if the firm is involved in, or has notice of, a lawsuit, audit, or investigation.
• Inform staff of any notice of claim, investigation, audit, or lawsuit in order to avoid spoliation or accidental destruction of electronic evidence.