The Cobbler’s Children – Records Disposition in Law Firms
We all know the story of the cobbler’s children. The cobbler was so busy making shoes for his clients that he had no time to make shoes for his own children and so they went barefoot.
The corporate world has embraced the notion that not all information rises to the level of a record and not all records need to be kept forever. Much of the rational for the acceptance of this idea is driven by the legal community. Law firms are counseling their clients on the virtues of information governance as a key component of corporate governance and risk management. The compliant and effective management of information in order to maximize its value to the organization - and mitigate security and litigation risks and associated costs - is demonstrating significant benefits.
So why is it that so many law firms don’t practice what they preach?
I had a conversation recently with the records manager at a large law firm about how they might better manage the disposition process. His response was “well, we’re a law firm, we don't destroy anything." “Really” I said, “weren’t you founded in the 1800s?” He proudly replied, “We sure were, do you want to see my Iron Mountain bill?” Needless to say, it was huge, as was their spending on electronic storage infrastructure for every email, document, spreadsheet, form, filing, pleading, memo, deposition, meeting minder, and notes from the beginning of time!
There are a number of reasons for this behavior. A recurring reason I hear for why firms don't delete any records is the story of the very rare occasion when the firm was able to produce a document that the client needed but no longer had. The question is, do the one or two times outweigh the risks posed? The impact of keeping everything, aside from the enormous costs incurred, includes security, access, and privacy risks. The more outdated records we maintain the more it negatively impacts our ability to manage:
• ethical wall requirements; • comply with client imposed requirements or outside counsel guidelines; • perform effective conflict checks; • properly manage records that contain protected health information or personally identifiable information; • limit the exposure of a breach; and • present attorneys with relevant information quickly and efficiently.
There has also been a long time attitude that once a piece of information was behind the four walls of the firm it was privileged. Many are finding that much of this information may in fact be discoverable. Law firms are litigated, just like the rest of us and proper attention to complying with one's own policies is the prudent thing to do. The argument is also made that as a Lawyer, one might be able to use documents for similar matters in the future. The problem becomes how easy it is to actually find and use the materials if they have not been effectively part of a knowledge management effort and classified as exemplar or referential.
And there is the cost value proposition. There is the notion that storage is cheap, however the total cost of ownership of a massive collection of records can have a significant impact on the firm's bottom line. Between the people costs and administrative costs, licensing, infrastructure, and storage costs, the numbers quickly add up. The firm mentioned above is spending over $1 million a year to store boxes of paper, 50% of which relate to matters and clients closed over 20 years ago, with no significant long-term retention requirements.
Finally, and I think the most important reason why disposition is not taking place is the fact that it's not easy. Disposition is a process that poses many challenges. Records are dispersed in many disparate systems and storage mechanisms. There is a lack of central control which makes the process complex and highly manual. The process to obtain appropriate reviews, approvals, exceptions, and sign offs is either nonexistent or overly burdensome. Lawyers are focused on the matters at hand and the last thing they want to do is review materials for destruction that are 10 years and older.
What can be done?
Take a lesson from your corporate clients. Embrace information governance principles within the firm. Realize that information has varying degrees of value. Identify the specific retention requirements and triggers for the various practice areas and memorialize them in a policy. Communicate the policy to both clients and attorneys. Use technology to facilitate the classification, review and approval, retention and disposition processes. Institute mechanisms for effective knowledge capture to define exemplars and referential material. Set a go-forward policy and then start to tackle the legacy collection. It is a lot of work but the payback can be enormous and with the explosion of big data and social media, the problem will only continue to grow.
What’s your firms approach?
Let me know – email@example.com or http://www.igconsultinggroup.com