Ritman Insurance Insights

Ritman Insurance Insights

How long do I have to maintain client files?

Posted 9:22 PM

The file destruction issue is a mix of malpractice and ethics issues. In short, there is no "one time period fits all files" answer. Each file must be reviewed by a lawyer with these matters in mind.

Malpractice considerations - Maintain file for minimum time period for running of statute of limitations (SOL) on a legal malpractice claim, generally two years. Note that SOL may not begin to run until the malpractice is discovered. In some circumstances files may have to be maintained for a long time, if the lawyer feels the file would be helpful in defending a malpractice claim. For example, if the representation involved a written contract, with a 10 year SOL, assume a breach, a trial on the breach 10 years after the representation is over, a finding that there was no breach, but the contract drafting constituted malpractice. We could be up to 12 years on the malpractice claim.

"Minor" Considerations - Representations of minors may necessitate maintaining the file until the minor is a "major" plus the time period on the underlying representation plus 2 years. Think adoption.

Confidentiality Considerations - Never let anyone from outside the firm look at a file for any reason…especially for the purpose of determining whether the file can be destroyed. We regularly get insureds who want to use high school kids to look at files and see whether the last date of activity on the file makes it appropriate for destruction consideration. And these high schoolers always find the divorce file from a classmate, who they tell, who then throws it up in the face of the parent/client who then calls the lawyer asking why the whole high school knows about what happened in his/her divorce.

Ethics considerations - Because the client has a property interest in the file, it should not be destroyed without notice to and permission from the client. If a file is destroyed without client permission, the lawyer may be actually destroying client property, which could be an ethics breach.

Obtain an opinion from the Indiana State Bar Association's Legal Ethics Advisory Committee, which issues written opinions and/or the Advisory Opinion Panel of the Indianapolis Bar Association's Professional Responsibility Panel which provides "confidential, expedient answers on your prospective ethical conduct questions." Call them at 317-888-1121. An opinion should help to clarify the lawyer's ethical obligations regarding notice and client permission in destroying a file.

Absolute Consideration - One thing is certain regarding file destruction: Never destroy any item of intrinsic value, even if the client has agreed to the file destruction. Items of intrinsic value are any papers that are evidence of a client's or third party's interest in property or money, like a will.

The best solution is to incorporate the above ideas into a File Retention Policy. The policy would be incorporated into the fee agreement or engagement letter, become part of the basis of the representation, and then the file could be destroyed in conformance with the policy without further notice to the client.

Regardless, a lawyer should never destroy a file if the lawyer knows or reasonably should know that:

  1. A legal malpractice claim is pending related to the representation;
  2. A criminal or other governmental investigation is pending related to the representation;
  3. An ethics complaint is pending related to the representation; or
  4. Other litigation is pending related to the representation.