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Last updated: March 2022
File retention practices are changing due to the cost of storing files and the attractive alternatives offered by technology.
When addressing your firm’s file retention and document strategy, you should consider the following questions:
- What am I required to keep, and for how long?
- What should I keep, and for how long?
- What are best practices in file management, storage and destruction?
What are you required to keep?
Law firms are required to keep all prescribed financial records for a minimum of ten full years, in a format that is retrievable on demand (Rule 119.35(1)). Only those parts of client files which are required to support the prescribed financial records must be retained (Rule 119.34(6)). If the originals have been provided to the client, a lawyer must retain copies. Client identification rules also require information related to the identification and verification of clients to be stored for six years following completion of the work for which the lawyer was retained (Rule 119.51(3)).
What should you keep?
While the rules do not require you to keep a complete copy of the client file, it is recommended in the event you face a subsequent claim or complaint. Most firms store client files for ten years following the end of the fiscal year in which the file was closed, in consideration of sections 3 and 11 of the Limitations Act.
Limitation periods may be extended in cases involving fraudulent concealment by a defendant, or when a claimant has a disability or is a minor. Any file that may give rise to a potential claim that is not statute-barred should be retained indefinitely, until the lawyer is able to assess potential liability.
Also consider the “working life” of the file documents. Examples of documents with an extended “working life” include mortgages, long term leases and matrimonial agreements.
Lawyers must not destroy original wills and must also keep the will preparation file for at least ten years past the date probate has been completed.
Lawyers should return original wills to clients to avoid indefinite storage obligations. If you decide to store original wills, use a vault or fireproof cabinet.
Best Practices in File Management, Storage and Destruction
Lawyers at all stages of practice need to be thinking about file storage issues. What happens when a firm dissolves, or a lawyer dies or quits practice? Who will agree to take responsibility for your files when you retire?
From the day you start practice, you should try to reduce the number of documents you store and set destruction dates for closed files. It is of upmost importance to exercise due diligence in choosing a service provider for storage and destruction of your files.
Original documents should be provided to clients when a file is closed and all other unnecessary documents should be removed. You should advise clients that their files will be stored off-site and destroyed on a future date. This is also an opportunity to let your clients know upfront that if they request their closed files in the future, a file retrieval fee will be charged.
Digital File Storage
If you are considering digital file storage, keep the following practices in mind:
- store client file materials in a digital format and also take steps to ensure that you will be able to access and read those materials in the future;
- protect client confidentiality, whether files are open or closed, stored in paper or digital format, or stored locally or in the cloud;
- exercise due diligence when choosing any IT service provider; and
- get consent from clients before storing their data in the cloud.
Further questions about this topic can be directed to the Law Society’s Practice Advisors.