What should you do with those old client files?

By Diane Karpman

Karpman

As a graduation gift from law school (too many years ago), I received a bright blue IBM Correcting Selectric II. (Cool!) What I should have received was stock in Iron Mountain or some other file storage company, because clients’ files have become an albatross around lawyers’ necks.

As fiduciaries, lawyers have a duty of safekeeping client files (Rule of Professional Conduct 3-700).  However, ethics opinions from around the country maintain that lawyers need not keep client files for an eternity. Whew! ABA Informal Opinion #1384  (1977) maintains that lawyers should exercise “good common sense” in terms of client file destruction. There is no fixed file retention period, at which point you can destroy the file. This is heavily dependent on the type of case and the file contents. Of course, a client can, in the engagement/retainer letter, agree to protocols involving file destruction. That is the best time to establish an understanding and process for file destruction.

Other ethics opinions maintain that file destruction requires that a lawyer cull though the materials. You can’t destroy wills, stocks and bonds or documents of intrinsic legal significance. Sometimes a file contains historically important information. In an old Supreme Court case, Lizzie Borden’s law firm came forward and indicated that the firm still had her file 130 years after the trial. You may recall that she had taken an ax to her parents.

Obviously, you keep the file until the statute runs on a claim of legal malpractice, but there is no statute of limitations for lawyer misconduct (or murder). At the State Bar, there is a “Period of Limitations,” but it has numerous exceptions. Recently, an inquiry at the State Bar was closed in which the events occurred more than a decade ago.

Some ethics mavens argue that since trust account records must be kept for five years, that should be a sufficient amount of time for file retention. However, the period for trust account record retention, which protects lawyers, doesn’t actually apply to a client’s expectations that the lawyer will maintain the file. Again, the time to clarify the client’s expectations is in the initial fee agreement.

In California, some employment records must be retained for as long as eight years. The time is six years for tax and corporate records, and a maze of federal regulations governs the retention of records involving environmental matters (COPRAC 2001-157). The duty of confidentiality prohibits discarding files casually, and care must be taken with file destruction.

These obligations can create problems in ending a practice when a lawyer retires or dies. A lawyer could have decades of client files, which can create a burden for family members, if a lawyer has not had an opportunity to deal with all those files.

While visiting a friend, I happened to look into her garage. Her husband is a dentist, and their garage, like that of many of us, is completely lined with files.

• Legal ethics expert Diane Karpman can be reached at 310/887-3900 or at karpethics@aol.com.