Closed Client File Retention Policy: Best Practices
Adapted from The Risk Manager Vol. 24, Issue 4 (Fall 2013). Updated Fall 2022.
How Long Should I Retain Closed Client Files?
As our favorite law school professors enjoyed saying: it depends. The nature of the cases you handle—as well as facts in a specific case—dictate how long you should retain closed client files. The Kentucky Bar Association Ethics Committee does provide some general guidelines in Ethics Opinion E-436.
A lawyer is not required to bear the cost of maintaining files permanently. There is no specific requirement to retain records once a matter is closed unless the matter involved a client trust account. The Kentucky Rules of Professional Conduct require a five-year retention period for trust account records (SCR 3.130(1.15(a))). Therefore, the opinion states it is logical to maintain the case files where a client trust account is utilized for five years, as well. The opinion goes on to point out that some files must be retained for longer than five years (i.e., claims of minor children until child reaches age of majority; tax matters as long as client liability is possible; files involving a representation in which a malpractice claim might be made.)
Our recommendation is to maintain an entire copy of a client file for ten years—longer if the statute of limitations has not run in the matter within the ten-year period. Note, some files may require permanent retention. Examples of matters that may require a retention of longer than ten years:
- cases involving a minor or incompetent who is still a minor or incompetent ten years after the work is performed.
- estate plans for clients who are still alive ten years after the work is performed.
- wills and estate probate matters.
- contracts, notes, and bills paid over time still being paid off after 10 years.
- cases including a civil judgment that needs to be renewed.
- files establishing a real estate basis.
- title opinions and associated notes.
- criminal law files (at least as long as the client is alive).
- corporate books and records (e.g., charters, stock certificates, minutes, bylaws).
- files of problem clients or cases.
- adoption, child support, alimony, and custody proceedings files.
- files concerning structured settlements.
- trust deeds.
- cases with recyclable work product.
What if I Provide the Client with Their File When the Matter is Closed?
The opinion does seem to indicate that retention should occur if you have not provided the client their file at the end of the representation. Indeed, original, intrinsic documents—such as wills—should be provided to the client and not maintained by the firm. However, best practice is to maintain your own copy of the file according to the above retention guidelines.
What Should the Client File Contain?
A “… lawyer must provide the client anything in the file to which the client is entitled.” (KBA E-436). The KBA Ethics Committee in Ethics Opinions E-235 (1980) and E-395 (1997) provided the following guidance on what records must be given to a client:
- Notes and memos to the file prepared by the attorney containing recitals of facts, conclusions, recommendations
- Correspondence between attorney and client
- Correspondence between the attorney and third parties
- Material furnished by the client
- Searches made at the expense of the client
- Copy of pleadings and the like file in an administrative or court proceedings
- Legal research embodied in memos or briefs
At the time these opinions were rendered, maintaining client files in an electronic format was not a major consideration. It is now. Apply the applicable guidance above on what electronic files belong in a client’s file.
Tips on Implementing File Retention
- Discuss File Retention in Engagement and Termination Letters.
- The Committee stressed in E-436 that the letter of engagement should be clear that the client agrees to the firm’s file retention policy by signing the letter of engagement. As a matter of good practice clients should be informed of the following:
- The firm’s closed file retention policy to include the right to materials in their file;
- The file will be maintained for only a specified time; and
- The file will be destroyed at the end of that time.
- LMICK recommends including a provision in the engagement letter that states: “The client will have sixty (60) days to pick-up their file at the conclusion of the matter. Thereafter, the firm reserves the right to destroy or otherwise dispose of any documents or other materials retained by the firm within a reasonable time after the termination of the representation.”
- Sometimes clients ask lawyers to destroy all copies of their file. It ma not be prudent for the lawyer to comply with this request for purposes o malpractice claim defense or to avoid complicity in questionable conduct o a client. SCR 3.130 (1.16), Comment (9) covers return of a client fil including language that expressly allows a lawyer to retain a copy of th file.
- File Retention and Missing Clients.
- KBA Ethics Opinion E-433 (2012) is a comprehensive treatment of how lawyers should deal with missing clients including records retention. We recommend it for your file on records management.
- At the Conclusion of a Matter:
- Check for outstanding fees and proper client trust account documentation.
- Return client property such as original documents being sure to copy any returned documents necessary for the firm to have a complete file.
- Strip the file of duplicate documents, etc. – do not remove work product such as drafts, phone messages, or research notes.
- Send a termination letter to the client reminding them of the opportunity to pick-up their client file within sixty (60) days of termination of representation.
- Scan the entire file and maintain the file in electronic format.
- Save the file to a folder based on the planned destruction date.
- Destroy the paper copy after sixty (60) days has elapsed.
- Ensure Electronic Files Are Properly Backed Up.
- Active and closed files should be backed up regularly and on two systems (i.e., a local physical server and a cloud back-up; cloud back-ups in two separate locations; etc.)
- If your back-up system does not maintain two versions simultaneously, you may want to consider maintaining the closed paper files until you can update your back-up system.
- Ensure Access to Electronic Files When Updating Software Systems.
- Be sure that you manage electronic files so that access to files kept on superseded systems can be retrieved when the firm changes computers, software, and backup procedures. More than one firm was embarrassed to find when trying to retrieve files on a superseded system that they had not retained the technology to find and open required files.
Destruction Best Practices
- At the time a file is ready for final destruction, notify the client by certified mail. Advise that in the absence of instructions to the contrary the file will be destroyed after the date indicated in the notice.
- You should provide this final notice prior to destruction if the client has not agreed to the file retention policy (or the policy has changed since their agreement).
- Note, if you received the client’s agreement to the file retention policy in the engagement letter and reminded them of the policy in the closing letter as discussed above, you may choose to skip this step.
- Before disposing of the paper file, it must be screened for original documents or other documents that cannot be replaced. Examples are original wills, trust documents, and deeds. Although these should be provided to the client at the end of the representation, you will want to review any paper files that have been retained and are scheduled for destruction.
- Disposal of former client files must be done in a manner to protect client confidentiality. “The result must be complete destruction of the materials in the file as would be the case with incineration or shredding.”
For additional questions about file retention policies, please contact Lawyers Mutual at 502-568-6100.