Management Assistance Program
Eliminating the Terror of Lost Client Files
By Jim Calloway
To err is human, as the saying goes.
We human beings make mistakes. We forget. We don’t follow through on carefully crafted plans sometimes; but the legal profession is an exacting undertaking, requiring attention to detail, and the legal system is sometimes very unforgiving of errors.
Several years ago, as those of us who advise lawyers were focused on trying to get lawyers to use practice management software to manage digital client files, there were a lot of statistics floating around about how many hours per week law firms wasted looking for lost files or lost documents. It was an impressive number of hours. The cost was eye-catching, the hours were multiplied by the hourly rate of the lawyer and legal assistants who were looking for the lost file.
In my Law Practice Tips column last month, “Cloud Computing for Lawyers – 2019,” I reiterated my opinion that cloud-based practice management tools are important for many lawyers, including most lawyers in a small firm setting without IT staff. One reason was that if all documents in the client files are digitized and properly stored in the cloud, it is extremely unlikely (near impossible) they will become lost.
Many lawyers still use traditional client files with physical client documents contained in file folders. This column is directed at lawyers who prefer to use traditional client files in folders.
I concluded the column noted above with a memory of a mistake that I made:
I’m a lawyer who once drove off with my briefcase full of client files on the top of my vehicle’s trunk instead of inside it. I saw the resulting disaster in my rear-view mirror. I recall thinking I needed to buy a new briefcase anyway and being quite grateful it was not a windy day. That illustrates that having critical client information stored only in physical client files is not risk-free either. In earlier times that was a lawyer’s only choice. Today you need a backup of the data – and a way to keep your law practice operating in the face of any disaster.
That observation about risk still applies to lawyers who want to operate from traditional client files. The risk is that the lawyers may believe that they have a good backup of their traditional file when they don’t.
WHAT’S IN A CLIENT FILE?
All lawyers who have been in private practice understand the nature of their files. The concept is simple.
- A client (or matter) file is a binder of all the documents associated with the matter.
- A client file traditionally did not contain everything about a matter. It generally did not contain bills or billing entries. Calendars contain important client information stored outside of a file.
- Many lawyers appearing in Oklahoma courts still want to carry a physical client file with them, even if they are using digital files while in the office. Depending on the circumstances, this may include only documents relevant to the scheduled hearing.
- Simple matters that may only involve a dozen or so documents can still be managed quite well with a traditional physical client file in a file folder. Larger cases involving many boxes of documents are almost always digitized today as physically searching through hundreds of documents becomes too time consuming.
So, what happens if a file gets lost? Maybe it was someone’s error. Maybe a lawyer’s car was stolen and when it was recovered, the briefcase full of client files in the back seat was missing. Well, thankfully, almost all the lost files I referenced earlier were only mislaid and eventually found in the wrong file drawer or a lawyer’s briefcase.
Of course, the initial concern is where the file might be and is there any chance that a client’s confidences could be exposed. One soon begins hoping that the file was inadvertently sent to the shredding service or landfill.1
Do you have an obligation to notify the client of the lost file? That is a fact-dependent determination, but in many situations, perhaps most, the lawyer will need to notify the client. For a “law school hypothetical,” I would suggest if a box of closed files that had been untouched for years was accidentally sent off to the shredding service a year earlier than planned, that may not require a notice to the client.
Generally, if you don’t know where the file is located, you most likely have an obligation to inform the client of the possible compromise of the information in the file. Recently released ABA Formal Opinion 482 (September 19, 2018) Ethical Obligations Related to Disasters cites both Rule of Professional Conduct 1.15 (Safekeeping property) and Rule of Professional Conduct 1.4 (Communication with the client) in favor of disclosure.
IMPACT ON THE CLIENT AND LAW FIRM
Needless to say, there will be many times that such a disclosure to the client will have a very negative impact on the attorney-client relationship. That depends on the nature of the attorney-client relationship and the nature of the matter. The client’s confidence in you suffers when you tell them a file is lost or even temporarily misplaced.
Then there are situations where there is a negative impact on or prejudice to the client’s matter. The lost file damaging the client’s matter, while rare, is the nightmare scenario. A grievance or professional liability action may be the result.
So, the “primary paper file lawyer” and the “primary digital file lawyer” have the same goals. They want to be able to assure the client that nothing has really been lost in a way that impacts the client’s matter negatively. A physical folder may be (hopefully temporarily) unavailable, but there’s a copy of every document. Yes, a paper file lawyer still needs a backup. Making an additional photocopy of all documents a lawyer might receive into the client file is cost prohibitive and not something anyone is likely to do.
Today’s paper file lawyer can create the backup in a few steps so there’s always a complete copy of the client’s file available.
- Create folders on a computer on the network for each client matter. (You have probably already done this to organize the client documents the firm creates.) These folders or drives should be automatically backed up off-site.
- Every time a document the firm creates is finalized and printed off for the physical client folder, also save a PDF version of the document to the folder.
- All correspondence and deliveries received should be scanned and saved to the folder as they are placed into the physical client file. Email attachments that are filed in physical file should also be saved in the folder as PDF files and maybe in the original file format as well.
- Any document that is executed or file-stamped should be scanned when a copy is placed in the physical client file.
Assuming your online backup works properly, you will now and “forever” have a complete copy of the client file.
The scanning piece is very important. Without the scanning, your computer system only has half of the client file – the documents you created. Scanning is to ensure you have a digital copy of the client file that includes correspondence and pleadings the lawyer has received from others. I still believe the scanned documents are better organized in a practice management solution than Windows folders; but however you organize them, it is the best practice today to scan every paper document you receive as well as any handwritten notes you take.
If you don’t have a good scanner, I recommend the Fujitsu ScanSnap. In October 2018, the company announced a new desktop scanner model the Fujitsu ScanSnap IX1500 at roughly the same price point as its popular IX500 model. I’m certain we will be seeing many of those appearing in law offices this year.
Hopefully you will never personally have to deal with losing a client file, but having a complete backup of every client file is a good insurance policy. And when (or if) you decide to convert to a practice management solution, you will be ahead.
Mr. Calloway is OBA Management Assistance Program director. Need a quick answer to a tech problem or help solving a management dilemma? Contact him at 405-416-7008, 800-522-8060, firstname.lastname@example.org. It’s a free member benefit!
- It is not recommended that closed client files be sent to a landfill without first being shredded.
Originally published in the Oklahoma Bar Journal — Feb., 2019 — Vol. 90, No. 2