The Advantages of Records Retention

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1 Records and Data Retention Practice A Comprehensive Approach

2 Records and Data Retention Practice Businesses must adhere to evolving laws and regulations governing record retention The business world is changing. Recent corporate scandals have given rise to new laws, increased government actions and criminal penalties. Organizations now face the pressing need for greater corporate accountability in many areas, including records and data management. Recent law necessitates that every organization transform its disparate records management practices into a corporate-wide records compliance program that addresses the creation, retention and destruction of records and data. One important example of such a law is the Sarbanes-Oxley Act of 2002, enacted to improve recordkeeping and the accuracy and reliability of corporate disclosures. Butzel Long can provide an effective records retention program tailored to your organization Butzel Long has built a Records and Data Retention Team that designs, implements and maintains customized records retention programs for its clients. Our team is familiar with the thousands of federal and state laws that control record compliance. This knowledge and experience makes us a valued partner in creating a records retention policy that is workable, practical, user-friendly and quickly implemented without compromising quality. The Butzel Long Records and Data Retention Team works hand in hand with other practice groups at Butzel Long. These practice groups, ranging from Employment/Human Resources to Environmental, contribute a working understanding of the specialized records used by various types of organizations. Given the combined legal and practical knowledge of records retention requirements and documentation, Butzel Long provides a comprehensive approach to the design of an organization s records retention program.

3 A well-designed records retention program will reduce costs and better manage risk An effective records retention program creates cost reduction opportunities by decreasing the physical and electronic space required to store obsolete or otherwise superfluous records. It provides operational efficiencies by allowing easy access to accurate information through the planned retention of required records. It improves risk management through the systematic assessment and maintenance of operational and legal records retention requirements. A successful records retention program includes four key elements Accessibility Information must be preserved and be accessible to retain its value. The test of an effective records management program is whether records essential to operations and/or legally required are created, maintained and disposed of efficiently. Consistency The measure of a first-rate organization is consistency in all aspects of its operations. Credibility depends upon consistent access to accurate information. Operational effectiveness requires that valuable information is easily located, understood, produced to others and disposed of when it is no longer useful. Outdated, inaccurate, or lost information impedes operation. Accountability A records retention program that fails to comply with federal and state law, or any preservation obligations for litigation or agency investigations, may subject your organization to substantial fines, penalties and other adverse consequences. Adaptability Given that approximately 90% of all corporate data is now in electronic form and less than 30% is reduced to paper, preparing for litigation or an investigation has taken most companies out of the familiar realm of paper documents. Understanding the impact of technology and electronic formats in today s corporate world is critical to the successful adoption of a records management program.

4 A successful records retention program complies with legal standards set by a myriad of federal and state laws In today s world, an organization must determine for every official business record it creates whether retention of that record is required and for what period of time. The federal government has adopted more than 10,000 federal laws and regulations that govern the maintenance and destruction of business records. A successful records retention program addresses the role of records in litigation and government investigations While a successful records retention program must comply with legal requirements, it must also address the risks and benefits associated with the possible use of records and information in litigation or government investigations. The legal discovery of an organization s business records will proceed regardless of the physical form of the document. This may include electronic information that is recorded in saved documents, messages, spreadsheets, scanned documents, presentations, and digital, audio and video devices. Hard-to-find or lost records may result in avoidable costs. In a lawsuit, the disclosure or discovery of records could very likely be central to your ability to defend yourself. For these reasons, a well-designed records retention program must address key questions, such as: How should an organization determine the retention period for a record likely to be used in litigation? What is the duty of an organization to preserve records when litigation or a government audit is threatened, but no action has been taken?

5 Under what circumstances should an organization preserve records and information during litigation or audit? In the event an organization must preserve and produce records and information, what are its responsibilities to preserve and produce electronic documents? With respect to this last question, recent federal law addresses the discovery of electronically stored information. Amendments to the Federal Rules of Civil Procedure (FRCP) that became effective December 1, 2006, expanded the scope of existing discovery rules to address information generated by computers. The amendments require each party to explore and present an electronic discovery plan and implement a litigation hold for relevant data and documents at the outset of litigation. Importantly, such a plan must include information about each party s corporate network(s), applications and data storage procedures. Our Approach to Records Retention Butzel Long s approach to records retention incorporates the philosophy of The Sedona Conference, a nonprofit research and educational institute based in Sedona, Arizona, dedicated to the advancement of law and policy in the areas of antitrust law, complex litigation and intellectual property rights. This philosophy holds that an organization s records management policies and procedures be realistic, practical and tailored to the circumstances of the organization and, furthermore, that legal holds and preservation efforts be efficient, cost-effective and defensible. For further information visit Electronic Discovery and Records Retention Specialty Groups.

6 About Butzel Long Butzel Long is a leading law firm with over 215 lawyers and offices throughout Michigan, and in strategic locations in Washington D.C., Florida, and China. Since its founding in 1854, the firm has represented a wide variety of institutions of higher education as well as playing a prominent role in the development of Michigan as an industrial, engineering and manufacturing center. The firm has a tradition of representing higher education and research institutions as well as commercial clients at their earliest stages of innovation and development, providing the guidance and counsel necessary for future success. From the formation of General Motors and the Dodge Motor Company to computer technology companies and bio-tech start-ups, Butzel Long has provided legal counsel to institutions across multiple industries for over 150 years. Today business leaders from various industries turn to Butzel Long for innovative solutions and advice. The firm strives to be on the cutting edge of significant trends and developments in the business world including advanced technology and manufacturing, e-commerce, Internet law, cross-border trade and transactions and international operations. The firm s approach is to provide a personalized attorney-client relationship based on a recognition of and responsiveness to each client s unique concerns and requirements. We seek a clear understanding of the business needs of each client through industry-focused research, knowledge management and partnering relationships. A distinguishing advantage of the firm is a commitment to providing value-added counseling and advice to its clients. It is dedicated to providing full value for every dollar invested in legal services. Practice Areas Business Disputes and Litigation Business Law Construction Law Employee Benefits Employment / Human Resources Environmental Family Law Global Automotive Government Relations Immigration Intellectual Property & Technology International Law Labor Media & Entertainment Law Minority Business Product Liability Real Estate Tax Strategies & Resolutions Trade Secret & Non- Compete Transaction / Finance Wealth Management / Estate Planning

7 Detroit Bloomfield Hills Ann Arbor Lansing Holland Boca Raton Palm Beach Washington D.C. New York Alliance Offices Shanghai Beijing Member Lex Mundi Butzel Long tel: fax: For further information: Carol A. Romej Dawn J. Ward Lance R. Zoerhof

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