CHAPTER 13 SUMMARY A firm s filing and records system is the nerve center of a law office. The management and organization of a firm s filing system are essential to the smooth operation of a law firm. There are three types of filing systems: centralized, decentralized, and automated. A centralized filing system has all the files located in one area and is normally managed by a file coordinator or clerk. A decentralized system has files located in various areas, usually near the responsible attorney s office. An automated filing system electronically stores files and records. A filing system, whether centralized, decentralized, or automated, consists of a logical division of categories of records. Records are divided into categories that have a logical connection to one another. A coding system is a method used to store files in a specified sequence. An alphabetical coding system is the most common coding system used by small firms. In this system, a law firm s records are arranged in alphabetical order according to a client s surname. Although this coding system seems easy, problems occur when employees have not been instructed in its rules. Files may also be coded with numeric coding according to a particular numbering pattern. Six different types of numeric systems are used: straight, coded, calendar, standard, account, and combination. An alphanumeric system is also used, which is a combination of an alphabetical and numeric system. A cross-index is a cross-reference of records. All files and subfiles must be included on a crossindex. A numeric index must also be maintained. Color coding is a common method of categorizing files. Some records managers maintain that color coding increases speed and accuracy in filing. Color may be applied to any system and may be used for paper or computer records. A file retrieval system must allow for easy access to files. Firms employ file personnel who are responsible for maintaining a retrieval system. File requests are initiated by a requisition form.
A file must be accessible before it is retrieved. When a file is removed from a filing system, its location must be traceable and monitored. One method used to trace files is an out card. An out card is the size of a file folder, made of heavy vinyl, and has lines on the front on which to put names and dates. Whenever someone removes a file, an out card is inserted in its place. Out folders are also used. Bar codes are used to monitor files. Bar codes are a fast, easy, and accurate data entry method used in the process known as automatic data collection. Bar coding technology is used by universities and libraries to manage the circulation of books and journals. A bar coding system automates records management. A bar code is put on a label that is attached to a file. Large and medium-sized firms especially benefit from using bar code technology for their files. Radio frequency identification is a generic term for technologies that use radio waves to identify people or objects. It may eventually replace bar code technology for records management. The big difference between RFID and bar codes is that a bar code is a line of sight technology. Not all potential clients retain a firm: Some interview many attorneys before choosing a lawyer, and some just need some quick legal advice. A firm keeps information about each person who consults with an attorney. As we learned in Chapter 4, an attorney-client relationship is formed whenever an attorney gives a person legal advice. A client file is opened immediately after a client retains a firm. When a clerk or secretary opens a file, she or he must do a conflict check for a possible conflict of interest. A database is maintained that includes the names of clients and all parties to a proceeding in which a firm was involved. A conflict check is the most important aspect of file-opening procedures but is not limited to file opening. A conflict check must be performed as each new party enters a case. Most firms require some type of written record that a conflict check was made. If a firm has no conflict of interest in representing a client, a client file may be opened. A paralegal is responsible for maintaining clients files in good order. The first step in file maintenance is categorizing the documents. Correspondence, pleadings, notes, and all other documents are
filed in chronological order unless the case is large. In a large case, documents are further categorized by type. Case cover sheets are used to monitor the status of a case. Indexes are used to direct a person to a document s exact location in a file. Each document is given a number that is put on a tab so that it can be found quickly. A document is inserted behind its divider so that it can be located by lifting up the tabbed divider. The number, title of document, date, and party are inserted on an index sheet that is placed on top of the divider sheets. Indexes should be developed for every category of a case, except correspondence and miscellaneous notes. Every document has a life cycle and lives only as long as it serves its purpose. To determine the life cycle of a document, one must first identify the document s value. After its value has been determined, a decision regarding its future must be made. Time management experts advise that document management decisions be made as soon as a document is received. Filing experts have estimated that correspondence constitutes most of the documents received. Promotional documents are a form of correspondence. The person to whom correspondence is sent is responsible for deciding whether to keep the material. No document pertaining to a client s case may be discarded. Notes taken in a meeting with a client or on a client s behalf are always retained. Complex agreements require many drafts that should be retained until the final agreement is signed. Some firms have a policy to keep all rough drafts of agreements. Rough drafts of correspondence or pleadings are destroyed when the final document is completed. When magazine and newspaper articles are kept, they should be clipped rather than retaining the entire magazine or newspaper. If it is beneficial to retain each issue of a particular magazine, firms then file these in magazine files. There are many types of documents: e-mail, word processing, spreadsheets, graphics, video clips, voice mail, and document images. After you have read an electronic document such as e-mail, you make a decision to do one or more of the following: copy it, file it, write comments on it, forward it to someone in the firm, or dispose of it. The files and subfiles into which electronic documents are stored must
be similar in structure to the filing system for paper documents. Electronic documents remain on the network s hard drive until they are no longer needed, until they can be disposed of, or until the need to recoup hard drive space occurs. An automated document management system is an electronic filing system containing a database of documents that is updated automatically every time a document is created, retrieved, edited, printed, archived, or deleted. A document management system tracks and manages every legal document created in a law office. Once prepared, a document is saved on the firm s network or intranet. When a case is completed, certain procedures must be followed before a file is a candidate for closing. When a case has been completed, a file must be double-checked to ensure that all documents have been completed and filed. If the appeal period has not expired, a case may not be closed. The final bill must be paid before a case is closed. Some firms send a disengagement letter with the final bill, and others wait until the bill has been paid. Pruning a file prepares a file for closing by eliminating unnecessary documents. Each firm has specific pruning policies for closed files. Changing the status of a case from active to inactive involves changing a master client list and inserting the file on a closed-file list. Original documents that are vital to a client, such as a will or deed, should be returned to the client. Electronic documents that are stored in a client s file on the firm s computer system are deleted from the system. A file-closing memorandum is prepared and acts as a checklist for file-closing procedures. Inactive records are records that are seldom needed for the business of an office. Inactive records are usually stored in filing cabinets or storage boxes outside the main storage area. An alternative method for storing inactive files is to microfilm or image them. Large and mediumsized firms may image or microfilm their inactive records, but sole proprietors and small firms with smaller storage needs often cannot justify the expense. The best evidence rule, which requires a court to admit the best evidence that is available to a party under the existing situation, directly applies to imaged and microfilmed records.
When inactive records are stored, they still must be accessible for retrieval. Most firms have a separate coding system for closed files. Some firms that use numeric coding for active files change the file number when the file is closed. A closed-file index is kept on the computer, and a hard copy closed-file index log is maintained as a backup in case of computer failure. Information for the closed-file index is obtained from a closed-file index form. Records retention is the time period during which records must be maintained by an organization because they may be needed for legal, operational, historical, or other purposes. A retention schedule is a list of retention periods categorized according to type of document or case. A retention schedule integrated into a firm s computer system will automatically calculate a file s retention period. However, human involvement is necessary to establish a file s retention period. For business records, management must consider statutes and regulations, any future need for the records, and the statute of limitations. Considerations for the retention period for clients records are statutes and regulations, any future need for the records, statute of limitations if minors are involved, applicable age of majority, appeal period, and malpractice and business concerns. When a file s retention period has expired, the file and its contents are destroyed by following established procedures. Today, documents are shredded in a shredder machine. Before records can be shredded, they must be properly prepared. Some state bar associations require that attorneys notify their clients by letter before destroying their files. Some firms insert their file-closing and destruction policy into their retainer agreement. A law firm s personnel must be aware of five ethical considerations when managing files and records: preserve a client s property, diligently perform conflict-of-interest checks, promptly return a client s property, retain records according to government regulations, and preserve a client s confidentiality.