Some law and accounting firms still spend thousands of dollars on closed file storage. These firms have tens of thousands of bankers-boxes of closed client files in warehouses, basements, storage buildings, office space and garages. A question still asked is how long do we have to keep the closed files?
The best place for the answer on file retention will reside with your local and state bar or accounting associations as every state has different requirements.
But the better question is why are you still saving paper?
Firms that generate more paper files have storage costs that are every increasing. Whether they are worried about the costs of converting to a paperless system or just like the feel of paper the storage problem continues to grow. Some still argue that digital records cannot be trusted because they are more easily deleted or destroyed. For those that cling to that belief what are your plans if there is a fire or flood? Or what are you planning to do if the files are destroyed by accident like the landlord accidently cleaning out the wrong storage unit. How can you have any type of disaster recovery plan with paper files? Remember digital files can be backed-up. If properly backed-up they are an essential part of any disaster recovery plan.
Whatever the excused used it is time to look at paperless options for many reasons:
1. Cost of storage-computer hard drives or cloud based storage cost a few hundred dollars a month vs a warehouse costing many thousands of dollars a month
2. Accessing old client matters-keeping track of where old paper files are stored and retrieving them can be a major undertaking occupying staff and taking many hours to retrieve. It can be literally days before an old file is retrieved. This is versus a computer system that retrieves client matters in literally seconds.
3. Misfiled client files happen at every firm. The manual index points to a box, but the client file is not in the box.
4. OOPS (Out of File with a Person) files-Sometimes when an old or current matter is being retrieved, many people may be involved that may or may not be communicating with each other. Kind of like a library book, the next person in line needs to wait until it is returned to see the file.
5. Backup and recovery-If your storage facility has a fire, theft or flood, how are the files going to be restored. Again computer files can and should be backed up daily with offsite storage.
6. File Retention-it is much easier and simpler to properly enforce a file retention policy with electronic systems. Keeping files that you do not have to keep can open you up to discovery that you should not have had to do.
So what methods can be used to convert to a paperless system:
1. Get a staff of college students and scan every document from the beginning of time into an online system. The costs to do this can be enormous and could take many years to accomplish. Whether you wait until the scanning job is finished to implement or implement a paperless system immediately, chances are this project will never be completed.
2. The other alternative is to pick a point in time where all files are now stored electronically. True you need to navigate between paper and electronic files, but as time goes by more and more of the files will be electronic. This can be implemented quickly and start to reduce storage and paper costs almost immediately.
Given today’s technology, there is no excuse for a law firm or accounting firm to be using and relying on paper files.