File Management

Accrued closed files can be a heavy load. The general rule in Texas is that the file belongs to the client, but there is no encompassing rule for how long a lawyer must keep the file. Tex. Comm. On Prof'l Ethics, Op. 627 (2013). 

Here are some tips to lighten the load: 

Fee Agreements

1. 1. Address Burden of File Retention in Fee Agreement and Termination Letter 
      Within reason, the lawyer and client can agree to file retention and destruction. Address it in your fee agreement and include a reminder in your termination letter.
      
      

*** 

SAMPLE CLAUSE FOR FILE RETENTION TO  
INCLUDE IN FEE AGREEMENT 

You agree that it is your responsibility to obtain your file. We will notify you when it is available but will do so only once. If you do not retrieve your file within sixty days, we can assume that you do not want it. In that case, we will retain the file for [X] years and then destroy it in accordance with our file retention policy and the Texas Disciplinary Rules of Professional Conduct. If you want us to retain your file beyond [X] years, you agree to pay the reasonable costs of storage. If you do not seek the return of your file when we notify you it is available, you may request it at any time before its destruction. Other than the initial notification that your file is available, we will not send further notice to remind you that it is available or regarding the date of file destruction or that destruction has taken place. 

*** 
SAMPLE CLAUSE FOR FILE RETENTION TO  
INCLUDE IN TERMINATION LETTER 

Your file is ready for pickup. If you do not retrieve it within sixty days, we will assume you do not want it. We will keep your file for [X] years, after which we will destroy it. If you want us to keep your file longer than [X] years, we are happy to do so but we will need to charge you the reasonable cost for storage. If you do not want your file at this time but later decide you want it, you can request it at any time before it is destroyed. 
*** 

Transition from Paper to Digital Files

Set aside originals as needed; download or scan the rest.

1. Screen Old, Closed Files
   Thin the volume by screening old, closed files for items that may have intrinsic value. Tex. Comm. On Prof'l Ethics, Op. 627 (2013).
2. “Attorney’s Eyes Only” Content
   On returning client files be sure to cull out “attorney’s eyes only” content. A common example involves criminal cases: The client may be aware that the State provided discovery, but the client cannot possess it. Tex. Comm. On Prof'l Ethics, Op. 657 (2016). Similar restrictions may apply in family violence cases, trade secret disputes, matters involving national security, and other concerns.
3. Develop and Implement a File Retention Policy
   Construct a policy that screens to the client, preserves valuables, and avoids any claim of spoliation. Here are tips and guidelines:
   

1. Ask Your Professional Liability Insurance Carrier for Guidance 
   Chances are, it’s not the carrier’s first rodeo.
   
   
2. Improve Usage of Electronic Client Files
   They minimize the need for a paper file, reduce storage costs, and can be easily transferred to the client at the close of the case.
   
   
3. A File Retention Policy Should Address:
   
   1. How the client will be notified of your file retention policy.
   2. How the client can obtain their file once the case is closed.
      1. Address the cost of postage if the client cannot pick it up.
      2. Consider a policy of returning the client file at the close of representation and retaining an electronic copy.
   3. How the file will be stored. Consider a fireproof, waterproof location that prevents an unauthorized person from having access to the contents of the file.
   4. How long the file will be stored before destruction.
   5. What, if anything, the client will be charged for storage beyond the destruction date. See Ethics Opinion 657.
   6. How the file will be destroyed in a way that protects confidential information
   
   

1. Upon opening a client file:
   
   1. Assign a unique identifier to each client matter.
   2. Include a summary of your file retention policy in your engagement letter or retainer agreement. Sample language for an engagement letter or retainer agreement follows:

You agree that it is your responsibility to obtain your file. We will notify you when it is available but will do so only once. If your file is not picked up within sixty days after we notify you that it is available, we can assume that you do not want it. In that case, we will retain the file for [X] years and then destroy it in accordance with our file retention policy and procedures and the Texas rules of professional responsibility for lawyers. If you want us to retain your file beyond [X] years, you agree to pay the reasonable costs of storage. If you do not seek the return of your file when we notify you that it is available, you may request it at any time before its destruction. Other than the initial notification that your file is available, we will not send any further notices reminding you that it is available to be picked up or regarding when the file will be destroyed or that destruction has taken place.  If [I am/we are] temporarily or permanently unable to practice law due to unforeseen circumstances, you consent to a named custodian attorney licensed in Texas and in good standing with the State Bar of Texas reviewing your client file, including confidential information, to evaluate steps, if any, needed to preserve rights in your case or to notify you and return your file to you or to another attorney at your direction. 

1.  
2. In handling the file: 
   1. Scan and file any physical files or documents received.
   2. Index physical files that involve a lot of physical documents and records.
   3. Secure physical files at the close of the business day.
   4. Preserve email correspondence (incoming and outgoing) related to the case and archive email accounts for departing employees
3.  Upon closing the client file:
   1. Use a file closing checklist.
   2. Review file contents after conclusion of the client matter or representation.
   3. Denote the date of review.
   4. Cull any “attorney’s eyes only” or other protected information from the client file.
   5. Return original documents and valuables to the client.
   6. Send the client a closing letter that provides notice to retrieve the file and a summary of the document retention policy. Sample language to insert in your termination letter follows:

Your file is ready to be picked up. If it is not picked up within sixty days, we will assume you do not want it. We will keep your file for [X] years, after which we will destroy it. If you want us to keep your file longer than [X] years, we are happy to do so, but we will need to charge you the reasonable cost for storage. If you don’t want your file at this time but later decide you want it, you can request it at any time before it is destroyed. 

If you choose for us to store your file and [I/we] become temporarily or permanently unable to practice law due to unforeseen circumstances during that time, you consent to a named custodian attorney licensed in Texas and in good standing with the State Bar of Texas reviewing your client file, including confidential information, to evaluate steps, if any, needed to preserve rights in your case or to notify you and return your file to you or to another attorney at your direction 

1. 1.  
   2.  
   3.  
   4. If returning the file: 
      1. Return the file when representation ends or after an agreed time.
      2. Returning the file is relatively easy if it is digital. If any part of the file is on paper, consider making a copy at your own expense.
   5. If storing the file:
      1. If you keep the original file, you may need to segregate valuables for return to the client without delay. Tell the client when the file will be destroyed and what amount, if any, will be billed to them for storage.
      2. Store the file in a location that would prevent an unauthorized person from having access to its contents.
      3. Store in a fireproof, waterproof location.
      4. Determine how long to store the file if the client does not want it. Per Ethics Opinion 627, the cost of storing the file until it can be destroyed is borne by the attorney unless otherwise agreed to by the client.
   6. If the file is to be destroyed:
      1. Remove valuable property, real estate deeds, original wills, or other items with intrinsic value and return them to the client (including excess IOLTA funds) before destruction.
      2. Evaluate whether destruction of the file will prejudice the client.
      3. Consider statutes of limitations that may apply, including limitations on claims by or against the client, as well as potential malpractice claims against the lawyer. Do nothing to risk spoliation claims.
      4. Destruction must be conducted in a way that protects all confidential information.

1. Consider depositing original wills with the applicable county or probate clerk. See Tex. Est. Code ch. 252.
   
2. Consider making a report to the Texas Comptroller regarding funds in the lawyer’s trust account for which the lawyer is unable to identify or locate the owner. See Tex. Comm. On Prof'l Ethics, Op. 602 (2010).

b. Consider making a report to the Texas Comptroller regarding funds in the lawyer’s trust account for which the lawyer is unable to identify or locate the owner. See Tex. Comm. On Prof'l Ethics, Op. 602 (2010).

Forms Listed Below

• File Retention Policy Practice Tips Checklist
• Sample File Retention Policy

Resources

1. Law Practice Resources, About Us: https://www.texasbarpractice.com/about-us/
2. Succession Planning: https://www.texasbarpractice.com/law-practice-management/plan/
3. Portal to Online System for Advance Designation of Custodian Attorneys: https://www.texasbar.com/AM/Template.cfm?Section=Succession_Planning&Template=/Succession/vendor/Instructions.cfm
4. Sale of a Practice: https://www.texasbarpractice.com/law-practice-management/article/best-practices-when-selling-a-practice/
5. Closing a Practice: https://www.texasbarpractice.com/law-practice-management/close/
6. Part XIII of the Texas Rules of Disciplinary Procedure (Cessation of Practice): https://www.legalethicstexas.com/resources/rules/texas-rules-of-disciplinary-procedure/voluntary-appointment-of-custodian-attorney-for-cessation-of-practice/
   • The mechanics of TRDP Part XIII differentiate between ordinary cessations and cessations involving extraordinary circumstances. Ordinary cessations channel through TRDP 13.01.
   • In extraordinary circumstances, any interested person may petition a court to assume jurisdiction over the lawyer’s law practice. Prerequisites for the petition appear at TRDP 13.02. If the court assumes jurisdiction, the court will appoint one or more Texas attorneys to serve as custodian-attorneys under TRDP 13.03.
   • Under TRDP 13.04, lawyers may enter agreements for custodianship, appointing their own custodian attorneys.
7. Opinion 627 (Disposition of Files and File Screening): https://www.legalethicstexas.com/resources/opinions/opinion-627/
8. Opinion 657 (Additional File Screening in Criminal Cases – Example of Attorney’s Eyes Only Information): https://www.legalethicstexas.com/resources/opinions/opinion-657/
9. Sample of Template Pleadings in the Event of Court-Appointed Custodianship, (Linked at Bottom Right): https://www.texasbarpractice.com/law-practice-management/close/