Office of General Counsel Formal Opinion 2010-02
Topics: Retention, Storage, Ownership, Production and Destruction of Client Files. Cloud computing.
Excerpts from the Opinion and comments from the editor’s of this website:
Rules 1.15, 1.16 and 1.6 impose a duty of segregation, safeguarding and production upon request of client’s file (which is client’s property) but not to “to preserve the file permanently.” The lawyer should adopt and follow “a file retention policy… [which] must be communicated to the client in writing – [it can be included in the retainer agreement] – at the outset of the representation” and must be repeated to client when the representation ends and must be enriched by follow up with the client.
The general rule that the file must be produced to the client upon request has some exceptions (like in cases of clients with diminished capacity).
As for what is considered part of the client’s file, the Committee chose to follow the majority “entire file” approach (and not the “end product approach”).
As for the duration of the retention, “generally a lawyer should maintain a copy of the client’s file for a minimum of six (6) years from termination of the representation or conclusion of the matter” (which is “the absolute minimum period”); special circumstances might require a “longer, even indefinite, period of retention.” In addition, “there are some contents that should never be destroyed.”
The Committee distinguished the contents of the client’s property into 3 categories. Category 1 is “intrinsically valuable property” (such as wills, powers of attorney, stock certificates, certificates of title, deeds, etc.). This type of property can be stored electronically but the hard copies cannot be destroyed. Category 1 must be “retained indefinitely unless the lawyer determines that the copy can be lawfully destroyed because it has been rendered useless and of no value by the client’s possession of the original, or by the proper recording of the original, or at the specific written instruction of the client, under circumstances where destruction of the property would not otherwise be illegal or improper. However, the best practice is that the lawyer should never destroy originals of Category 1 property. Where destruction is necessary and appropriate, the lawyer should deliver the original to the client or deposit it with the court.”
Category 2 is “valuable property” (depending on the circumstances present or future); examples are tangible personal property, photographs, audio and video recordings, pleadings, correspondence, memos, and business records. It can be stored electronically and after conversion, hard copies can be destroyed. This property “may be destroyed with the actual consent of the client or upon the client’s implied consent, which may be obtained by the client’s failure to take possession of the property on or within 60 days of a date established by the lawyer’s written file retention policy or as provided in a separate written notice, sent to the client’s last known address, advising of the date of the lawyer’s planned destruction or disposal of the property. Notice provided as part of the lawyer’s written file retention policy, which is affirmatively acknowledged in writing at the outset of the representation or upon termination of the representation, is presumed sufficient and no further notice or attempted notice is required prior to destruction or final disposition of the property.”
Category 3 is the “property that has no value or reasonably foreseeable future value” and which “does not fall into either Category 1 or Category 2.” As with Category 2, Category 3 also may be stored electronically without retention of originals. This property “may be destroyed after the minimum required period of time without notice to or authorization by the client. However, the best practice is for the lawyer to use the same notice procedure… prescribed for Category 2” when property is destroyed, the lawyer must maintain an index of the destroyed items.
If the lawyer maintains the file electronically, he “must ensure that the process is at least as secure as that required for traditional paper files. The lawyer must have reasonable measures in place to protect the integrity and security of the electronic file. This requires the lawyer to ensure that only authorized individuals have access to the electronic files. The lawyer should also take reasonable steps to ensure that the files are secure from outside intrusion…A lawyer must “back up” all electronically stored files onto another computer or media that can be accessed to restore data in case the lawyer’s computer crashes, the file is corrupted, or his office is damaged or destroyed. A lawyer may also choose to store or “back-up” client files via a third-party provider or internet-based server, provided that the lawyer exercises reasonable care in doing so (“cloud computing”.) [Th]ere are also confidentiality issues that arise with the use of “cloud computing.” Client confidences and secrets are no longer under the direct control of the lawyer or his law firm; rather, client data is now in the hands of a third-party that is free to access the data and move it from location to location. Additionally, there is always the possibility that a third party could illegally gain access to the server and confidential client data through the internet. However, such confidentiality concerns have not deterred other states from approving the use of third-party vendors for the storage of client information…The Disciplinary Commission agrees and has determined that a lawyer may use “cloud computing” or third-party providers to store client data provided that the attorney exercises reasonable care in doing so. The duty of reasonable care requires the lawyer to become knowledgeable about how the provider will handle the storage and security of the data being stored and to reasonably ensure that the provider will abide by a confidentiality agreement in handling the data. Additionally, because technology is constantly evolving, the lawyer will have a continuing duty to stay abreast of appropriate security safeguards that should be employed by the lawyer and the third-party provider.”
As for the production to client, “the best practice is to develop a procedure that integrates the various file formats into an organized, indexed and searchable, unified system, so that prompt access to and production of the complete file, regardless of its various formats, can be reasonably assured. Where a client has requested a copy of his file, the file may be produced in the format in which it is maintained by the lawyer, unless otherwise agreed upon or requested by the client.” The principle is that the lawyer should try to “accommodate the client” and cannot charge a fee for the production. The client is responsible to pick up the file and if client requests the file to be sent, the shipping cost can be charged to the client.
Rules: Rule 1.15, 1.16, 1.6 of the Alabama Rules of Professional Conduct
The full text is available at http://www.alabar.org…