The smaller your practice, the more likely it is that you have limited space and time. It is also likely that you are creating and receiving records and files in every type of media. So what do you do with it all?
Records management is essential for efficiency, access, and, most importantly, limiting liability for your practice. While you might be tempted to keep all your office’s records and files forever, retaining old information longer than necessary can backfire.
One of your first steps when planning records management for your firm is to determine the difference between records that you need to keep for a long period of time, such as those relating to wills; transitory records you can keep for a short amount of time, such as receipts or billing statements; and items that are not records, such as advertisements, published reference material, or invitations. It might help to consider that the definition of a record relates to its ability to document a transaction, to provide accountability, to contain/retain context, and that it is, by and large, “fixed” and unchangeable in its form. A record is what we rely on to prove and demonstrate the authority of actions or events that have occurred, and it is a “record” regardless of medium.
A second step in records management, recommended by the Law Society of Upper Canada’s manual on file retention, is to know which records belong to your practice and which to your clients. For instance, financial records belong to your practice and you can determine how long to keep those records in accordance with taxation legislation and any legislation governing legal practice in your province.
Thirdly, records fall into active and semi-active categories. Definitions of what constitutes an “active” file will vary depending on business needs. If a file has not been used within a year, it is likely semi-active. Consider your own firm: do you have a large number of infrequently used records? Perhaps you would be better served by having a records storage area exclusively for semi-active records, for the sake of both space and office workflow.
Striking a balance: retention and risk
When you decide how long you will keep records, you are deciding on the records’ retention. While some retention periods are set out in legislation (e.g., tax records), for most records, you determine the retention period on a case-by-case basis, depending on the value of the record and various risk factors.
Analyze risk in the context of value: define the usefulness of a record in business terms. Let’s say you buy a filing cabinet for your office. Within a limited time, you can use the receipt to exchange the filing cabinet or get a refund; the value of the record is based on the time limit to return the item. If you can use this purchase for tax purposes, then the value of the receipt will extend based on its use as proof for Canada Revenue Agency. Following that, however, it will have exhausted its business value and should be destroyed.
Risk, or rather, calculated risk, is part of records management. Keeping records for too long can result in liability due to legal action, inadvertent loss, financial issues or simply being unable to find the information you need. Keeping records for too short a time can also lead to liability (as in the case of being unable to produce financial records for an audit). Before you set retention periods for your records, decide how much risk you will accept. Risk can be managed more astutely if you have a firm set of principles and decisions which guides your record-keeping. If you have a standardized plan you act on consistently, risk can be mitigated.
Why make a records management plan?
A records management plan, in the form of a policy or set of procedures, will incorporate risk, research into legislation related to retention, and a sound understanding of the records you generate. Written procedures remind you and any other staff about your practice’s records management approach, and will demonstrate that you are acting in good faith consistently, especially regarding the destruction of records.
Steps in making the policy or procedures
Every office should be aware of the information it creates, distributes, and maintains: to accomplish this, create an inventory of all the records, paper and electronic, under your custody and control, and then assign retention periods to records. This will serve as your retention schedule, an at-a-glance guide detailing all the records you have and when they should be destroyed. It’s a good idea to keep detailed notes of your research on retention to assist with ongoing retention scheduling.
Ongoing maintenance and storage
Once you have a records management plan in place, it is important to keep up with regular clean-up of files. Dedicate a set amount of time to organizing records for a few minutes each week, or an entire day once a year. Be sure to double check your retention schedule at this time. Do you have anything that should have been destroyed?
Don’t forget your electronic records! They will have the same retention as the paper files. Managing electronic files begins by creating file-naming conventions. A consistent and formalized naming pattern will help you store and locate particular files.
There are two options for storing files. Onsite storage requires secure, clean, and pest-free physical space in your office. Any files relating to clients should be maintained in a confidential manner, preferably in secure areas. Commercial offsite storage is the second option: it is clean, secure, and offers certified destruction. But there are drawbacks: costs can spiral quickly since most storage services will charge fees for retrieval and delivery which can add up over time.
Planning and consistency are essential for successful records management. Remember, too, that accepting some calculated risk based on professional best practices is key to maintaining your records management plan.
Further resources:
“Closed Files: Retention and Disposition” (Law Society of British Columbia), 2007.
“A Glossary of Archival and Records Terminology”
Kerry Mogg has worked as an archivist and records manager. She currently works in the area of access and privacy in healthcare.
Elisabeth Davies, PhD., is a library and information science researcher at the University of Western Ontario.