Recent legislation - particularly the Sarbanes-Oxley Act, amendments to the Federal Rules of Civil Procedure, and the recent trend toward increased focus on corporate misconduct and malfeasance - make it imperative that business entities create and adhere to a formal document retention policy. In addition, a variety of Federal, State and local regulatory agencies detail specific requirements for retaining certain categories of documents. Necessarily, this can prove to be an extremely risky proposition. The benefits of properly constructed and implemented document retention include:

• Ensuring that all critical legal and business records are retained;
• Allowing the company to meet legal requirements;
• Preserving the records in authentic format in the event of litigation;
• Avoiding liability (for example, through spoliation—improperly destroying or altering evidence or failing to preserve it);
• Reducing or limiting costs during discovery;
• Keeping internal documents confidential.

Any document retention policy will necessarily be unique to the organization, and will be strongly influenced by the nature of the company’s business, the type and volume of records it creates and uses, and the sources of data and information from which the records are derived. Creating such a policy can be painstaking and time-consuming and requires, at a minimum, input from business, legal and technical stakeholders, along with guidance from records-retention specialists. An effective retention program will describe the scope of the policy. Are individual departments affected differently, or does the policy apply to the organization as a whole? Are there exceptions to the policy, and if so, how are they defined? What are the retention periods, retention methodologies (e.g., storage, format and location), and procedures for destroying documents? How are confidential materials and employee privacy considerations handled? What procedures are in place to take care of litigation holds? A thorough and effective retention program must answer these questions as well as many others.

In addition to the foregoing, companies should be mindful of the fact that their document retention policies (especially for electronic media) will likely be requested and carefully scrutinized by opposing counsel in litigation. Corporations that fail to implement a successful retention program will almost certainly face strict opposition and challenges from opposing counsel—a tactic which, unfortunately, will quickly divert the focus away from the true issues at hand.

In next month’s issue, we will explore the specific steps involved in the development of a formalized document retention program in the digital age.

Until then, please feel free to contact the authors, Robert Miller, Esq. or James Crane, Esq. with any questions or considerations.

Questions? Contact the author: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Robert Miller, phone: 832-785-7535, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
James Crane, phone: 303-582-4621, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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