A nagging professional responsibility and risk management problem for lawyers is determining how long to maintain client files and how to properly close them. This article addresses the first half of the question -- how long to keep files after a matter is concluded (i.e., no more billing will occur). The second half of the problem will be covered in our next newsletter.
The first consideration in file retention is to ascertain which matters have a prescribed retention period. Kentucky Rule of Professional Conduct 1.15 Safekeeping Property provides that complete records of client trust account funds and other property "shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation." Pretty clearly if a lawyer is subject to producing this information on a representation for five years (presumably because of a bar complaint) the rest of the file will be needed as well. Accordingly, the minimum recommended file retention period for Kentucky lawyers is five years. Additionally, keep in mind that federal and state law may require that files be retained for specific periods of time (e.g., the IRS, SEC, certain corporate matters). The US Government Printing Office has available The Guide To Record Retention Requirements covering the Code of Federal Regulations file retention rules.
Some experts recommend five years as a rule of thumb for file retention. Others say 10 years if no other compelling considerations control. We recommend the more conservative 10 years retention period. Certain files could require even longer retention to include forever. Examples are:
Source: Keeping Client Files, Oregon State Bar "In Brief," January 1996 and "Malpractice Prevention Guidebook," Lawyers Mutual Liability Insurance Company of North Carolina.