Shoddy Records Management Can Expose Lawyers to Costly Liability Lawsuits
WARREN, NJ, February 27, 2006 - "Law firms that have not developed a good records management policy may fail their clients
and be faced with a costly liability lawsuit," said James Rhyner, vice president, Chubb & Son, and global lawyers professional
liability product manager, Chubb Specialty Insurance. "Proper documentation is part of the foundation of the legal profession-both
electronic and paper records must be retained and stored according to state and federal laws. In the wake of the Sarbanes-Oxley
Act and other new reporting laws, the pressure has further increased on law firms to employ best practices for document storage
and disposal."
Chubb's new handbook, A Lawyer's Guide to Records Management Issues, is designed to help law firms evaluate and manage their
records management policy. The handbook reviews the ethical, legal and practical issues of document retention, as well as
electronic documents and case and information management.
"Hurricane Katrina increased law firms' awareness of the importance of proper records retention," said Rhyner. "One natural
disaster can quickly destroy an entire facility, including all of the firm's records. Chubb's handbook helps law firms better
understand that while there is no one 'silver bullet' for records management, several considerations can help a firm build
a suitable records management policy."
According to Rhyner, many small and medium-sized firms leave it up to each individual attorney to decide what to document
and whether to store or destroy a document. "If important documents are stored in a carton that is inaccurately coded and,
therefore, can't be found and produced in a timely fashion, that can lead to adverse jury instructions, a mistrial or even
the dismissal of the claim," said Rhyner.
Chubb's handbook notes some issues law firms should consider when developing a records management policy, including:
- Carefully review the ethical and legal obligations required by each jurisdiction for fiduciaries; stay abreast of new developments.
- Understand the file ownership rules, as well as the statute of limitations, in your state.
- Maintain paper records and electronic records, such as email and voice mail, in a consistent manner.
- Be organized: Know where all the documents are stored and note if a file has been returned to a client or when a document
needs to be destroyed.
- Look at alternative means of storing documents, such as electronic storage. Carefully consider remote storage facilities,
which also can be threatened by natural catastrophes.
- Firms without a risk manager should appoint an individual to oversee its records management policy.
- Train all employees on the records management policy.
Chubb's A Lawyer's Guide to Records Management Issues is part of a series of handbooks developed to help law firms manage
risk. For a copy of the handbook, visit http://www.chubb.com/businesses/chubb3331.html.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,000 independent agents and brokers. Chubb's
global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.
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