Why is Records Retention Important?

by Cheryl Young, Records and Solutions Information Architect. Océ Business Services is a member of the San Diego Chapter of SoCalPROS.

An effective records management program can potentially save an organization – including law firms, their clients and in-house counsel – millions of dollars by preserving responsive records and disposing of obsolete records in systematic, consistent processes that can be defended. This helps avoid fines from courts or auditors. Ignorance of records retention requirements is no longer an excuse with the publication of the Sedona Guidelines, ISO 15489, the Federal Rules of Civil Procedure and state level adoption of the Federal Rules. So that begs the question: What are the elements of a good program?

One vital ingredient is the right approach to the retention of records. When it comes to a retention schedule, most companies either don’t have one or they don’t enforce it. This can be costly in terms of monthly records storage fees that pile up for many years. It can also be risky, leaving an organization vulnerable to litigation or discovery with regard to documents that should have been destroyed. So if your organization needs to create or re-think its retention schedule, here are some key objectives to keep in mind:

Control documents and other materials from creation through storage to destruction/archiving. Included are correspondence and other documented materials, which have historical or operational value or are essential to the conduct of business.

Provide recommendations to eliminate duplication and ensure preservation of official records.

Establish a records inventory that will indicate the type of record being retained, whether hardcopy or in electronic. Employees need to be interviewed regarding the degree of reference activity.

Provide specific record retention periods for each type of record based on Federal and State regulations, counsel opinion, fiscal and operating requirements. All documents should be considered, such as corporate files, accounting and correspondence, and a business value determined.

Select and recommend which records are considered to be part of the Vital Records Protection Program and indicate the most economical methods of protection.

Evaluate the use of electronic storage media, file tracking systems and improved offsite storage techniques.

It’s good to remember that if there’s no schedule being followed, there is no compliance. When considering a records retention policy, companies often ask about the typical steps that go into creating one. Here is a high-level look at what usually occurs during the creation of a policy:

• Records Inventory – a comprehensive inventory of all department records. This inventory will include a survey of individual records series in all designated departments. A record series is defined as documents or records that are filed together in a unified arrangement relating to a similar function or activity.
• Scope of the Inventory – a complete set of record retention periods for all active records based upon analysis of records inventory data will be prepared.
• Appraisal of Records – retention periods to govern the disposition of all records series will be established. These retention periods will reflect an assessment of the operational/administrative, fiscal, legal, research and historical values of the records.
• Creation of Classification Scheme/Taxonomy/File Plan – a classification scheme or taxonomy is analogous to a chart of accounts in that it standardizes how specific record series will be named. It applies to both hardcopy and electronic records and is developed after the inventory is complete.
• Development of Schedule – set of disposition instructions prescribing how long, where, and in what form a records series shall be kept.
• Vital Records – a records program involves the selection and protection of those records, which if lost or destroyed, would result in serious legal, regulatory, financial or operational consequences.

For further information contact Cheryl Young, Records and Solutions Information Architect, at cheryl.young@oce.com or Joseph Reges, Sales Manager, Western Region, USA, at joseph.reges@oce.com. Océ Business Services (www.obs-innovation.com) is a leading provider of document process management services and technology to legal organizations as well as businesses and the government sector.