electronic records policy

Law firms need to have an electronic records policy in 2021. Here’s why and how to adopt one.

Practicing law has always demanded a savvy understanding of innovation and an unrelenting thirst for knowledge. As 2020 brought new remote work conditions, virtual engagement, accelerated AI, and digital offices; pressure has mounted on the practitioners to equip themselves to stay aware of updated standards with regards to record keeping. This is not a matter of trends anymore: introducing a coherent electronic records policy is a serious monetary and competitive advantage for a law firm in 2021. Here’s why.

1)   Upholding Legal Mandates and Statutes of Limitations

Law offices traditionally kept mountains of paper files for however long the statute of limitations was depending on the case. For heinous crimes, it is even limitless. With the migration to digital and virtual exchanges, there are masses of new information being created every single day all of which may need to be stored. Without an effective policy on how to treat case-related information, vital evidence may be lost exposing clients or your firm to litigation or worse.

2)   Remaining Court Compliant and Easing Information Retrieval

Remaining Court Compliant

Federal and most state courts have adopted electronic discovery rules requiring the presentation of digital documents to the court at the beginning of litigation.

Improper electronic record keeping can weaken you and your client with questionable practice claims, penalties, and even presumptions of guilt. For example in Zubulake v UBS Warburg LLC, the case hinged on the employer having improperly preserved backup tapes and emails which would have substantiated the former employees’ case. As records weren’t kept in accordance with the state law, penalties of $175,000 were levied on the employer as it appeared they maliciously deleted evidence.

3)   Improving Accessibility, Accuracy, and Relevancy of Retained Information

The tendency for many firms who are unfamiliar with the digital territory is to simply store everything. This means records and information pile up eventually burying potentially critical information or rendering it inaccessible. Safe and intentional electronic record policies circumvent valuable information being lost.

An effective policy is also a cost saver. While it may seem simple to keep all digital records on a cloud, it is much less cost-effective. Whether you store online or physically warehouse hard-drives; both come with ongoing costs and are never free. Implementing a policy eradicates the storage of redundant information therefore lowering the long-term need for electronic record storage.

4)   Improve Employee Efficiency

Few things more frustrating in the legal profession than knowing the right proof exists but not being able to locate it in time. This is often the case with paper records and can be even more difficult with disorganized electronic records.

Increasing client demands and the need for immediate responses puts added intensity on the availability of all information. Having a messy system creates an unnecessary hurdle that may be costing clients. A systemized process, by which all associates abide, means that even when there is a scramble for information, everyone knows how things are filed and where best to look.

5)   Reducing Malpractice Insurance Fees

It may seem as though a slightly less important reason for introducing electronic record-keeping policies but depending on your malpractice insurance rates, you could save millions. Firstly, in the unlikely scenario that a malpractice suit is brought against you, having a well-maintained and accurate record of client interactions is paramount. Being able to retrieve specific information strengthens your defense significantly.

Secondly, malpractice insurance providers typically look at your record-keeping practices to understand how much care and attention you pay to your firm’s policies. Not having an electronic record, information retention or destruction policy give the impression that those are of lesser importance in your day to day operations. Unfortunately, to the insurer, law firms without carefully thought out plans represent a greater risk and therefore are charged greater premiums.

6)   Cybersecurity

The reliance of our world on online interactions and digital storage has regrettably been subjected to dark intentions. Data hacking, scams, and breaches are a growing threat and few industries rely more on discretion and confidentiality quite like law.

According to IBM, upwards of 90% of cybersecurity breaches are a result of human error. The report explains that the conditions for errors are fostered in the opportunities to make mistakes, the environment and company culture, and a lack of awareness. By developing thorough policies regarding digital behavior, safe practices, and electronic records, the risk of a data breach can be minimized.

So how should my firm develop electronic policies?

Assemble a team and draft a formal policy that needs to be subscribed to by all members of your firm. Be careful and attentive about what records are necessary and mandated, what information will need to be frequently accessed and what can be safely disposed of. Retention and destruction policies are often referred to in legal cases and can make all the difference when a case hangs on the retrieval of vital information.

The benefits of having a cohesive system make it very clear just how important an electronic records policy is but it is equally crucial important not to rush in development. A measured approach is always best, and 2021 will unveil how fast this transformation is going to proceed.

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