File Management Practice Management Guideline

The Guideline is not intended to replace a lawyer's professional judgment or to establish a one-size-fits-all approach to the practice of law. Subject to Guideline provisions that incorporate legal, By-Law or Rules of Professional Conduct  requirements, a decision not to follow the Guideline will not, in and of itself, indicate that a member has failed to provide quality service. Conversely, use of the Guideline may not ensure that a lawyer has delivered quality service. Whether a lawyer has provided quality service will depend upon the circumstances of each case.

Table of Contents

  

3.1 Introduction

Effective file management provides the basis or infrastructure for timely, effective client service and appropriate management of client matters. The File Management Guideline sets out essential features of systems to manage client matters to ensure compliance with regulatory requirements relating to matters such as the preservation of client confidentiality and avoiding conflicts.

It offers practical suggestions for effective file opening and closing procedures, conflicts checking and storage systems and considerations relating to the retention and disposal of closed client files.

Back to Top 

 3.2 Terminology

The File Management Guideline uses the phrase “file management” in its broad sense to denote the general management of a client matter.

A component of client matter management is the handling or management of “files”. Historically, the term “file” referred to the physical paper folders which house the physical documents related to the matter.

Computer technologies enable some or all client information to be stored in electronic form.

In the electronic or computer environment, the equivalent of the physical paper folder, the “file”, is referred to as a “folder “ or “directory” and the corollary of a single paper document, is referred to as a “file” or “document”.

The principles in this Guideline are meant to be adaptable and flexible enough to support most law practices, regardless of the level of computerization.

Accordingly, unless specified otherwise, references to

  • “files” or “sub files” include both physical or electronic repositories of client information
  • “documents” include documents in electronic form
  • “systems” includes electronic and manual systems.
Back to Top 

  3.3 Essential Requirements

It is important that lawyers have and employ systems to

  • store and easily retrieve key information regarding all firm clients and opposing parties
  • open and maintain active client files
  • check for conflicts
  • check for limitation periods
  • close, retain, and dispose of closed files
  • review and if necessary change management systems to ensure they meet changing standards, techniques, or practices
  • identify clients’ property and place in safekeeping
  • comply with The Law Society of Upper Canada’s record and bookkeeping requirements.
Back to Top 

  3.4 Optional Requirements

Lawyers may also consider employing systems to

  • manage documents
  • ensure undertakings are satisfied
  • manage experts or other third party service providers.
Back to Top 

  3.5 Systems to Store and Retrieve Key Client Information

Lawyers should consider maintaining

  • databanks of key information regarding current and former clients including
    • client’s names, aliases, former names
    • date the file was opened and closed
    • subject matter of the file
     
  • information regarding conflicting or adverse parties including
    • names of persons related, or associated with a client, former client or the names of persons relevant to client or former client matters
    • cross references to the client or former client file name, file number, and matter reference
     
  • information regarding accounting and billing
      
  • information regarding key dates, a tickler or time management system.

Back to Top

  3.6 Opening and Maintaining Active Client Files

Opening and maintaining active client files requires the lawyer to

  • follow appropriate file opening procedures
  • organize file contents
  • properly store files.

3.6.1 File Opening Procedures

a) Determining When to Open a File

Lawyers should open a file when retained to provide legal services for any new matter for

  • new clients
  • current clients
  • former clients.

At the initial contact, whether or not the case is accepted, lawyers should consider immediately noting a limitation period, diarising it and advising the client if it is imminent. Lawyers should consider opening a file and preparing a memorandum when a person initially contacts the firm (usually by telephone) to obtain legal services.

b) Naming And Coding Active Client Files

Lawyers should consider having a method for obtaining information about the client and the opposing party(ies), usually at the initial interview or when the retainer is established. A file opening checklist is recommended.

Lawyers should assign a distinct file name and number to each file. The file name should include

  • name of the client(s)
  • reference or matter number.

3.6.2 Organization of File Contents

To enable efficient retrieval of file contents or information, lawyers should maintain organized file contents.

Organization of client files may include placing contents into sub-files according to class or type of documents. Each client file may contain sub-files for

  • communications, including: correspondence; memorandums to file or notes of conversations; meetings; or telephone calls arranged chronologically
  • substantive memorandums and investigations
  • original documents
  • retainer letter
  • firm accounts and billing information
  • legal research
  • undertakings to be satisfied
  • others, as appropriate to the file.

3.6.3 Storage Of Active Client Files

Lawyers should consider storing active client files (including electronic files or client information stored on diskettes), when not in use

  • in a location separate from where closed files are stored
  • in a secure or locked cabinet or location, filed in an orderly fashion for easy retrieval.

Lawyers should store all documentation related to the client matter in the client file.

Law firms may wish to consider implementing training for all professional and office personnel focusing on the importance of client confidentiality and the inherent risks of leaving files or diskettes containing client information on a desk or in an office unattended.

Electronic files should be organized with cross references to paper documents or files and vice versa.

Back to Top

  3.7 Preservation of Client’s Property

Section 3.5 of the Rules of Professional Conduct requires that a lawyer shall care for a client’s property as a careful and prudent owner would when dealing with like property.

A lawyer shall clearly label and identify the client’s property and place it in safekeeping distinguishable from the lawyer’s own property.

Lawyers should store in a secure or locked fire proof cabinet or location

  • original wills
  • powers of attorney
  • valuable client property, such as title deeds and securities.
Back to Top

  3.8 Conflicts Checking Systems

Section 3.4 of the Rules of Professional Conduct requires that lawyers manage potential and actual conflicts of interest. Lawyers should implement a system that allows the lawyer to check for conflicts

  • at the initial contact when the potential client first contacts the firm
  • after the first interview with the client or when additional information is available
  • any time a new party or person is added to the matter
  • when a lawyer is considered for employment by the firm.

Prior to searching for conflicts, the lawyer should determine who is the client(s) in situations including

  • where the matter is a joint retainer
  • client is a minor and requires a guardian, litigation guardian or trustee
  • lawyer is acting for both sides
  • matter involves the preparation of a power of attorney for the grantor
  • matter involves an estate
  • matter involves legal services for a institutional client such as a corporation or government
  • legal fees are paid by a third party.

The lawyer should also determine

  • identity of any other persons involved in or associated with the client in the matter
  • identity of the opposing party or parties
  • identity of any other person relevant to the matter.

The lawyer should consider preparing a list of potential business conflicts which, while not amounting to actual conflicts, should be considered before accepting the retainer. Examples of these types of conflicts might include a personal financial interest in a business or being a Director on a corporate Board.

When a potential client contacts the firm, the lawyer (or firm staff) should check the potential client’s name, and any other conflict or adverse party name provided by the potential client against the names in the firm data banks (data banks that contain the names of clients; former clients; adverse parties, related and associated persons).

If there is a match, the lawyer shall review the information and shall determine whether or not there is or is likely to be a conflict of interest.

If the lawyer determines that there is or is likely to be a conflict of interest the lawyer shall comply with Section 3.4 of the Rules of Professional Conduct.

If the lawyer cannot act for the client because of a conflict, the lawyer shall, in accordance with the Rules of Professional Conduct  

  • advise the client forthwith of the lawyer’s inability to take on or continue with the retainer, and
  • confirm the non-engagement in writing.

Back to Top

  3.9 Managing Documents

Lawyers should consider implementing and employing systems to

  • document every meeting, conversation or telephone communication, including telephone messages left and received, by way of dated file notation or memo to file
  • organize, identify and trace information, documents, evidence and property relating to each file or client matter.

In cases involving a substantial amount of documents or exhibits the lawyer may wish to consider the use of an electronic document management system.

Lawyers may wish to consider implementing a firm policy requiring that all files not in immediate use be filed away.

Back to Top

 3.10 Managing Undertakings and Trust Conditions

Lawyers should implement systems to ensure that all undertakings and trust conditions are

  • clear
  • confirmed in writing
  • recorded in the lawyer’s time management system
  • satisfied according to its terms, and
  • in accordance with Rules 5.1-6 and 7.2-11 of the Rules of Professional Conduct.

Lawyers should consider filing undertakings and trust conditions in sub files to ensure the undertakings and trust conditions are dealt with properly.

Back to Top

  3.11 Managing Experts or Other Professionals

If appropriate to the lawyer’s practice, the lawyer should consider implementing a system to manage the use of experts or third party service providers for client matters.

The information on the system may include a requirement that the lawyer

  • reach a consensus with the client and third party service provider and confirm in writing
    • approximate cost of the services
    • who shall pay for the services and ensure that the experts or third party service providers know who to invoice for payment of their account
    • in the event of default of payment, detail who shall be liable to the third party provider for the cost of the services instructions and note the acceptance of the instructions
     
  • review the report or opinions of the third party(ies) to ensure they provide the information sought

Back to Top

 

  3.12 Closing, Retention and Destruction of Client Files

3.12.1 File Retention Policy

Lawyers should have a file retention policy that

  • ensures the file is reviewed before closing
  • provides for the storage of closed client files separate and apart from active client files
  • ensures that client file contents are distributed, retained, and disposed of properly
  • assigns a new closed client file code to the file
  • provides for the destruction of the closed client file at the appropriate time.

3.12.2 When to Close Files

Prior to closing a file, the lawyer should ensure that

  • all the work that the lawyer was retained to complete has been completed or the lawyer has been discharged or withdrawn
  • the lawyer has reported to the client
  • the client has paid the final account or the firm has written off any balance owing on the final account
  • all undertaking and trust conditions have been satisfied
  • the lawyer has dealt with any balances to the credit of the client in the lawyer’s trust account

3.12.3 Distributing File Contents

A lawyer has an ethical obligation to care for a client’s property as a careful and prudent owner would when dealing with like property and must observe all relevant rules and law about the preservation of a client’s property entrusted to the lawyer.

The documents that must or should be provided to a client upon the termination of a retainer is a matter of law. Lawyers may wish to consult the Guide to Retention and Destruction of Closed Client Files for Lawyers on the issue of document ownership.

Unless previously provided to the client or otherwise agreed with the client, prior to closing the file, lawyers should return to the client all property that the client provided to the law firm during the course of the matter together with all documents or other property that was obtained in connection with the matter. The lawyer may consider having the client sign an acknowledgment indicating receipt of the documents.

When a lawyer transfers a file upon discharge or withdrawal from representation additional considerations apply. In such cases, subject to the lawyer’s right to a lien, the lawyer must deliver to or to the order of the client all papers and property to which the client is entitled and must give the client all information that may be required in connection with the case or matter. In addition the lawyer must cooperate with the successor lawyer or paralegal so as to minimize the expense and avoid prejudice to the client [Section 3.7 of the Rules of Professional Conduct].

3.12.4 Retaining Client Files

Before returning documents to the client, the lawyer should determine whether to retain copies of the closed file documents. In making this determination, the lawyer may consider such factors as

  • any legal requirement to preserve the document
  • the likelihood of the lawyer requiring the document in future
  • the provisions of the retainer agreement
  • whether the client has its own records retention policy and, if so, the length of time that a document is preserved under the policy
  • the client’s wishes.

Client files that should be retained and the length of retention will be determined by the particular circumstances taking into account

  • whether other sources are available to obtain information contained in the file such as information stored in Registry Offices or court records
  • a lawyer’s potential liability for errors and omissions
  • any applicable limitation periods.

The lawyer should keep in closed client files

  • retainer documents
  • correspondence, including e-mail, memos or notes relating to communications
  • documents prepared by the lawyer for the client
  • drafts of documents prepared by the lawyer for the client if the document confirms client instructions and if the lawyer reasonably believes that this might be an issue in the future
  • a list of case law
  • time entries/dockets
  • law firm’s accounting records relating to the client matter
  • records of client property as required by By-Law 9

The lawyer should review the firm’s file retention policy to determine whether to keep a copy of the following in the closed client file:

  • client documents existing prior to the retainer
  • court documents
  • documents from the opposing party
  • discovery and trial transcripts
  • expert’s reports
  • corporate minute books and seal

The lawyer should consider retaining documents to serve as precedents.

The lawyer should assign a closed client file code to the closed client file.

lawyer should send the closed paper files to a storage location.

3.12.5 Storage

Lawyers should store closed files in secure cabinets or locations

  • separate or apart from active files
  • to protect the files from destruction or damage
  • to maintain client confidentiality
  • filed in an orderly fashion for easy retrieval.

If the lawyer stores closed client files in an off-site storage location, the lawyer shall ensure that client confidentiality is protected and maintained.

3.12.6 Retrieval of Closed Files

In the event the file is transferred to the client or other counsel, the lawyer should discuss with the client

  • whether or not the client will be charged for
    • time and effort in preparing the file for transfer
    • additional photocopies of file documents
     
  • if closed and in storage, retrieval of the file
  • restrictions on file transfer if accounts remain unpaid at the time of transfer.

3.12.7 Retrieval of Electronic Files

The lawyer should ensure that closed electronic files are stored or saved in a form or format that will be retrievable in the future.

3.12.8 Destroying Client Files

Lawyers should consider whether the client file should be retained indefinitely or whether it will eventually be destroyed.

If the client file is to be destroyed, the lawyer should determine

  • date the file is to be destroyed taking into consideration
    • any legal or regulatory requirements to maintain certain file contents
    • limitation periods relating to the lawyer’s potential liability for malpractice, or misconduct
     
  • manner of file destruction to preserve confidentiality.

Lawyers shall maintain client confidentiality when client files are destroyed.

3.12.9 Reviewing File Management Systems

Lawyers may consider drafting and maintaining a current office manual setting out the systems and procedures for the lawyer’s practice.

Lawyers may also consider reviewing and, if necessary, updating as required

  • all practice management systems
  • firm checklists, substantive and procedural
  • precedents.

Lawyers should consider training for firm personnel in the proper use of office systems and implementation of procedures.

Back to Top