File closing, retention and destruction procedure for law firms

File closing, retention and destruction procedure


LAW 9000 – Legal Best Practice

4.2.6.1 Control of matter files

1. Purpose

This procedure establishes guidelines for closing of a client matter file and its subsequent retention and

destruction.

2. Scope

The procedures starts with a final review of the matter file by the acting lawyer before its closing and

finishes with its destruction.

3. Persons affected

All professional and support staff.

4. Policy

It is our policy that we provide our clients with copies of all relevant documents relating to the matter

at all stages of their production. Before closing a matter file all client instructions should have been

followed, all legal steps should have been completed and all client documents should have been

returned to the client. A breach of this policy could have serious consequences from a risk

management perspective on our ability to defend claims.

5. Definitions

Client matter file - means the collection of all paper and electronic documents and any non-

documentary items relating to a particular client matter.

File closing date - means the date on which the acting lawyer has determined that the matter has

been completed and from which the file destruction date is determined.

File destruction date - means the date on or after which a file may be destroyed.

Acting lawyer - means the lawyer who has been assigned primary responsibility for the matter.

6. Responsibilities

(a) All lawyers and support staff are responsible for ensuring compliance to this procedure.

(b) Acting lawyers are expected to adhere to the guidelines of this procedure when closing a

client’s matter file.

(c) The accounts department (or specify Staff Role) is responsible for checking the accounts

balances and placing the file in storage.

Issue Date: Author: Val Antoff Review Date: Approved by: Val Antoff


7. Procedure

Acting lawyer

7.1When a matter has been completed, the acting lawyer shall determine the file closing

date and the file destruction date.

7.2The acting lawyer is responsible to take the following steps before authorising the closing

of a client matter file:

a) Place any loose unfiled paperwork securely in the file.

b) Retain one exact copy only of any given document and destroy the other copies.

Amended drafts are considered different documents and must be retained.

c) Ensure that every legal step under the retainer - including all variations - has been

completed:

i) all documents have been stamped or registered

ii) court orders/judgments have been delivered and disclosed to the client or served

on other parties

iii) counsel's brief has been returned with all original or copy documents

iv) all exhibits tendered in court have been retrieved

v) all property and original documents have been returned to the client

vi) all work undertaken has been properly billed to the client

vii) a final account has been rendered and all outstanding disbursements have been

paid

viii) any balance owing on the final account has been written off

ix) No money is still standing to the client's credit in the trust ledger for this matter

x) a final trust account statement has been sent to the client

xi) all undertakings have been satisfied

d) Print all e-mails and documents sent or received by e-mail (or save on CD) and store

with the file.

e) Delete duplicate copies of electronic versions of documents that have been saved in

the practice’s electronic document management system.

f) Attach a record of the client’s property that was returned to the client to the file.

g) Print copies of all trust account records and place securely in the file (to be retained

for 7 years)

h) Determine whether there are any documents that should be used as precedents and

placed in the practice’s electronic document management system for future use.

i) Scan the entire file for electronic storage.

j) Advise client of the date on which the hard copy file will be destroyed so they can

collect it before the destruction date.

k) Complete and submit the “File Closing” checklist (Appendix 2) together with the

matter file to the accounts department for further action.



Accounts department

7.3The accounts department (or specify Staff Role) must complete the following steps:

a) Confirm on the "File Closing" checklist that the Trust and Office accounts for the client

have "nil" balance. Unless the “File Closing” checklist contains all the required

information the checklist will be returned to the lawyer for completion.

b) Attach the complete “File Closing” checklist securely to the matter file.

c) Remove the closed file from Current Files section of File Register.

d) Change status in client management system from Active to Inactive.

e) Place the file in storage.

Drafting a final letter to client

7.4The acting lawyer must draft a letter to the client including the following information:

a) the representation is concluded

b) the file has been closed

c) the client is entitled to collect the file

d) the file’s designated destruction date

e) arrangements for storage and retrieval of file or of any remaining duties or obligations

of the client

f) a copy of client satisfaction survey with pre-paid self-addressed envelope.

Retention Periods

7.5The following retention periods must be observed:

Trust accounts records and files to which trust transactions relate are to be retained

for 7years from the date of the last entry (Legal Profession Regulations 2009 WA).

Tax records must be retained for 5 years from the date on which the document was

prepared or obtained, or from the date of the relevant transaction, whichever is the

later (Income Tax Assessment Act 1936 Cth).

Financial records must be retained for 7 years after the completion of the

transaction. Incorporation records should be returned to the client corporation for

safe custody (Corporations Act 2001 Cth).

Contract and tort actions must be commenced within 6 years but consideration

should be given to the provisions relating to extensions of time (Limitation Act 2005

WA).

Matter files to be retained indefinitely

7.6The following categories of matter files must be retained indefinitely

Estate plans and wills

Leases

Mortgages

Adoptions

Financial Agreements



Clients under a Disability such as infants and Persons Under A Guardianship Order

Trusts/superannuation deed

Workers’ compensation

Partnership agreements

Unregistered easements

Unregistered unrevoked Powers of Attorney.

Client's request to collect file

7.7If a client requests the collection of a file during the file's designated retention period:

a) [Staff Role] is responsible for authorising the release of the client’s matter file.

b) [Staff Role] is responsible for copying the file (If not already scanned for electronic

storage).

c) The cost of copying the file is the practice's responsibility.

d) If any costs are involved for the retrieval of the client’s file from an external storage

the client should be informed of the costs in advance.

e) The cost paid to retrieve a file from an external storage company is a disbursement

which should be charged to the client.

f) The file will be released to the client upon payment of all associated costs.

g) [Staff Role] has responsibility for obtaining a signed receipt for the file when collected

by a client and that receipt should be retained with the practice’s copy of the file.

See Appendix 1 for examples of documents in a client file and how a lawyer should deal

with these documents.

Destruction of documents

7.8Before destroying a matter file it is the responsibility of [Staff Role] to:

a) Review the file and confirm that all necessary steps have been taken to ensure that

all original documents have been returned to the client.

b) Check that all relevant time periods have expired.

c) Record in the client management system the date and method of destruction and

upon whose authority it was destroyed.

d) Shred hard copy files and destroy CDs in a manner that ensures that no breach of

client confidentiality can occur.

Suspension of Destruction Date

7.9The file destruction date shall be suspended in the event of any of the following that

relate, directly or indirectly, to the matter:

a) an actual or potential claim made against the law practice

b) a discovery request relating to the client or the law practice

c) disputes concerning the law practice’s professional fees

d) complaints made to the Law Society



Appendix 1

Examples of documents in a client file and how a lawyer should deal with these documents

Client’s Documents

Subject to the right of the lawyer in appropriate circumstances to claim a lien, a client is entitled to:

Documents existing before the lawyer was retained

Originals of documents prepared by the lawyer for the client pursuant to the retainer such

as a last will, power of attorney, an agreement, transfer and charge

Personal property of the client such as corporate seals.

Other Documents

Subject to the right of the lawyer in appropriate circumstances to claim a lien, a lawyer in

accordance with the law should either return the following documents to the client or give the client

reasonable access to these documents:

Copies of letters received from third parties

Copy of letters sent by the lawyer to third parties

Pleadings

Briefs

Memoranda of law

Pre-trial Memoranda

Draft documents prepared by the lawyer for the client

Document books

Receipts for disbursements made on behalf of the client

Experts’ reports

Discovery and trial transcripts.

Lawyer’s Documents

The lawyer is entitled to the following documents:

Original correspondence from the client including instructions from the client

Copies of correspondence sent to the client

Working notes, summaries or evidence and submissions to the court

Tape recordings of conversations other than with witnesses

Inter-office memoranda

Time entries

Accounting records and parts thereof that relate to the client matter

Notes and other documents prepared for the lawyer’s own benefit or protection and at the

lawyer’s own expense.

Appendix 2



File closing checklist

Lawyer to complete

Have you placed all loose unfiled paperwork securely in the file?

Have you removed unnecessary duplicate hard copies?

Have you deleted duplicate copies of electronic versions of documents that have been saved in the practice’s electronic document management system?

Have you completed all work under the retainer agreement?

Have you stamped or registered all documents?

Have you delivered and disclosed to the client or served on other parties court orders/judgments?

Have you received the counsel's brief with all original or copy documents?

Have you retrieved all exhibits tendered in court?

Have you returned property and documents belonging to the client or third parties?

Have you prepared a record of the client’s property that was returned to the client?

Has all work undertaken been properly billed to the client?

Has a final account been rendered to the client?

Has the account been paid or have you written off any balance owing on the final account?

Have you dealt with any balance in the trust account?

Have you sent a final trust account statement to the client?

Have all undertakings been satisfied?

Have you determined whether there are any documents that should be used as precedents and placed them in the practice’s electronic document management system for future use?

Have you printed all e-mails and documents sent or received by e-mail (or saved to CD) and stored them with the file?

Have you printed copies of all trust account records and placed them securely in the file (to be retained for 7 years)?

Have you scanned the entire file for electronic storage?

Have you established a file destruction date?

Have you established a file review date to review the file prior to destruction?

Have you postponed the file destruction date is postponed where there are changes in circumstances during the file retention period that necessitate a postponement of the date?

Have you entered these date(s) into your practice calendar/client management system?

Have you advised the client of the date on which the hard copy file will be destroyed so they can collect it before the destruction date?

Have you sent a final letter/report to the client?

For Action by Accounts Department

The Trust and Office accounts for the client have "nil" balance.



Attach this checklist securely to the matter file.

Remove the closed file from Current Files section of File Register.

Change status in client management system from Active to Inactive.

Place the file away in storage.

Lawyer to Review the File Prior Destruction

Have you reviewed the file before destruction to determine if the destruction date should be changed?

Have you destroyed the file in a way that will maintain lawyer/client confidentiality?

Have you recorded the date and method of destruction in your client management system?

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File closing, retention and destruction procedure for law firms

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