Recently I gave a presentation in New York (check out the agenda here) about how important it is for companies to establish and implement proper document retention plans.  A good document retention plan, when enforced and properly implemented, can provide a company with a safe harbor against subsequent claims of improper document destruction.

After my presentation, a few attendees came up to me and said that their lawyers told them to forget about implementing a retention policy because it would be better to either "save everything" or just "plead ignorance" if a document was destroyed, rather than follow a plan and possibly get into trouble for destroying documents.

I told those people that their lawyers are, shall we say, "less than competent. "  In truth, their lawyers are idiots or ignorant.  Or both.

The recently amended Federal Rules of Civil Procedure specifically state that absent "exceptional circumstances, a court may not impose sanctions . . . on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system."  You can see the entire Rule here.

Translation: if your company destroyed electronic records pursuant to a properly implemented document retention program, then (in all likelihood) the court will not—if fact, can not—impose sanctions against your company if it turns out that those documents were important (or even crucial) to litigation.

But don't go destroying your documents yet—you need a proper document retention policy, and then you need to enforce it.  There is no template or boilerplate retention policy that will fit all conditions for all companies.  Anyone who tells you differently is selling you something—probably a template policy.  Each company's procedures need to be examined on a case-by-case basis.

Here's headstart on drafting a good retention policy.  Print this out, read it, and then call your attorney.  Don't be surprised if you know more than your attorney does......

A word of caution: don't assume that you are permitted to destroy particular documents.  Sometimes the law requires you to preserve certain documents, in which case you need to keep those documents for the legally prescribed time period.  Check with your attorney (or post a comment) if you have a question about a particular type of document.

Ok, now for the educational portion of this post....

Good document retention policies must:

1.  Identify and define the reason for the policy, and briefly state how the policy furthers your company's legitimate business needs.
2. Identify all sources of documents, including networked computers, standalone terminals, and portable devices. 
3. Identify the department and, if possible, the individuals, who are responsible for enforcing the policy.   Do not spread responsibility so thin that no one takes responsibility for enforcing the policy.
4. Identify the destruction schedule, and ensure that logs are kept.   Remember: comply with federal and state statutes.  If the law requires preservation, then be sure to preserve the relevant documents (e.g., HIPAA, tax laws, etc.)
5. Communicate the policy to all employees who come into contact with relevant documents.  Be sure to emphasize "litigation hold" procedures, i.e., procedures to be followed when litigation is likely and/or when you first receive notice from your attorney to start preserving documents.  Litigation hold procedures should include:
   1. Contacting legal counsel immediately.  (NOTE: if legal counsel discovers the basis for the hold, this must be immediately communicated to the client. Failure to do so could result in sanctions against the attorney).
   2. Counsel should meet with the client's key players to determine what information needs to be preserved, the location of such information, and the people who may have such information.  Key players could include a "C" level officer (such as a CFO or CPO), a records management person, and an IT representative).
   3. Each employee who may have information should be notified of the litigation hold.
6. If records are preserved or maintained, consider establishing a method by which such documents can be searched without violating privacy rights, or incurring significant expenses.