Make retirement easier – plan now (part one)

We know, it’s likely that you haven’t practiced very long; maybe you plan to practice for another 20, or 30, years. Great! We hope you have a very long, productive and happy career. What we want to talk about today is taking steps even as you start out to make your ultimate retirement an easier process.

If you’ve talked to us at Practice 2.0, or checked out our materials at http://www.azbar.org/practice20, you’ve likely seen our information and sample language on file retention. So we realize that you are “on notice” that this is an important issue. So why are we talking about it again? and so specifically? It’s remarkable to us how many lawyers have not informed their clients about their file retention policy; even more remarkable is how many lawyers haven’t really considered it, and don’t until they start actually planning to retire.

If we had one dollar for every lawyer who calls us asking what to do with the (supply your own large three- or four- digit number here, we usually go for 1,000) boxes of client files they’ve accumulated and stored during their practice, well, we’d have lots and lots of dollars. If the first time you think about what to do with those files – and remember, they are the client’s files – a few months before you plan to wind down and close your practice, you are likely in for a rude shock when you hear your obligations. If you were foresighted early on, and put your file retention policy in your fee agreement or engagement letter and then again in your closing letter, you are way ahead of the crowd.

Hopefully you’ve abided by your own policy and first, have not retained any original documents or property belonging to the client; or second, have provided the client with their file during the representation with adequate advice that this was their file and they needed to safeguard it; or lastly, have provided the client’s file to them at the conclusion of the matter, or as a courtesy offered them the file at the close of the retention period, or just destroyed the file as appropriate after the close of the retention period. (Brief reminder – there may be case law, rules or statutes that require you to keep either the whole file or parts of it after the expiration of the retention period.)

But if you never formulated a retention policy, and/or never advised the clients of it, and still have your client files – well, you’ve got some work to do before you can close the doors, throw away the key and head into blissful retirement. First, if you haven’t maintained an inventory of the files, now is the time. Of course, we are going to suggest that you do this electronically (no sense in creating more paper) and an Excel spreadsheet is a great, searchable way to do it. If you have practice management software, you should be able to generate a client list as well, but we are going to assume that if you are looking at stacks and stacks of banker boxes, you’ll be doing this old-school.

Next, you’ll have to try to notify the clients of your impending retirement and give them the opportunity to take possession of their file(s). If you are thinking, but I don’t know where they are – they may have moved a dozen times since I last saw them, we do feel your pain. You’ll have to make a good-faith attempt to reach them – for example, mail to their last known address, then if it’s returned, some searching online to see if you can figure out their latest address. Do you have to hire a private investigator? Probably not. We have good imaginations and can think of some unusual scenarios under which that might be necessary – but here we are talking about the mainstream situation.

If you cannot find your former client, or if they do not get in touch with you or claim their file, do you get to destroy the file? Sorry, but no. If the file is not claimed by the client, it is now unclaimed property under the law and you’ll have to retain it for the statutory period which is usually somewhere between two and three years before considering it abandoned. Yup, that’s a long time when you are just chomping at the bit to get to your chosen retirement haven.

So, what is the moral of the story? If you have a fee agreement or engagement letter that does not recite your file retention policy in very plain English, it’s never too late to include it. It won’t help you with the old files you already have but it will prevent you from accumulating any more files you’ll have to safeguard for far longer than you wish. Need more information or want us to review your fee agreement? Contact us at Practice 2.0 at 602-340-7332, or Practice20@staff.azbar.org. We’re here to help.

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