14.10 – Establishing a File Storage System

Regardless of whether you keep paper files, digital files, or a combination of paper and digital files, it’s imperative to have an organized file storage system. This, again, is in keeping with your obligation to provide quality service.

Whether beginning a file management system from scratch at the start of your practice or switching from a paper to a digital system after years of using a paper filing system, we strongly advise that you take the time to determine the best system for your practice. The time spent at the outset will allow you to ensure that the system you implement is easy to use, allows easy access to needed documents, and will serve you into the future.

The following are steps you may take to establish a file storage system, whether paper or digital. If implementing a digital legal filing system, some of the steps listed below may be automated for you. The order of the steps is somewhat flexible; you may find reordering components of the listed steps better suits your approach.

Step 1: Evaluate your office space and determine what area is best suited for storing files.

• If you share space, take proper steps to ensure client confidentiality is maintained—at a minimum, use locked cabinets.
• If you are a sole practitioner, a centralized filing system may be preferable but if you are in a small firm, it might make sense to locate files in proximity to the lawyers and staff who are working on them.
• If you deal with some highly sensitive information, you should take extra precautions to ensure the confidentiality of this information (e.g., shredding).
• Avoid storing files in the lawyer’s work area, as it may be difficult or awkward for others to access the files.
• Avoid storing files where clients are met, as this may also be difficult or awkward for others to access the files. Further, storing files in areas the client can access can compromise confidentiality.
• Consider that you will potentially have three types of files on site and that these different types of files should be stored separately from each other:

1. active client files;
2. closed client files; and
3. non-client files (e.g., precedents, employment records, financial records, etc.).

Step 2: Establish a file storage classification system.

This refers to the system for locating files. The three principal types of file storage classifications systems are:

• Alphabetical: File alphabetically by client’s last name and include a reference line (e.g., Cruise, T.—re Libel (v. Hubbard, Elrond (a.k.a. “Old Mother”)). The advantage of this system over a numerical system is it does not require cross-referencing a file number against a client list to locate the file. It also allows you to store all of a client’s files together.
• Numerical: Files are assigned numbers and may be based on such things as the calendar (2003-2), a permanent number assigned to a client followed by an individual matter number (162-1, 162-2, etc.), or other systems. Although it is possible to only list a number on the file label, thereby enhancing privacy, such a practice is not recommended. There is a greater likelihood of misfiling under the numerical method, and you will have to reference an alphabetical client list.
• Alphanumerical: There are several approaches, including a combination of letter from a surname and a sequentially assigned number (e.g.,”FLE-007″). The alphanumeric system is not recommended.

For greater detail, see Jackie Morris and Gail Myers, Law Society of British Columbia, “Opening and Maintaining Client Files,” revised by David J. Bilinsky and Jackie Morris, updated June 2006.

Whichever system you adopt, consider the value in:

• ensuring each file has a matter reference in addition to an identity. This will be of particular value as you get repeat work from clients and wish to quickly differentiate between their files. The more detailed the keywords in your reference the better you can integrate this into your conflicts checking system. For example: Smith, John re: Personal Injury, MVA is less descriptive and useful for the purpose of checking conflicts than Smith, John (a.k.a. Jack) re: Personal Injury, MVA; (v. Johnson, Marty, K.);
• storing files by area of law when you practise in more than one area of law;
• colour-coding your files by area of law (keep an index near your filing area that indicates what each colour designates); and
• ensuring that the computer software you use supports the type of system you have adopted.

Step 3: Establish a file classification system and protocol.

• Create a file-opening book that includes:
  • sequential file numbering;
  • the file name;
  • the date the file opened;
  • (in a multiple lawyer firm) the name of the responsible lawyer;
  • the name of the client, along with contact information;
  • the subject matter/reference;
  • the name of opposing counsel and interested parties; and
  • a space for file closing date, along with retention and destruction instructions.
• Create a checklist for file opening and closing, including where material gets filed, and create file-opening and file-closing sheets.
• Be sure to enter client and new file information in your file-opening book, or your computerized list of clients and files, upon completion of the file-opening sheet.
• Review all documents before placing them in their file.
• Try to establish a system that keeps files moving along and getting filed in a timely manner, rather than allowing for a backlog of filing to build up. Once you have dealt with the matter, create the appropriate bring-forward on the file and in your system, then return the file to the file cabinet.
• Ensure you open a new file for each new client matter, as well as each new client.
  Create accounting records for each new file matter upon opening the file.
• When dealing with individuals whom you only meet for a one-time consultation, at a minimum ensure you enter them into your accounting and case management systems to catch potential conflicts.
• Establish cards or databases for clients and opposing parties. This step:
  • provides a quick contact list, which is useful both during the life of a file and when following-up with clients to see if they have additional work;
  • provides a record to assist in managing your practice; and
  • provides a useful tool for checking conflicts.

Step 4: Separate files into “active files,” “closed files,” and “non-client files.”

• Create an active file list. Your active file list should be updated regularly. File lists may be organized according to your chosen file storage classifications system (ie: alphabetically, numerically), but it is also useful to put the date the file opened on the list. Active file lists:
  • provide a current record of all open files;
  • provide a reminder of the files you have for purposes of workload, billing, and obligations; and
  • provide a framework document for delegating work to staff and following-up on files.
• Consider which automated accounting programs best assist you in producing active file lists to chart unbilled work-in-progress, unbilled disbursements, the amount of money in trust, etc.
• Until your file load gets to a certain size, it might be more economical to keep both active and closed files at your office, but it is still advisable to separate them. At some point you will probably need to consider off-site storage options for closed files.
• Your files relating to the operation of the firm, such as precedents and employee records, should be stored in a separate location and you should create a user-friendly, general index that allows people in your firm to access the documents and add new ones to the system.