Legal news and trends for Canadian in-house counsel and c-suite executives
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without losing your mind By Heather Capannelli Operating without a document-retention policy in place is a crisis waiting to happen if a litigation hold crosses your desk. But beware of a "save everything" approach, say experts, as you're liable to lose your mind. W ithout a doubt, the most critical part of a document- retention policy is actually having one. Yet, shockingly, it seems few Canadian busi- nesses actually do, leaving corporate counsel scrambling when a litigation hold letter lands on their desk. When you couple the statistics that say more than 99 per cent of all documents created and stored are done so electronically with the success of document-storage facilities like Iron Mountain, you get a unique set of challenges that can quickly amount to a crisis waiting to happen for any in-house counsel. But adopting the "save everything" approach to document management comes with a hefty price tag, as the storage fees and costs of maintaining outdated computer programs and hardware in- crease year after year. So with the competing interests of risk manage- ment and the bottom line, what's counsel to do? Enter the document-retention policy. It's an all-encompassing, umbrella-type policy that deals with everything from e-mail and instant messag- ing to court documents and correspondence. It takes into account the creation date of a particu- lar document, its type and context, and the rel- evant regulatory and legislative requirements. A document retention policy isn't just critical when your business becomes involved in litiga- tion, but according to the experts, it can help in- ternally to monitor and analyze the company's business, and respond to legislative and regula- tory requirements. Depending on the size of your business, draft- ing these policies can be a mammoth undertaking that often requires the help of outside consultants, but what results is a cohesive plan to address the retention and destruction of business documents in both paper and electronic forms. "Clients have a 'save everything' mentality," says Kelly Friedman, partner with Ogilvy Renault LLP, adding that it's not a strategy she recommends. "Usually, they're concerned about the time and costs associated with setting a document-reten- tion policy up, but 'save everything' has a whole host of problems as well." While initially the cost of saving everything might not seem prohibitive, it will quickly be- come so, especially where electronic data is con- cerned. Friedman says that one of several issues that is particularly problematic when saving ev- erything is what to do with legacy data. Anyone with an old PC in their basement understands this concept: it still holds important files, but the new computer lacks the ability to read them, so the old one just stays put on the off chance a document might need to be retrieved, or until someone decides the information is not worth keeping anymore. "If a company says they're going to play it safe and save everything, they're going to have to keep transferring all that information that has not al- ready been culled onto new software," says Fried- man. When the new software becomes obsolete and can no longer accommodate the old data, forensic experts are needed to recreate it. Another problem that's created when a formal document-retention policy isn't in place has to do with "gatekeepers." These are the people who have been with the company for years and are in- timately familiar with what files are stored where, how long they've been there, and what to do if anything should go missing. C ANADIAN Lawyer INHOUSE A UGUST 2008 43