Learn how to better manage your firm’s business records by creating a record retention program.
Window to the Law: Manage Records More Efficiently: Transcript
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Welcome to the Window to the Law. I am Finley Maxson, NAR Senior Counsel. This month, we are going to discuss how to create a record retention program for your company.
There are many benefits for creating a successful record retention program.
First, record retention is a good business practice. When a program is properly implemented, everyone will know where information should go and how long it will be kept. It will help the firm eliminate unnecessary storage space, both physical space and disk space on your computer network.
Second, document retention is a valuable risk management tool. There are legal requirements that require the retention of certain documents for a specified periods of time, and so the program will assure compliance with those requirements.
Third, a record retention makes discovery for any litigation easier and hopefully less expensive.
So, how do you create a document retention program? First, understand that a document retention policy pertains to “business records”. A business record, which is something that has operational, legal, fiscal, or historical value to the business. A business record is not limited to just paper files, but it could be something in any format- a data file, voicemail, or video recording.
Step one for creating a policy is assembling your record retention team. Depending on the size of your firm, the number of individuals needed for this will vary- it could be as few as one person. The record retention team will be responsible for implementing the program and continuing to assure compliance on a regular basis. An individual familiar with the firm’s electronic record storage policies should be part of the record retention team.
Step two is identifying the company’s business records. The record retention team members will go through the firm’s records and identify those records that have some operational, legal, fiscal, or historical value.
Step three is to create a record retention policy. Here, you will need to identify and evaluate any existing policies to determine whether the policies continue to serve the needs of the business. Legal requirements will establish the time frames for maintaining certain records. For those records that are not subject to legal requirements, the firm should set policies that best reflect the company’s needs. Record retention is something that each company needs to create on their own, as there is not a one size fits all policy. Records that need to be kept for a specific purpose should be retained for as long as needed, while those which are no longer needed can be destroyed.
Step four is to have your policy reviewed by legal counsel since the policy will include records that implicate many different areas of the law such as employment, tax, and state license laws.
Step five is implementing the policy. When the policy is implemented, paper files and network directories will need to be reviewed and purged of all records that are past the timelines set in the policy. In order to kick off implementation, you may want to have a day for shredding paper files. Once the program is implemented, you should set a schedule for periodic reviews of the policy and also purge records according to the record retention schedule. If there are multiple record managers, you may want to have the managers provide certifications that they have complied with the policy annually.
Remember, it’s not only important to create the record retention policy, but it’s equally important to make sure that is continued to be followed on a regular basis.
So, that is a quick overview on how to create a record retention program. There are resources provided on the video page to help you to create a record retention program for your company.
Thank you for watching this edition of the Window to the Law.