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Document Retention - How Long is Too Long?
darthtuttle asks: "With
the recent news of document destruction at Enron and the emails that have
been discovered in high profile cases such as MS -vs- DOJ document
retention seems to be a hot item right now. What document retention policies
do people have at their companies, and what steps do companies take to
make sure that documents are destroyed according to the policy when their
time is up so they don't come back to haunt the company later? Note: the
purpose of a document retention policy is not to keep documents, but to
make sure they get destroyed according to policy before someone outside
the company decides to use it against you. The big issues seems to be
backups and documents stored on peoples desktop/laptops. You don't
want those email server backup tapes from 2 years ago to be found, and
you don't want to find out that the CFO was saving -every- email they
ever got on their laptop."
Documents should be retained for the amount of time it takes to walk from your desk to the paper shredder.
Bill Clinton: Pimp we can believe in. - The Shirt!!!
Encrypting doesn't necessarily help. Sure, it prevents the court from reading your documents, but it doesn't prevent the court from putting your ass in jail for contempt of court after they subpoena your key/passphrase/whatever from you.
/dev/urandom souvenir collection).
And if you destroy your key as the feds are coming through the door, that's just like shredding documents -- They'll put you in jail for destroying evidence.
(And yes, well encrypted data is indistinguishable from random data, but it's not going to be too hard for a state's attorney to argue that the huge pile of random data on your HDs is encrypted data, not your
Seriously -- if you don't check with the legal types on what the information is and what it relates to, you could be legally liable for obstruction of justice/personal harm. The lecture I got on this turned my hair curly. Make the lawyers earn their money and break down what you can and can't destory, and when. If you've got any kind of assets to protect, this is a must.
-- q
A lot of people have posted that as long as you are legit then you shouldn't have to worry but that is just naive. The truth is that a well trained lawyer can take any document and manipulate the information to fit their needs. Add to that information taken out of context can be given uneducated scrutiny by the press and the general public resulting in a disaster.
To me, the best policy is whatever your legal requirements are and that's it. Destroy everything else.
Not at all. The problem is most obvious with email, so I'll use that as an example.
Let's say that your company has done nothing wrong, but the SEC thinks that you might have been leaking information to financial institutions, in order to affect your stock price.
That's a pretty serious charge, but if you're innocent you have nothing to worry about, right? Well, it turns out that you have an employee that sent a seemingly innocent comment to his friend at such a company, but now, in light of the charges, it could be seen as an indication that such activity did exist and widen the investigation. This costs you in terms of legal expenses, time, credibility, etc.
Having old documents taken out of context can be truly damning, and it's just not worth the expense. Much better to destroy what could be used against you later.
This may be a good policy when you have something to hide. In the IT world, in my experience (and the experience of most of my peers it seems), old e-mail has helped way more often than it hurts us. If you use e-mail to document conversations, meetings, etc., a lot of disputes get resolved pretty quickly when you pull out an old e-mail and say, "See, here's what you said." or "See, here's what we said we would do."
This doesn't happen if we have to print "important" e-mails. Why? Two reasons. First, you usually don't know a year or two in advance which e-mails are going to be important some day. We may generate a thousand messages plus over the course of a project. Most of them are routine, or are only of passing interest. Every once in a while, however, there will be a design decision (or more likely a design compromise) that one party has conveniently forgotten.
Conversely, if someone can show us that we did, in fact, agree to do something, then we will commit to doing it. Our memories are cloudy too, and we do believe in delivering what we said we would.
The second reason paper filing doesn't work for most of us is that it's extra work. Want to file an e-mail - drag it to a folder. Done. Need to file a paper document - remember to print it, interrupt whatever you're doing to leave your desk, find the right folder (if there's room in the cabinet), file it. If you're on the road, remember to go back later, once you're back in the office, and follow the steps above. This works OK if you're an executive with a secretary dedicated to such tasks. Around here, at least, that perk has become too expensive for all except the most senior management. And, even though paper filing doesn't take much effort for a single document, it is a lot of work for hundreds of e-mails, it requires filing space that is in short supply, and it requires a degree of discipline that most people don't seem to have. Finally, even if you have a good paper filing system, it's much easier to search electronic files quickly.
This is exactly why electronic files are so dangerous in litigation - if you can search them quickly, so can your adversary. By prohibiting them, however, you reduce productivity across the entire company and increase costs. I'm not convinced that the legal eagles balanced the immediate cost benefits against the possible future risk. They only consider the dark side.
On a related note, I know I just read an article (here?) about how electronic documents have a life of their own thanks to widespread forwarding. Your retention policies may be almost meaningless if your correspondants keep everything.
If you aren't legally required to maintain records of every email/document/etc, then why SHOULD you? Do you recall the Netscape fiasco where Microsoft subpoenad the history of every email to an employee bitch newsgroup? In that case Netscape had no legal duty to maintain backups and records of every posting, but because they made the mistake of not deleting them frequently suddenly they were required to provide them and were then barred from destroying them: It's an odd circumstance when you don't legally have to archive information, but if someone asks for it then suddenly it's legally protected and you have to defend and explain the context of every message, every word, etc, and of course everyone says something now and then that can be taken out of context (or alternately that they said in the heat of passion but backed down from).
Destroying old information quite simply removes the liability that it potentially represents, even if there is absolutely nothing indicting in it. It can also protect freedoms: Websites aren't legally required to keep IP logs, but if they DO then those IP logs can be subpoenad.
Well, it turns out that you have an employee that sent a seemingly innocent comment to his friend at such a company ...
... "
You don't even need that much of a "real" issue for this to become an expensive litigation. I once worked for a law firm. (IANAL, no sensitive info coming out here) We represented one of the parties in a patent infringement suit. Just documenting and sorting the contents of a couple of dozen employees' hard drives -- in order to determine what needed to be provided in the discovery phase -- took a team of three people over a week. If you end up in litigation, someone has to go through everything to see what is covered under "all documents or materials relating to
Nope, no sig
"I can't imagine the tech demands of constant archiving of everything. I'd need to give half of my budget to EMC just to try to stay ahead."
This is partly because you don't use standards compliant systems. I have all my non-junk e-mail going back to 1994 saved, from a variety of HP, Solaris, Irix and Linux machines across maybe nine e-mails. It's all in instantly recognizable mbox format. If you are going to go with Netware, Win2k, etc. Then of course you are going to have these problems! The companies that make those systems make their profits selling new versions of software.
Maybe it would save your company money to choose a system which does not build in 2 year obsolescence into its business plan.
Retain nothing, and enact all corporate strategy completely at random, in total ignorance of past history.
It's what you're doing anyway, right?
there. We were all on Exchange Servers so email retention went like this. Anything in the Inbox was deleted in 30 days. Any messages saved in other folders was deleted in one year regardless. You did have the option of saving off to your hard drive but PST files were a no-no. In addition, no external storage devices could be used without a senior VPs approval and an act of Congress. As far as when things started hitting the fan, we were inundated with emails to send any conversations, voice mails, correspondence, etc to the legal counsel's office. Of course, I'm sure that was taken care of in a very professional and ethical manner. So these days I apply for jobs and read slashdot and watch the Enron blaze grow larger and hotter. Al Sharpton was in yesterday, Jesse Jackson will be speaking tomorrow! Oh boy, the circus has come to Houston and it looks like its going to stay awhile.
HT
If you get an email (or hardcopy) message from your boss saying, "screw the client," you'd damn well better keep it. You know what happens if you don't? That's right, with no documentation pointing upstream, you are now the sacrificial goat. Don't think for an instant that a boss willing to screw a client would treat you any differently.
Better still, if the action your boss proposes is illegal, not only should you keep several copies at home and at work, but you may wish to blow the whistle yourself, depending on your paricular moral compass.
The last thing you should do is destroy the message. When the big, bad boomerang-o-karma comes back your way, you'll have no recourse but to take it squarely in the nads.
I take drugs seriously.
This firm had nothing to hide, but was still burned badly by a poorly thought out document retention policy. Needless to say, they have since changed policies.
Please note that my friend had just taken over the IT department when this happened. He was not the individual suing.
You can only drink 30 or 40 glasses of beer a day, no matter how rich you are.
-- Colonel Adolphus Busch
For a large company, a document retention and destruction policy is a necessity, specifically for legal reasons, but not for the reasons you're assuming. Every large company develops huge masses of information, and most of them back up that data to protect against short term loss. However, most companies don't want to keep it forever, so they destroy the old stuff to reduce storage needs, cut down on administrative costs associated with maintaining the records and protect against industrial espionage. The problem lies when the company comes under examination for a lawsuit. If there's a well described and religiously followed document retention policy in place, the court has no reasonable expectation that the company will still have documents that the policy marked for destruction. If on the other hand there is no real policy (or it's badly enforced) this opens up an avenue for liability wherein the corporate controllers say "we don't have documents X or Y because they were destroyed" and the judge then assumes they did it to hide something (and punishes accordingly) or assumes they're lying (and punishes accordingly). Also, when the prosecution or plaintiff asks for certain documents, the policy can limit the scope of the request so that your IT team isn't spending untold hours digging up archived stuff to turn over in satisfaction of a subpoena.
You should be careful not to fall into the logical trap that document destruction is only useful if you have something to hide. In this very litigious society, it's rarely that simple.
Virg
Retention of Firm Documents
1. Policy. All documents (including those kept in an electronic medium) created or received by the Firm that are necessary or appropriate to record or support the Firm's professional work product or administrative functions shall be retained for a Current Period plus six years (the "Retention Period"), subject only to specifically stated exceptions set forth below. Thereafter, they shall not be retained. Business Unit Leaders and Office Managing Partners are responsible for insuring that their units comply with this Policy.
2. Current Period. Current Period means, in most cases, the calendar year during which the document was created, revised or received. In some cases, Current Period means the effective life of the document. Examples of documents falling into the latter category are office leases, personnel files, contracts to which the Firm is a party, engagement letters relating to continuing client engagements, tax planning files and the "permanent file" of a continuing client.
As a general rule, choice of the appropriate Current Period and corresponding date of record retention termination should be made by the person who created or received the document in question, and not by the Records Center. Questions arising in connection with the choice of an appropriate Current Period should be directed to the appropriate Unit, Line of Business or Office Managing Partner, or the Office of General Counsel.
Note that in some situations, the Retention Period will have to be extended on a year-to-year basis, as when the IRS has not closed a particular tax year of a client within the Retention Period (the tax workpapers should be retained until it has).
3. Examples of Current Period Plus Six Years:
Working papers and correspondence files relating to the Firm's report, dated March 13, 1997, on the financial statements of Universal Widgets as of December 31, 1996: Terminate retention after December 31, 2003.
Lease dated November 1, 1993 covering a lease term of February 1, 1994 through January 31, 1995: Terminate retention after December 31, 2001.
Letter dated August 19, 1996: Terminate retention after December 31, 2002.
Permanent files deemed superseded on September 30, 1998: Terminate retention after December 31, 2004.
Tax, litigation, and bankruptcy planning files created in May 1998 covering the three-year period of 1998, 1999 and 2000: Terminate retention after December 31, 2006.
4. Record Type/Retention Period:
ABAS Files
Billing File - 6 years
Correspondence File - 6 years
Financial Statements - 15 years from record year
Permanent/Carry-Forward - "No date" while active, Current + 6 years from the "superseded date."
Reports - 15 years from the "period ending" specified in report
Superseded - Current + 6 years from the "superseded date"
Workpapers - Current + 6 years
TLS Files
Billing File - 6 years
Correspondence File - 6 years
Permanent/Carry Forward - "No date" while active, Current + 6 years from the "superseded date."
Planning - "No date" while active. Current + 6 years from the "superseded date."
Superseded - Current + 6 years from the "superseded date"
Tax Return - 15 years
TLS IAS - 15 years (Tax Return)
Workpapers - 6 years
The following exceptions to the general policy have their appropriate retention periods set forth in parentheses. For permanent retention, consider microfilming or other less bulky storage systems:
(a) Documents pertaining to Firm governance and regulatory matters (permanent).
(b) Agreements and related documents pertaining to mergers or acquisitions by the Firm, as designated by OGC (permanent).
(c) Minutes of meetings of the Firm's Board of Partners and Principals and the Board's Committees, as well as other Firm Committees designated by the Firm's Senior Partner (permanent).
(d) Certain legal or historical files designated by the General Counsel (discretion of OGC).
(e) Firm Policy Releases (until superseded). The partner or director leading the group issuing the policy should ensure that one full historical set of the Releases or Statements issued by it is retained permanently.
(f) Documents (i) relating to threatened or pending litigation involving the Firm or its personnel or (ii) subject to a subpoena (the longer of the termination of the litigation/subpoena matter or the Retention Period - consultation with OGC required before any disposition).
(g) Financial records, including tax returns, of the Firm (discretion of the Chief Financial Officer).
5. Documents To Be Retained for a Period SHORTER than the Retention Period:
(a) Practice Quality review documents, including reports, correspondence, questionnaires, and supporting workpapers that identify or relate to findings or evaluations of specified engagements, offices or individuals (12 months from date of creation, or less when it is determined by the Director, Audit Quality--or his or her counterparts in other Lines of Business--that they have served their intended purpose).
(b) Personnel records of former employees (Current Period plus three years).
(c) Internal administrative documents, such as office financial information (discretion of appropriate Unit, Line of Business or Office Managing Partner).
(d) Engagements terminated before completion, such as audit engagements where no report is issued (Current Period plus three years; all uncompleted engagements should be clearly marked as such).
6. Other Exceptions:
(a) Any person who creates or receives a document or class of documents that he or she believes should be the subject of an exception should refer the matter to OGC.
(b) OGC will notify the appropriate Records Center of any files that must be retained beyond their assigned destruction date due to pending litigation or other reasons. At that time the files will be retained indefinitely, and destruction will require specific approval of OGC.
(c) In reference to E-mails and general correspondence of any type, if the communication is necessary to support PwC work, it should be included in the engagement files, either electronically or in paper form. If it is not necessary to support PwC work, it should not be retained. Desk file or rough file material should be discarded at the end of the engagement.
7. Organization and Timing of Destruction:
Persons responsible for maintenance of Firm files should conduct a review of all files during each December to identify those files that should be destroyed promptly after December 31 of that year. Thereafter, during January of the following year, such documents should be destroyed only upon formal authorization from the designated partner.
Your solution doesn't make sense for any but the smallest businesses, due mainly to infrastructure but also for legal considerations. For a large company, storing eternal backups of every piece of data generated represents a gargantuan storage, retrieval and maintenance operation that in the large majority of cases serves no useful purpose. For example, when I worked for a large bank, the IT department spent hundreds of thousands of dollars per year to store the backups and logs that we wanted to keep. It would have been an appalling waste of money and personnel to double that just to keep backups of information that we never needed anyway. Also, such records can be a huge liability to a company in the event of a lawsuit, even assuming that there's no wrongdoing. Simply sifting through all of the records for documentation relevant to a subpoena can consume massive resources, just to prove that none of the email you've stored for the last five years contains anything incriminating. A document retention (and destruction) policy can force a judge to limit the scope of a subpoena, thereby reducing the workload in satisfying the subpoena.
In the corporate world, lawsuits complicate such issues immensely. Don't make the mistake of assuming that the only reason to cover your butt is because you've done something wrong.
Virg
So, there are two other things to consider:
1. Keeping old records around can be expensive -- not only do you have to keep the media it's on, but you have to make sure you have the ability to read that media, and once you do, that you have the appropriate software and hardware to understand the message itself. Destroying them after you don't really need them any more saves a lot of expense. And, that doesn't even begin to talk about deteriorating backup media.
2. Similarly, part of the problem is in making sure that you have a *complete* record -- you don't want to have a partial record, where the mail to the CFO says "Hey! Let's screw the employees out of their pension," but not the corresponding mail from the CFO that says "That's illegal and immoral. You're fired." So, the idea is not so much to cover up past wrongs, as it is to make sure that you have a true archive.
3. The other thing is that there are some things that are embarassing, but not illegal -- the fact that the CEO didn't retire for health reasons, but was forced out because he got his secretary pregnant, for example.
I don't know about everybody else, but I use my e-mail as a record of what *I've* done, and 9 months (as somebody mentioned earlier) is not far enough back -- heck, every year we have performance reviews, and how am I going to say "This is what I did 11 months ago" if I don't have any record of what I did 11 months ago.