State Bar of Arizona Ethics Opinions

07-02: Maintaining Client Files; Client's Papers and Documents; Electronic Storage
6/2007

In appropriate cases, a lawyer may keep current and closed client files as electronic images in an attempt to maintain a paperless law practice or to more economically store files.

After digitizing paper documents, a lawyer may not, without client consent, destroy original paper documents that belong to or were obtained from the client. After digitizing paper documents, a lawyer may destroy copies of paper documents that were obtained from the client unless the lawyer has reason to know that the client wants the lawyer to retain them. A lawyer has the discretion to decide whether to maintain the balance of the file solely as electronic images and destroy the paper documents.



FACTS

Many lawyers have requested informal ethics advice about whether they may maintain current and certain closed client files as electronic images instead of as paper documents. Some have indicated they want to digitize closed client files (and then destroy the paper file) because of the increasing cost of storing files. Others have indicated that they wish to maintain only electronic images of current client files, both to save storage space and because they believe electronic images are easier to manage and organize. In both circumstances, these lawyers have inquired about their ability to maintain only digitized files and destroy the paper copies, and their associated obligations to their clients. In light of these frequent requests for informal ethics advice, the Committee on the Rules of Professional Conduct has chosen to issue this formal opinion sua sponte.

QUESTIONS PRESENTED

Lawyers have asked for ethics advice on variations on the following questions:

1.  May a lawyer keep current client files only as electronic images, and then destroy the converted paper documents, in an attempt to maintain a paperless law practice?

2.  May a lawyer digitize client files that are closed – but not yet eligible for total destruction – and then destroy the paper documents?

RELEVANT ETHICAL RULES

ER 1.15  Safekeeping Property

(a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in a separate account maintained in the state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation.

. . . .

ER 1.16  Declining or Terminating Representation

. . .

(d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering documents and property to which the client is entitled and refunding any advance payment of a fee that has not been earned. Upon the client’s request, the lawyer shall provide the client with all of the client’s documents, and all documents reflecting work performed for the client. The lawyer may retain documents reflecting work performed for the client to the extent permitted by other law only if retaining them would not prejudice the client’s rights.

RELEVANT ARIZONA ETHICS OPINIONS

Ariz. Ethics Ops. 98-07, 05-04

OTHER ETHICS OPINIONS

Virginia Legal Ethics Op. 1818 (2005)

OPINION

This opinion does not involve the typical issues of file retention, in which a lawyer seeks to destroy and not retain closed client files. Rather, this opinion addresses a lawyer’s desire to maintain active client files or retain closed files solely as electronic images instead of paper documents and then to destroy the paper documents.

Ariz. Ethics Op. 05-04 concluded that it is not unethical to store client information and confidences on computer systems. This opinion takes Op. 05-04 one step further by addressing whether a lawyer may, to use the vernacular, go paperless, keeping the entire file solely in electronic form by digitizing all documents.

At issue is converting file documents to electronic images, such as to Adobe’s well-known portable document format (pdf), not simply storing word-processing documents or email messages or, in fact, saving electronic image files or databases received from the client or third parties.

This practice implicates traditional file-retention issues because although scanning a paper document into a computer and storing the resulting data as a digital image may result in a duplicate image of the paper document, that image exists nonetheless in a medium different than the paper document. To achieve the goal of going paperless, a lawyer would need to destroy the paper document, thus raising the issue of which paper documents the lawyer controls and may opt to destroy.

Ariz. Ethics Op. 98-07, our seminal opinion on file retention following termination of representation, provides the starting point for analyzing this issue. That opinion reached several relevant conclusions:

-  The client generally owns materials in a client’s file the lawyer obtained from the client.

-  At the end of representation, a lawyer is ethically required to use reasonable efforts to return all client property, including materials in a client’s file, to the client.

-  If the lawyer is unable to return the materials to the client, the lawyer then may consider the material abandoned and, after waiting for the five-year holding period dictated by the Uniform Unclaimed Property Act, in some cases may destroy the file.

-  The balance of the file generally belongs to the lawyer, but the former client has an interest in and right to access the file.

Op. 98-07 at 9-10.

Although that opinion dealt with file retention following the termination of representation, the conclusions listed above also apply in advising lawyers whether they may maintain active or closed files solely as digital images and whether they may then destroy the digitized paper files.[1]

Op. 98-07 differentiated between documents provided to the lawyer by the client and the balance of the file. The same differentiation applies in answering the questions posed in this opinion.

1.  Authority to decide whether to store the file solely as a digital image

a.  Documents obtained from the client

A literal reading of Op. 98-07’s statement that “[m]aterials in a client’s file obtained from the client are generally owned by the client” would lead to the conclusion that after digitizing paper documents, a lawyer may not unilaterally decide to destroy any of the documents – whether originals or copies – that were obtained from the client.

In the context of digitizing documents in a client file, however, we see a dichotomy between originals and copies. Clearly, a lawyer may not digitize and then, without the client’s consent, destroy original documents obtained from the client. The digitized version is not the same as the original, and the client has an interest in maintaining the integrity of the original documents.

A photocopy, on the other hand, already is a substitute for the original. Rigidly applying Op. 98-07’s statement to copies of documents obtained from a client would mean, for example, that in a document-laden case, the lawyer would have to obtain the client’s consent to discard – after digitizing – every photocopy or facsimile the client transmitted to the lawyer.

A less rigid approach is more realistic in this situation. The lawyer is not, after all, destroying the information. Instead, the lawyer is keeping the image of the document – already imaged by the photocopy – in a different format. We therefore conclude that after digitizing a photocopy or facsimile of a document, the lawyer may destroy the hard copy unless the lawyer has reason to know that the client does not or would not want the lawyer to discard it. For example, if a photocopy is the only available version of an original, digitizing and then destroying the photocopy may not be prudent. On the other hand, if a client has supplied the lawyer with a photocopy of a document and has kept the original, either on his or her own initiative or at the lawyer’s direction, the lawyer may have no reason to know that the client expects the lawyer to keep the photocopy as a paper document.

The lawyer of course may avoid any questions by obtaining the client’s consent at the beginning of representation, during representation when the client provides documents to the lawyer, or at a later time, such as at the conclusion of representation. For example, if the client provides the lawyer with photocopies of documents, the lawyer could clarify with the client that the documents are for the lawyer’s use and may be destroyed after the lawyer digitizes them.

Alternatively, the lawyer may avoid any questions by, after digitizing the documents, returning them to the client.

One specific category of records – letters from clients – does not fall neatly within the dichotomy described above. Technically, under Op. 98-07 and our analysis in this opinion, a letter from a client to a lawyer would be an original document obtained from a client. On the other hand, that letter from a client may convey photocopies of documents for the lawyer’s own use. It would be illogical to advise that the lawyer could digitize and then destroy those photocopies but not the cover letter from the client conveying them. We conclude, therefore, that letters from clients do not fall into the category of “[m]aterials in a client’s file obtained from the client” but instead are part of the “balance of the file” over which the lawyer has unilateral authority and discretion.

b.  Balance of the file

In general, we see nothing per se unethical with a lawyer choosing to maintain the balance of a file, whether active or closed, solely as electronic images. Neither ER 1.15 nor ER 1.16 dictates that a lawyer must keep a client’s legal file in paper form. See Virginia Legal Ethics Op. 1818 (2005). We agree with the Virginia opinion that

[i]n determining whether an attorney is meeting his ethical responsibilities for a particular client, it matters not generally what form the documents in the file take, but instead whether all the documents necessary for the representation are present in the file.

In addition, Op. 98-07 concluded that although the client owns file materials the lawyer has obtained from the client, “[t]he balance of the file generally belongs to the lawyer.” Id. at 10. This has been a somewhat confusing statement to apply in light of a lawyer’s obligations under ER 1.16 and even within the context of Op. 98-07 itself.[2]  Nonetheless, the important concept for this opinion is the scope of the lawyer’s authority over the file other than documents obtained from the client. Whatever else “generally belongs to the lawyer” may mean, it at the very least means that the lawyer has the authority to decide whether to keep “[t]he balance of the file” as paper or as digital images.

2.  Discretion to decide whether to store the file solely as a digital image

As in any case, a lawyer contemplating maintaining a client’s file solely in electronic form will need to determine if it is in the client’s best interest to do so. Many cases may involve legally operative documents that should be maintained in their original form. On the other hand, a photocopy of a document may be just as valuable for evidentiary purposes as the original, and a digital image of the photocopy may degrade that value.

In deciding whether to maintain client files solely as electronic images, a lawyer also must keep in mind the lawyer’s obligation to provide the client access to the file. At termination of representation, the lawyer is obligated to “take steps to the extent reasonably practicable to protect a client’s interests, such as… surrendering documents and property to which the client is entitled....” ER 1.16(d). In addition, “[u]pon the client’s request, the lawyer shall provide the client with all of the client’s documents, and all documents reflecting work performed for the client.” Id. We interpret this as requiring the lawyer to provide meaningful access. A lawyer who has chosen to store his or her client files digitally cannot simply hand a disk or other storage medium to a client without confirming that the client is able to read the digitized images. If the client does not have either the technological knowledge or access to a computer on which to display the electronic images, or if the client has hired substitute counsel who is in the same position as the client, the original lawyer may need to provide paper copies of the documents. If the lawyer has opted to store the file solely as digital images for his or her own convenience, the lawyer will need to bear the cost of providing those paper copies, absent other agreed-upon arrangements.[3]

Although the lawyer must provide the client with meaningful access to the file, we do not believe the lawyer must obtain the client’s consent to maintain solely as electronic images documents other than those provided by the client and with the considerations described above.[4]  Nonetheless, the lawyer must maintain the electronic images in such a manner as will permit them to be readily and accurately convertible into paper format within a reasonable period of time.

In addition, if a lawyer wishes to store client files solely as electronic images and not keep paper copies, the lawyer must take reasonable steps to ensure that the digitized file is complete. Just as photocopiers and printers may skip pages, so may scanners, and if the lawyer has destroyed the paper document, then the file will be incomplete. Naturally, when converting a document to a digital image, the lawyer also must take reasonable precautions to avoid damaging the documents. With rare or difficult-to-replace documents, it should not be attempted.

Finally, a lawyer who wishes to maintain the allowable portions of a client file solely as electronic images must consider whether the format lends itself to long-term storage. Until the time a file may legitimately be destroyed, a lawyer who maintains that file solely as digitized images will need to use technology that permits the file to be readily and accurately retrievable. In addition, the lawyer should be familiar with or take steps to insure that the digital-storage medium is properly stored to maintain its shelf life.

CONCLUSION

In appropriate cases and with appropriate safeguards, a lawyer ethically may keep active and closed client files as electronic images in an attempt to maintain a paperless law practice, with the understanding that he or she may need to provide paper versions to the client and any subsequent attorney. However, until the file legitimately may be destroyed, as detailed by Op. 98-07, a lawyer may not, without client consent, destroy original paper documents that belong to or were obtained from the client. Similarly, a lawyer may not, without client consent, convert to digital images and then destroy photocopies or facsimiles of documents obtained from the client if the lawyer has reason to know the client expects the lawyer to keep the paper documents.

Formal opinions of the Committee on the Rules of Professional Conduct are advisory in nature only and are not binding in any disciplinary or other legal proceedings. © State Bar of Arizona 2007

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[1] This opinion only addresses a lawyer’s ethical duties to maintain client files, not whether digitized documents would be valid under particular statutes or administrative or court rules. In addition, as we noted in Op. 98-07, file retention and destruction policy often is a subject of court rule or statute. We do not offer an opinion as to any legal requirements for document retention or destruction or the legal ownership of all or any portions of client files.

[2] The relevant comments to ER 1.16 state:

[9] Ordinarily, the documents to which the client is entitled, at the close of the representation, include (without limitation) pleadings, legal documents, evidence, discovery, legal research, work product, transcripts, correspondence, drafts, and notes, but not internal practice management memoranda. A lawyer shall not charge a client for the cost of copying any documents unless the client already has received one copy of them.

. . .

[11] Lawyers may fulfill their ethical obligations with respect to client files by returning the file to the client. File retention policies should be disclosed to the client, preferably in writing and at the inception of the relationship.

[Emphasis added.] While stating that the file generally “belongs to” the lawyer, except for documents obtained from the client, Op. 98-07 nonetheless acknowledged that the lawyer “may fulfill her ethical obligations by tendering the entire file to the client…at termination of representation.” Op. 98-07 at 10. It is inconsistent to advise that the file “belongs to” the lawyer yet also warn that the lawyer may need to tender or return it to the client at the conclusion of the representation.

[3] This does not mean, however, that the lawyer must bear the cost of converting the images to a client’s, or a successor lawyer’s, preferred format. The lawyer and client and/or successor counsel could negotiate this issue.

[4] Virginia Op. 1818 advised that the lawyer must obtain client consent before destroying the paper documents. That opinion does not distinguish between documents provided by the client and other documents – the distinction we made in Op. 98-07 – even though the opinion noted that the lawyer is in the “better position to know in what circumstances there may be legal significance in keeping the paper versus the electronic version of file contents….” With the caveat that a lawyer must determine if it is in the client’s best interest to keep only a digitized version of documents, we do not believe that the lawyer must obtain client consent before doing so, provided, of course, that the lawyer ensures that the client has meaningful access to the file.