Posted on Jan 06, 2016 by C. Pierce Campbell
For many small businesses, deciding what documents to keep and for how long is a function of storage capacity. As servers and filing rooms reach capacity, businesses look for documents to discard.
This is not the way to manage your documents.
Develop a plan for document retention and stick with it. Too often, small businesses that are stretched because of a lack of resources have difficulty honoring a well-intentioned document retention policy in actual practice. Details of a policy are often less important than sticking with it.
Lawyers view a document retention policy in terms of its effect on potential litigation as well as various government requirements to hold on to certain documents for tax or compliance purposes with agencies, such as OSHA and the EPA. But perhaps the most important reason to have a policy is because a business runs more efficiently when it saves the right documents and can access them quickly.
And if a business does find itself in litigation, it may be important to have a document retention policy. Your decision to destroy a document usually can be defended as long as you did so as part of a policy you followed consistently. In most cases, courts will look at the reasonableness of a plan rather than black letter requirements.
If you don’t have a document retention policy, or have one and haven’t reviewed it recently, ask these questions:
Are you holding on to paper? Don’t hesitate to convert physical copies of records to a digital format. Electronic storage is cheaper and safer, and it’s rare for a court or regulatory agency these days to require the original hard copy of a document.
Are you drowning in email? The most problematic area of record retention is email. A typical desk-bound employee may generate a hundred or so emails a day and mailboxes are a major cause of hard drive overload. Some organizations impose the discipline of mailbox size limits, but that’s a blunt instrument that only takes into account the age of messages. Encourage employees to purge nonessential messages on a regular basis and perhaps you have to concede that investing in archival storage is a cost of doing business in today’s digital-centric world.
Finally, avoid off-the-shelf record retention plans that don’t consider all the needs of your business. Take the time to study your business and compose a plan that addresses your needs and works within your resources.
C. Pierce Campbell is a shareholder at Turner Padget in Florence, S.C., where he serves as chair of the firm's Business Litigation Practice Group. His practice focuses on business and commercial litigation, as well as probate litigation, and his clients range from small partnerships to large corporations. He may be reached at (843) 656-4429 or by email at firstname.lastname@example.org.