Does your company still have "floppy" disks in storage? Is your company storing invoices from the 80′s? If so, it is time for a little spring cleaning. The cost of cleaning your electronic house is actually quite small compared with the cost of reading, searching, sorting and producing all of these "dead" files in event your company is ever sued. There is a new sheriff in town. If you have them, you are either going to have to produce them, or prove to the court exactly what they contain, a rather costly proposition either way. They good news is that if you get rid of all of your old, unreadable, damaged and/or unnecessary files before you even anticipate a lawsuit, you immediately eliminate the tens of thousands of dollars it would otherwise have taken to sort and produce them. Now there are those companies that wait until AFTER they get sued to start destroying documents. The one advantage of that strategy is that if often comes with a fully-paid, extended vacation in one of our federal government’s lovely penitentiaries.
Just last December, Federal courts adopted some new rules. Under these new rules, when you get sued, you have to turn over (ESI) along with hard copy documents. If you do not have an effective document retention policy (DRP) in place, this could mean producing millions of electronic documents instead of hundreds. How long is it going to take your company to find those million documents, sort them, weed out the confidential information and convert them to a standard format the other party can read? Who is going to run your company while all of your employees are busy finding, reading and sorting electronic documents?
Can you just get rid of anything you want? Well, for publicly traded companies and other companies subject to the Sarbanes-Oxley Act premature destruction of ESI can result in fines and even prison sentences for the individuals involved. So where do you draw the line? The key is to work with your attorney, your information technology department and your document management team to develop and enforce a DRP customized for your company.
Dragging your feet will only suffice until you get sued. At that point, you will still have to put together a DRP; it will just be with ten lawyers instead of one. Now I realize you are all saying "Hey, what’s wrong with ten lawyers?" Well, nothing. In fact, my buddies and I were looking for a company to get sued without a DRP so we could buy new hogs to drive Sturgis.
You, however, might have a different idea on how to spend your money. Plus, if you implement a DRP BEFORE you get sued your ESI will more likely help you win the case than lose it. Judges and juries are becoming less and less sympathetic with unorganized companies unaware they had hundreds of electronic smoking guns stored on the hard drive of some employee that left the company in the 90′s.
How much more is it going to cost to have a lawyer sift through all those extra documents? How much more is it going to cost to argue about those documents in court? How many more documents are you going to create before you implement a DRP? Why not store them correctly in the first place?
Implementing a DRP is a big step, requiring committed personnel and some additional resources. The payoff however, extends far beyond the courtroom. Weeding out the chaff and making the remainder more readily accessible streamlines every department in your organization. Once the DRP is in place and working, it actually takes fewer resources to maintain your trimmed down ESI than to randomly store every piece of spam on your local hard drive.
You have two choices. You can either implement a DRP now, with your own people, on your own timeline or, you can have ten lawyers do it in the first two months after you get sued. There is probably a ten fold price difference between the two options and the later option may still lose you the lawsuit. But really, is there any substitute for that warm feeling you get knowing your original copy of Windows NT is still safely tucked away somewhere on a 5.25 inch floppy in the bottom drawer of that beige file cabinet in the basement?