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COMPLIANCE ADVISORY. November 2003 SO YOU WANT A DOCUMENT RETENTION PLAN? Getting Started.

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SO YOU WANT A DOCUMENT RETENTION PLAN?

This is the first in a series of advisories that discuss various issues related to document management programs.

You come into the office one morning and receive a message from the CEO advising you that he believes that your company needs to have a formal document retention program and he wants you to develop and implement it as soon as possible. What do you do?

One of the first things that you should do is take a deep breath and think long and hard about what you are planning to embark upon. Your CEO is absolutely right. Practically everyone has seen front page headlines featuring companies that fail to appropriately manage their documents. Additionally, the explosion of e-documents has completely changed the way companies need to address their document issues. Virtually every company needs a document management program (which is a more accurate description of what you are trying to accomplish than referring to it merely as a document retention program), because it is an impor-tant prophylactic and management tool. Nevertheless, it is generally far better for a company to have no document management program at all than to try to implement a poorly designed program, or create an elaborate plan that ends up sitting on the shelf. If you are going to do it, and you probably should, make sure you do it right.

This Compliance Advisory provides basic guidance on some of the foun-dation issues that you face as you move forward. Future advisories will discuss other issues related to document management programs. Alston & Bird has a great deal of experience in helping companies develop document management programs and would be happy to discuss these issues further with you.

Getting Started

The key elements that separate successful document management programs from unsuccessful ones are planning and high-level corporate support. The more thought that goes into the plan on the front end, the less likely that there will be problems on the back end. Because the planning and implementation will require significant corporate resources,

COMPLIANCE

ADVISORY

November 2003

Virtually every company needs a document management program

(which is a more accurate description of what you are trying

to accomplish than referring to it merely as a document retention program), because it is

an important prophylactic and management tool.

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it is important that upper management be committed to this project before moving forward.

At the outset there are three fundamental questions you should consider: 1) What are your goals? 2) Who needs to be involved? and 3) Where do you start? The answers to these critical questions will shape how you should move forward. We explore each of these questions below.

What Are Your Goals?

There are several reasons for having a document management program. • Compliance: Every company should make sure that it is saving

those documents that it needs, either to comply with legal require-ments or for business reasons.

Economy: In these days of increasing paperwork, it is both unwieldy and unprofitable to save everything. Companies need rational ways to discard unnecessary paper or information that is no longer needed.

Efficiency: A document management program helps the company better manage its documents – to find documents that it uses on a regular basis and to securely store documents that it doesn’t cur-rently need, but should retain for possible future use.

Every document management program attempts to address each of these issues to some degree. However, the needs of each organization vary. For example, newer companies, or companies that have less paper, are generally less worried about storing stale information. They are more concerned with ensuring that important documents are not inadvertently destroyed. On the other hand, larger companies that generate millions of pieces of paper and electronic messages on a regular basis need ways to separate the wheat from the chaff so that they keep what they need, but are not overwhelmed by unnecessary paper or data. Companies that are highly centralized with only a few locations are less concerned with managing their documents because management generally knows where the documents should reside. In contrast, organizations that are more spread out, either geographically or structurally, are often more concerned about their ability to locate pertinent documents quickly and should develop a program to meet those needs. However, all companies, old and new, large and small, have to consider the full breadth of compliance requirements that apply to their business. Thus, from the outset you should assess your primary needs and set your goals accordingly. That analysis will help you decide what type of document management program you want.

. . . there are three fundamental questions you should consider: 1) What

are your goals? 2) Who needs to be involved? and 3) Where do you start?

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Who Needs To Be Involved?

Designing a document management program is not a sexy task. So it is little surprise that it usually gets pushed to the bottom of the “to do” list unless something alarming happens to alert management to the dangers of not having a document management program. Unfortunately, by then it may be too late. To complete the task successfully, an organization must commit resources – both manpower and money – to the project. It requires people with clout and connections in the company to see that it is done correctly. Senior management must actively support the project.

Various groups need to be included in the process. In-house counsel should be heavily involved since one of the primary goals of a document manage-ment program is to protect the company by ensuring compliance with legal requirements. Many companies also find it helpful to employ outside counsel to provide expertise or manpower that supplements the knowledge of the in-house counsel’s office. Outside counsel can also provide an objective assessment of the company’s needs and exposure based on a broad range of experience with the client.

Other groups should also be included. For example, many document retention issues focus on the human resources department and finance department. Both of these groups should be familiar with the need for saving documents to comply with federal and state law. They should be brought into the picture and consulted to ensure that the overall document management program does not disrupt their operations. If the company has a compliance or internal audit department those groups should be included – they are often very helpful in assisting in planning any document compliance program. According to the nature of the company, other critical business units may also have important roles.

Perhaps, though, the most important group that needs to be brought in on the ground floor is the company’s information management department. Many of the most thorny issues center on how to manage the business’s e-files. Because so much of today’s information is created, shared and stored electronically, it is vital that the company’s computer group be part of the team so that whatever plan is designed is compatible with the company’s technology and to assess whether and what type of software is necessary to assist in this project.

Where Do You Start?

Once you have identified your goals and selected your team for developing the document management program, the next logical question is “where is the best place to start?” The answers to the first two questions often drive much of this answer. There are some broad-brush issues, however, that

Because so much of today’s information is created, shared and stored electronically, it is vital that the company’s computer group be part of the team so that whatever plan

is designed is compatible with the company’s technology and to assess whether and what type of software is

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For example, do you want to create a document management program to cover the entire company, or are you better served to start small and use a piecemeal approach? There is no “one way” to do a document management program. Throughout the process you should focus on what works best for your company rather than mimicking another company’s plan or implement-ing an off-the-shelf generic policy from the Internet. It is not unusual for companies to devote a fair amount of time to this planning process – it is time well spent.

Companies have approached this issue in many ways. Smaller companies often find it easier to tackle everything at once. Larger companies with numerous branch offices or international operations might take care of a particular location or division first, rather than doing everything at the same time. Much of the decision will be driven by how microscopic you want to get when analyzing the documents in your company. The more you focus on specific company documents, rather than broad categories of types of documents, the better you are able to understand what documents you have and where they are located, and the better you are able to tailor the document management plan to your company. But the more focused you get, the more complicated the plan becomes and the more manpower and resources will be needed to gather the information and implement your program. Conversely, a more macroscopic plan is easier to implement, but sacrifices some control over individual company records.

Stay focused on the goals you have identified for your document manage-ment program. That will help you to decide how detailed you want the plan to be. Then you can decide where you want to start so that you don’t bite off more than you can chew.

Staying the Course

Once you have answered these three questions, you have taken the first important steps to responding to the CEO’s directive. The next step will be to create your document management protocol. We will discuss that stage in future Compliance Advisories. In the interim, if you have any questions, or if we may be of any service, please do not hesitate to contact your client-attorney at Alston & Bird, or any of the client-attorneys listed on page five, and we will be happy to assist and advise in any way that will be of benefit to you.

There is no “one way” to do a document management program. Throughout the process you should

focus on what works best for your company rather than mimicking

another company’s plan or implementing an off-the-shelf generic

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COMPLIANCE TEAM

This Compliance Advisory is published by Alston & Bird to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered advertising under the applicable court rules.

Mitch Mitchelson 404-881-7661 mmitchelson@alston.com Donna Bergeson 404-881-7278 dbergeson@alston.com Debra Bernstein 404-881-4476 dbernstein@alston.com Ralph Boyd 202-756-3473 rboyd@alston.com Mark Calloway 704-444-1089 mcalloway@alston.com Tom Crocker 202-756-3318 tcrocker@alston.com Lee DeHihns 404-881-7151 ldehihns@alston.com Robert Driscoll 202-756-3470 rdriscoll@alston.com Kevin Grady 404-881-7164 kgrady@alston.com Courtney Guyton 404-881-7938 cguyton@alston.com Catherine Hess 704-444-1084 chess@alston.com Sam Hill 404-881-7948 slhill@alston.com Hill Jeffries 404-881-7823 hjeffries@alston.com Alan Kanzer 212-210-9480 akanzer@alston.com Shannon Klinger 404-881-7929 sklinger@alston.com George Koenig 404-881-7870 gkoenig@alston.com John Latham 404-881-7915 jlatham@alston.com Tiffany Lucas 404-881-7166 tlucas@alston.com Charlie Morgan 404-881-7187 cmorgan@alston.com Kennard Neal 404-881-7194 kneal@alston.com Nils Okeson 404-881-7889 nokeson@alston.com Kim Reddy 404-881-7254 kreddy@alston.com Jack Schroder 404-881-7685 jschroder@alston.com Paul Silverman 212-210-9562 phsilverman@alston.com David Stewart 404-881-7952 dstewart@alston.com Thomas Walker 704-444-1055 twalker@alston.com Michelle Williams 404-881-7594 mawilliams@alston.com Valarie Williams 404-881-7631 vwilliams@alston.com Jonathan Winer 202-756-3342 jwiner@alston.com

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