Constructing an e-document retention policy.

Electronic records, because of their volume and ease of creation and destruction, present special problems for business managers and their legal advisors trying to formulate a document retention policy.

But failure to formulate a policy effectively delegates to individual employees decisions that can seriously impact the entire organization.

Development and construction companies have special problems. The sheer volume of records--plans, specifications, contracts, sub-contracts, correspondence, change order requests and responses, budgets, time-lines, field diaries, invoices, checks, accounting records--is daunting enough.

The impact of e-mail has been to facilitate both the generation of original documents and the distribution of copies throughout an organization, with many individuals further dispersing data among office, home, laptop and personal digital devices.

While every company has some unique concerns, most will expect their document retention policies to satisfy at least the following goals:

Confidentiality. The ease with which electronic documents can be duplicated and transmitted presents a real challenge in protecting trade secrets and confidential le gal communications. Devising a method to identify and control such records is crucial.

Inappropriate material. Documents that have nothing to do with the legitimate interests of the business generally should not be created or retained. Many e-document policies state that the company's computer equipment is for official use only and specify disciplinary sanctions for inappropriate use.

Privacy. The law on worker privacy is highly variable. It may be particularly important to get legal advice on this issue. In general, however, it may be desirable for a business to clarify whether and when workers may expect e-documents they create to remain private. Clear notice to employees that there should be no such expectation may be beneficial.

Regulatory concerns. Businesses in certain sectors are subject to regulatory requirements for record-keeping. Again, it may be very important to get specific legal advice on such regulations. In general, however, one goal of an e-document retention may be to ensure that all necessary records are retained, and to make it easy to demonstrate to government authorities that record-keeping requirements have been met.

Burden and cost. Reduction in the burden and cost of record-keeping is often an essential goal of a record retention policy. For many businesses, this means destruction of records on some regular schedule. Although electronic storage costs have fallen, the burden and cost of reviewing and producing large volumes of non-essential materials in the event of litigation remains a legitimate concern.

In general, an organization's document retention policy should be consistent across all media. Employees should not have to learn one set of rules and principles for paper documents, and another set for electronic documents. Still, e-document retention raises unique questions in the context of litigation. In the event of actual or imminent litigation, a business may have a duty to preserve records. But many kinds of electronic records are not designed to be permanent. E-mail systems often routinely delete messages after a brief period. Instant messaging and bulletin board systems may delete even faster. Shared documents, or documents that are regularly updated, cause changes in records that might run the risk of being labeled "spoliation" of evidence.

One potential solution is to take a "snap-shot" of data at a point when actual or imminent litigation appears.

Part of the e-document retention planning, therefore, should include some consideration of how electronic records that are routinely destroyed can be preserved, if the business were required to do so.

Another unique challenge to the document retention policy writer is the distributed nature of electronic records, which can be generated and stored in desktops, laptops, hand-helds or other electronic storage devices.

The policy should clearly identify official operations. Where destruction of documents is directed, steps should be taken to ensure that copies are not retained in unauthorized locations.

Incomplete destruction is a related problem. For instance, "deleted" e-mails may continue to reside on a server until the storage medium is over-written with new data.

A document retention policy should establish a protocol to ensure that destruction directives are fully implemented. E-mail, for example, can be encrypted and encryption keys periodically changed.

Although construction of an e-document retention policy may still sound "cutting edge" today, there will come a day when any substantial business without a thoroughly planned, effectively implemented, frequently reviewed e-document retention policy will operate at a serious disadvantage.

* The views expressed are solely those of the author and should not be attributed to the author's firm or its clients.