June 1, 1998

5 Min Read
Law firms and records management

The Legal Industry
Records Management and Litigation Support Services

By Cary McGovern

Law firms generate and maintain huge volumes of records. Most legal records are legalcase files called "matters." Litigation work is the most prolific of all legalfiles, and it is not uncommon for a single matter to generate several boxes of files. Inmass-torte litigation, matters may generate hundreds or thousands of files and boxes. Lawfirms widely use off-site storage and require many services to assist them with theirwork. This column will describe the idiosyncrasies and nuances of the legal market.

Law firms and records management

Lawyers, pound-per-pound, out-weigh even oil companies with the number of file boxes instorage. It is safe to say that law firms have long been the "usual suspects"for records management services. This has been true for many reasons. However, the legalindustry is under great pressure to change the way it does business. Clients are weary ofpaying endless hourly fees to lawyers without a lot of accountability or measurability.Today, law firms are under pressure to change the way they bill their customers, and it'snow becoming common practice for a law firm to sell its services on a fixed-price basisrather than on the traditional hourly rate. Additionally, the Association of LegalAdministrators (ALA) and the American Bar Association (ABA) have recently issuedrecommendation statements to their members concerning charge back of "marked-up"services to their clients. As you may know, law firms have traditionally billed for copiesand courier services at cost plus a profit margin, e.g., copy costs are 25 cents per page.

Legal records are typically set up in file folders and file pockets called"red-wells." Clients usually have several matters. Red-wells are usuallyfour-inch filing media in which file folders are inserted. A legal file may have severalstandard components called "sub-files." These sub-files are normally insertedinto red-wells.

Law firms will normally have three levels of filing:

  • Current files at the legal secretaries' work stations in red-wells.

  • Central file rooms in red-wells.

  • Off-site storage; red-wells in boxes.

When cases or matters close, they are usually boxed up and sent to an off-site locationfor storage. Law firms generally use everything from self-storage facilities to commercialrecords centers and everything in between. I have seen legal case files records stored invery unusual places. I know of one law firm with about 200 lawyers in four Californialocations that have 55,000 cartons of records in three off-site storage facilities andmore than 100,000 red-wells on site. Records are everywhere and are choking their internaloperation.

Indexing and retrieval services

Since each legal file that comes to storage specifically references a client andmatter, it is a great candidate for indexing services. Indexing is the method of creatinga reference database for each file and sub-file in every box. This enables fasterretrieval and identifies the inventory at a more detailed level to help locate files moreeasily.

It is safe to say that legal records are quite volatile. Lawyers "want what theywant, when they want it." This requires fast retrieval and delivery services, usuallywithin one hour of the request. This type of delivery is actually quite profitable.Commercial records centers can use independent-contractor couriers for"hot-shot" delivery service and charge as much as $50.

Additionally, case or matter files are among the highest retrieval requirements on aregular basis in any commercial records center. Lawyers constantly re-use documents fromolder matters or case files, so they refer back to old files consistently. Retrievalrevenue sometimes exceeds storage revenue for law firms.

Litigation support services

Litigation support is a complex issue, but I will keep this discussion fairly simple.Litigation support is a fairly new phenomenon. It is the result of an attempt to reduce orcontrol the cost of large lawsuits or litigation matters. The primary reason for itsemergence is to reduce the professional (lawyer) time (usually billed at $300 per hour ormore). Paralegals are more often than not the case file managers for the document assemblyand review processes. Their job is to go through the mountains of paper and determine whatis worthy of lawyer review. They commonly separate documents into three types: hot, mediumand cold. The hot documents are usually very important and are available in full-textsearch. The medium documents are indexed to several key indices and maintained indatabases. The cold documents are indexed at the red-well or file level for possiblefuture use. It is common that copies or scanned images are made of many of the documentsthat are reviewed.

Commercial records centers can offer many of the services that are embedded in theselitigation support activities. Several are listed for your information:

1. Document repository management: You can provide separate space for documentstorage as well as work space for the support staff. Sometimes the staff works for theoutsourcer.

2. Copy production management: On-demand copying, packaging and shipping ofspecific documents for discovery--the legal term for the acquisition of information orspecific data from the opposing client or council--and co-council work assignments.

3. Indexing services: Creation of database references for documents, files,sub-files and boxes.

4. Document imaging services: The imaging process is much like a combination ofindexing and copying. Documents are scanned and indexed to several references and storedelectronically in document form on electronic media.

5. All of the above: Some commercial records centers specialize in litigationsupport and offer all of these services and more. Although this service requires a highlevel of expertise, it is quite profitable.

The legal market is a great place to start when you are developing your prospect list.Even small law firms are good prospects. Remember that the more services you provide, thebetter your chance to capture the business.

Next month we will explore the medical market and medical records management.

Regular columnist Cary F. McGovern is a certified records manager and owner of FileManagers Inc., a records-management consulting firm that also provides outsourcingservices, file-room management and litigation support services for the legal industry. Formore information about records management, contact Mr. McGovern at File Managers Inc.,P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail: [email protected]  or Web: www.fileman.com.

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