In this blog post, Neha Kalkotar, a Corporate Secretarial and Legal Consultant at Pratibha Group and pursuing a Diploma in Entrepreneurship Administration and Business Laws from NUJS, Kolkata, describes the best practices of maintaining client data.

Maintaining client data is an important step to be followed by every professional. Depending upon the needs of the profession, the practices followed to store data can differ. Irrespective of how different the practices can be, it is one of the key steps before effecting any transaction of the client. The importance of maintaining the data arises from the fact that it becomes very easy to retrieve information when required, which helps to take steps more efficiently and effectively.

Though the importance of maintaining the client data cannot be denied for any profession, its importance becomes magnified for legal profession considering the volumes of documents that are required to be maintained. If a proper system is not put into place to maintain the data, retrieving information will become extremely difficult which can affect the services provided by the legal professional and he will lose the trust of his clients.

There are various reasons for which the importance of maintaining the file/database of the client becomes magnified in the case of legal professionals. Some of the important points to consider here are:

1. Original documents are primary proof of transactions; hence if they are lost, it can create a disadvantageous position. In the case of certain documents, the procedure to apply for the duplicate copy of originals is very tedious and takes a considerable amount of time. In the case of others, the documents once lost cannot be reissued due to the very nature of the document and in such circumstances, the situation can become peculiar.
2. Original documents are considered by the courts as primary evidence. Hence if the same is not available or is lost, it may weaken the case as the Xerox copy of the originals is considered only as secondary evidence, the value of which is much lesser than the primary evidence.
3. When arguing before the judge, the legal professional makes reference to a variety of documents to prove the case, and if not kept in a specific order, he may find it difficult to find them which will effect his performance.
4. If in future, the case has to be transferred to any other professional, it becomes easy for the new professional taking charge of the matter to take note of the proceedings happened till date and based on the same he can take the appropriate action.

Apart from maintaining data in the physical form, it is equally important to maintain the data in electronic mode. As at this age where most of the work is done on the computers/laptops, it becomes strategically important to maintain a soft copy of the data so that they can be forwarded to any person through email which is a faster mode of communication than post or courier which are the usual options available to send documents. Thus, maintaining data in electronic form saves a lot of time which could otherwise be wasted on transferring the physical files whenever required.

With technology upgrading at such a fast pace and trendy smartphones coming along, it has become easier to work at your comfort from anywhere. People can work when they are travelling or waiting in some queue. Hence if the data is available in electronic mode, professionals can access it through their smart phones anywhere which will increase the pace of the work and they will be able to utilise their time more efficiently which goes redundant otherwise while travelling or waiting in a queue.

Irrespective of the huge benefits of keeping data in the electronic mode, the importance of keeping the hard copies of the data cannot be denied considering the fact that the Indian economy is mostly paper based economy and hence most of the original documents are available in physical form.

After discussing how important it is to maintain client data, let us also see how we can maintain the files/data effectively. Specifically taking legal profession into consideration, it is important for a legal professional to maintain separate files of the clients for each of the cases/matters. A further practice can be developed whereby the files can be coded to be able to trace it better. The files can or cannot be kept locked depending upon the confidentiality and whether the document is indispensable/critical in relation to stakes involved in the matter. It is of paramount importance to the legal professional to take care of such confidential documents which if misplaced/ lost can cause them to lose the trust of their clients. Documents such as original wills, Power of Attorneys, Title documents, etc., should be specifically kept at the safe custody going by the very nature of the document.

For the purpose of better understanding, the files maintained can further be sub-categorized depending upon the requisites, say, for example, original documents, Xeroxes, plaints, legal research, financial statements, miscellaneous, etc.; so that it becomes easier for one to trace the documents quickly. Also, another system which can be developed whereby active working files are kept separately from the passive files so that the professionals can effectively work on the active files.

Some precaution needs to be taken while maintaining the records in electronic form also. It is important to devise a plan and segregate folders to cater the needs of a different category of matters. It is further important to safeguard the electronic information via firewalls, encryption and passwords if they are confidential information so that only people who have a ‘business need to know’ can see the information which is otherwise sensitive to be disclosed. Furthermore, the documents in the electronic form should be maintained with cross references to the physical copy/ paper documents.

Before starting to maintain the client file/database, the first step is to determine when to start maintaining the file/ database. The legal professional should recognise the necessity to maintain the file/database. Ideally, when the client approaches the legal professional for his work, the legal professional should interview the client and start maintaining data from there onwards.

Maintaining effective database of the clients helps avoid any conflict which may arise at a later stage owing to the natural tendency of human beings to forget. The memory of an event can be different for different people, hence to avoid any conflict arising on that note it is always advisable to put the communications in the written form either through email or letter or any other suitable correspondence except where the information are of confidential nature.

Just as important it is to have a file opening policy, it is equally important to have the file retention and closing policy in place for the effective closing of the files. Before closing any file, the legal professional should ensure that the file is properly reviewed before it is closed. It is also important to ensure that the files are distributed, retained and disposed of properly as discussed with the client. The legal professional should see to it that the scope of work provided by the client has been completed and confirm that there is no legal requirement or any other likelihood of the need for the document in future before disposing of the file.

Since the legal profession has a lot of deadlines to adhere to, it is important to effectively maintain files/ legal database to effectively finish the work in the time bound manner.