Document management: an ounce of prevention | Vinson & Elkins LLP
[co-author: Laura Roberts]*
This memo examines the importance of records management as a risk mitigation strategy for businesses and provides a list of the “Top 10 Tips” for setting up and using a DMS. Whether it’s a hundred thousand and one business, it can be difficult to manage data manually. Ultimately, any business, regardless of size or industry, will benefit from having a system in place to organize, collaborate, and keep records.
Document management, or the use of a document management system (DMS), concerns the electronic storage, organization and tracking of documents, using computer systems and software.1 Documents can either be electronic by origin (e.g. emails) or converted to electronic documents from paper data (i.e. any original document that has been scanned and processed electronically – a letter, a report, drawing, etc.). With the era of dusty filing cabinets now largely obsolete, we have seen a marked shift from paper-only files to paper / digitized hybrid documents, to almost all documents originating from and stored in electronic sources.
Importance of document management
There are several advantages to using a DMS, including:
- reduces paper, printing and storage costs as well as the time spent browsing physical documents;
- provides a secure forum for storing, organizing and tracking data;
- improves efficiency and productivity by allowing easier access, review and retrieval of documents; better process control; and better global collaboration;
- improves the accuracy of document search with a concomitant reduction in the risk of error; and
- demonstrates a commitment to the environment.
From a legal risk mitigation perspective, there are also several advantages:
- protect and secure data;
- prevent data loss or lack of data availability;
- limit damage to reputation caused by data breaches; and
- ensure regulatory compliance.
In addition, in the event of a dispute with a counterparty, when developing and advancing a strong position, an organized and complete recording of documents is invaluable. In order to fully understand the dispute, it is often necessary to review a large number of documents, which may include both favorable evidence (i.e. documents that support the position) and less favorable evidence ( i.e. documents that may not support the position).
Documents can also aid in recall so that those involved can better remember details of past events and fill in information gaps to gain a more complete view of the circumstances surrounding the dispute. On the other hand, incomplete registration of documents, combined with the inability to sort and filter documents according to criteria such as time or purpose of the project, can hamper the preparation of a strong position.
The lack of good contemporary document management creates a number of legal risks:
- In the event of a dispute, there is often an immediate and urgent need to identify, collect and review documents. If the data is not already organized, it can slow down preparations and the ability to develop a strong position.
- There is also a risk that important documents may be lost or difficult to locate. It may be too easy, for example, to remember an e-mail or letter that may have been sent, to be faced with a complete inability to find it.
- For witnesses or affected persons who need documents to examine or assist their memory, if these documents cannot be found, their history may be incomplete. Even if they can be found, the lack of organization will make it difficult to complete the story or refresh their memories.
- It may also be more expensive to set up a DMS in case of an urgent need, as significant resources may be required both internally and externally to meet this demand.
In short, selecting a DMS is now an important legal risk mitigation exercise.
“Top 10 Tips” for Good Document Management
Below are some suggested guidelines for setting up and using a DMS:
- From the outset, seek advice on select the right type of DMS to organize documents in a way that makes sense for your business.
- Limit the number of files and avoid proliferation of files, which can create doubt as to where a document is held.
- Configure and use Default folder and file structures, with a logical hierarchy. For each identifiable project, create a unique path for this “root” folder, with the relevant subfolders.
- Ensure a reliable dating system is in place.
- Intuitive setup and monitoring file naming conventions to facilitate identification.
- To file as you go. It is much better to file documents regularly than to let the task snowball, increasing the risk of inaccurate / missing documents, and then attempting to ‘catch up’ in retrospect, or in response to a problem or problem. problem.
- Regularly back up files using a centralized backup system supported by IT specialists.
- Archive redundant files to avoid permanent deletion.
- Maintain a Document retention and destruction policy, which specifies when documents should be kept and destroyed.
- Communicate with all employees document good practices to ensure alignment and make it clear that each member has an ongoing obligation to follow company policy.
When it comes to records management, an ounce of prevention is worth a pound of cure. Setting up and adhering to an ongoing DMS can seem expensive and time consuming, but the benefits of doing so outweigh the potential negative consequences. Have an accurate and efficient system in place today and ‘get your documents in a row ”not only improves efficiency and productivity, but can also help mitigate legal risks.
* Laura Roberts is responsible for litigation support in the Dubai office.
1 Basically, there are four types of DMS: server-based; data-driven; on the Web ; and cloud-based. While there has been a definite shift towards cloud-based platforms over the past few years, ultimately every business will have their own unique set of requirements and their own workflow; It is therefore important to consider the spreads that each offers and to select the right type of DMS for your business.