First off, let's start by explaining the concept of "retention policy" and how companies use these "rule-books" to secure their private data. A "document retention policy" is a set of guidelines that a company follows to determine how long it should keep certain records, including e-mail and web pages. The policy is important for many reasons, including legal requirements that apply to some documents. The objective of a document-retention policy is to reduce the volume of paper in storage, or data on disk, meet legal requirements for record keeping, and stem paranoia. It's a combined way to simplify and organize data and it can be valuable to an investigation.
Much of the financial and time costs incurred in responding to electronic information discovery requests may be avoided if the responding party has implemented a document retention policy. Companies that effectively manage their electronic information may also experience a tactical advantage in litigation.
There are a few guidelines in properly managing retention policies. First, make sure the documents needed are filed in a hierarchical, systematized way, for easier access to them. The second rule is that all documents that you see fit to be relevant in an investigation or in the court of law, should be retained. Third, the documents preserved must comply with the state and national laws, for obvious reasons. Storing permanent documents on a microfilm is another good suggestion, as it might be useful in case something happens to the original information. And last but not least, probably the most important guideline of all: destroy ALL other documents. This last rule might seem a bit harsh, but as the proverb goes: "Keep it only while you need it, destroy it when you don't and don't destroy it if you've been ordered by the court to retain those records." While it is important to clear out clutter, tossing the wrong paper or deleting an important e-mail can have disastrous consequences.
Now, people often ask: "Why should I have a retention policy at my company? Everything works perfectly without it". The main reason of course, would be to make that "perfect company" more efficient. A policy will facilitate your business' operations by promoting efficiency and freeing up valuable storage space. The second main reason is that it can protect you in litigations and help ensure compliance with federal laws and regulations. A well-managed computer file and e-mail retention policy reduces legal exposure and can save substantial time and money when responding to a production request.
Here are some documents that a retention policy should contain:
Employment Documents: - Documents produced when employing someone for your company should be kept for the period that person works for you, plus an additional period of time, in case the former employer files a lawsuit.
Corporate Tax Records - It is extremely important that you maintain a record of your business transactions such as tax returns, gross receipts and expense receipts. The IRS requires that your records show income, taxes, deductions and credits so this is one of the most important types of data you should retain all the time.
Legal Documents - Legal documents are some of the most important documents you may retain. Careful preservation of contracts, land records and intellectual property documents often means the difference between winning and losing a particular claim.