Tips for Closing Files and Removing Them From File Storage

We have been talking for the last sixteen weeks about “fail-safe tips” for law office administration. There are eighteen “fail-safe tips” in all. We have two “fail-safe tips” left to talk about in order to complete our discussion.

The area of administration is the second area of the five areas that make up every business in the world. The first area as you remember is clients or customers, and the second area is administration. After we finish talking about the area of “administration” we will be talking about the last three parts of every business, getting the work done, billing, and collecting your bill.

The seventeenth “fail-safe tip” is a system for closing files and removing them from the client file storage. I can almost hear the collective groan! You’re probably asking, does this guy Wirken even have a system for closing files, how up tight can you get? My answer is: “you betcha!”

If you are going to operate your law firm in a proper way, you need to have an overall system that starts tracking a client matter beginning with the initial contact form and ending with what you do with the client’s file after you have completed the task you were hired to do. Next week we’ll talk about a “system for organizing files to be retained and eventually destroyed.” But, this week we have to talk about a system of closing files and getting them out of the active-file system before we can talk about a system for storing files and eventually destroying them.

The very best way to talk about this system for closing files and removing them from the active-client file storage system is to simply ask you the question; how large of a storage area do you want to have?

I have been practicing for thirty-four years. Believe it or not, even though I am thorough, I am not a string saver! I try to save what needs to be saved, but have no qualms about pitching what I don’t need. When I stop and think about the voluminous amount of closed files I have collected over the years, it is simply overwhelming. I remember the first time I realized how much paper I had accumulated in closed files when I left a law firm I had been with for a little over fourteen years.

The firm had a client who owned a business that was in a cave in Southwest Missouri. Our closed files were stored in that cave. I think we had ten pallets full of boxes that were approximately four feet square and stacked approximately four feet high. About fifty-percent of those boxes were from my clients. I remember in the early 90’s I was asked as to whether or not those boxes could be destroyed.

I had been in practice at that time for twenty years, and I had been gone from that firm for three years, and so the answer was a resounding yes. It didn’t matter to us how these files were being stored, because the storage was free. The next time I had to face this dilemma was when I moved from a thirty-four lawyer law firm, where I was one of the named partners to a boutique practice of four lawyers.

Very quickly the inactive files began to take over a whole file room which was approximately 12 feet wide by 15 feet long, where we were paying an effective rate of $18.50 a square foot. That’s $3,330 a year for inactive file storage — yikes! You can obviously see what was happening, and in any active law practice, you are constantly opening up new matters and hopefully closing matters you have completed, and having to hold onto the paper.

It simply doesn’t make any sense to give all the closed files to the clients, in particular if it happens to be during the five year period when the client may have a claim against you for malpractice.

Generally speaking, I have found it much better that the lawyers keep the files and eventually destroy them than for the client to keep the file and never seem to be able to find it again. Pretty soon, active files began to push out the inactive files.

This storage room cost us about $1200 a year. This was for a totally unfinished, bare concrete room with concrete walls, floor and ceiling and contained a single light bulb.

It seems closed files are like rabbits. If you are doing what you need to be doing, the files eventually close and the closed files multiply.

When I moved from one office to another office, it became clear inactive files and closed files needed to be dealt with in a different fashion. We then were able to move all of these files to a cave in Kansas City that cost us $50 a month for storage. Obviously, $600 is a lot better than $3000.

Eventually all of these files were destroyed, but more about that next week. The reason I lay out all this information to you is that if you are doing your job inactive and closed files multiply and along with the multiplication comes increased cost, and therefore, increased overhead.

We will talk later about economic issues involving law firms in the categories of billing your fees and collecting your fees, but you need to understand that overhead is impacted by every one of the five areas that make up every business.

If you ignore overhead issues in getting “clients” or in “ administration” you will not be in business very long, or if you are, you will be starving.

In our office we have a system that when the client’s matter is paid in full, the file is automatically pulled and the responsible lawyer is asked whether or not the file can be closed. When the file is closed the lawyer who is responsible for the client must indicate on the front of the file folder in the upper right hand corner that the file is to be closed, the date that it is being closed, and sign off on the fact that it is to be closed.

Additionally, in the center of the file at the top in large numerals, the year five-years out needs to be placed so that the appropriate person will know what file box to put the file in so that it can eventually be destroyed. As a for instance, if a file was being closed on the day that you were reading this article, you would write the word closed in the upper right hand corner, then you would write March 31st and you would sign off on the file, and in the center of the file on the top you would put 2009.

The key to this “fail-safe tip” of administration is to have a person such as your bookkeeper be the person to implement the inactive and closed file system. Who knows better when a clients bill has been paid that the person keeping the books.

Additionally, lawyers need to be trained (good luck) about the necessity of closing files so that you are not spending top dollar for the space where you are keeping your client files handy for your daily use.

It is literally astounding how fast you can add file cabinets and take up space if you do not have some type of a system for closing files and removing them from the active-client file system.

When you stop and think about that a typical file cabinet now can cost as much as $400, and the space that it takes up in an office could be as much as eight square feet per file cabinet, and then when you add in the space to access the file cabinet, it can take up as much as twelve feet per file cabinet.

You can begin to see that when you start figuring out what your square footage for active files space will be, it becomes expensive.

This closed file system is not something you need to write up a memorandum about, you can simply implement the system. You could actually use this article as the memo. For your firm, highlight what it says in here and implement the system by utilizing this article as a memo.

The secret to this “fail-safe” system and other such systems is to set it up, make it work, make somebody in the firm responsible for the overseeing, implementing and making sure the system works correctly.

Then, periodically check up on the system when the opportunity presents itself. I believe you can see that the alternative to having systems that are “fail-safe” is a set of circumstances that at best is discombobulated and at worst expensive, disorganized, and potentially even chaotic.

Next week we will talk about the eighteenth “fail-safe tip” which is a “system for organizing closed files to be retained and eventually destroyed.”


When you have reviewed next week’s article, you should be able to start at the very beginning of the list that we gave you with regard to “fail-safe tips” and to readily see how there is a “fail-safe” system for everything from the first phone call to the time a client’s file is ultimately closed and destroyed.

You should be able, both in your mind and on paper, to take a typical matter that comes into your office and literally walk through every step that normally would occur with that client’s piece of business, all the while ask yourself whether or not you have a system that makes things happen when they should happen, and in the way that they should happen so that your practice is organized, efficient, economical, and ultimately, highly professional.

Of course you now know that if you do this, you will make your clients very happy, and you will also know that happy clients beget additional clients that you get to make happy.

If you haven’t started yet, get started! Find one of these “fail-safe” systems that make sense to you and utilize the article as a memo as to how you’re going to get it started in your office.

Talk to you next week!

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.