A legal note from Marshal Willick about the worst court rule now on the books in Nevada, requiring lawyers to warehouse vast amounts of useless paper at their clients’ expense for no valid purpose.
Lawyers live in a world of rules. This is part of an occasional series of notes concerning court rules – the good, the bad, and the ugly – and how they affect people in the real world. There are some real stinkers; this note is about one of those. And sending this note sets me up like a shooting gallery duck because I’m neck deep in a pending set of them myself (i.e., the EDCR 5 re-write, which will be addressed at a later date).
If someone was to intentionally design a lousy court rule, it would have the following features:
Fail to actually do any good.
Create expense and difficulty for lots of people.
Conflict with other legal and ethical obligations.
Be difficult or impossible to comply with even if attempted.
The “document retention” rule added to the Nevada Electronic Filing and Conversion Rules in 2011 as NEFCR 11(e) actually achieves all of those “goals,” and should never have been enacted.
I. BACKGROUND: ELECTRONIC FILING AND THE ELUSIVE “ORIGINAL”
Lawyers are document pack-rats by nature. Legal lore includes many stories of alleged forgeries and contested document authenticity (the “Howard Hughes Mormon Will” adventure leaps to mind), which has led over the centuries to lawyers and judges having a natural predilection for securing and preserving the “original” of any document whose authenticity might ever be questioned.
But times, and needs, change. From the time they were enacted in 2006, what is now known as the Nevada Electronic Filing and Conversion Rules (“NEFCR”) included a provision, copied from the model from which they those rules were taken, providing that the electronic form of an e-filed document is the “official court record” of that document.
This freed the courts from having to store paper, leading to incredible savings in personnel costs, physical space availability, and other achievements.
The rules direct courts to retain a few items on paper – original wills, deeds, contracts, court exhibits, or anything deemed by a judge to have special “evidentiary, historic, or other intrinsic value.” For everything else, once scanned into the system, the paper from which the official court record was generated became a worthless redundancy to be disposed of.
In many cases, and increasingly, there is no piece of paper preceding the electronic filing because the “document” was created entirely in electronic form on a screen without ever being printed. This legal note is such a document – from conception to editing to your viewing it, it has existed only virtually, and if you print a copy, you have done just that – the “original” is still entirely electronic.
But what about “signatures”? The rules provide for (typed) electronic signatures as well, and for the filing or service of a document to be deemed the “signing” of the document, and for even notarizations to be printed, signed, stamped, scanned, and then electronically submitted, thus “creating” the electronic “original” of the document.
A decade ago, virtually everyone in law took the court system’s cue and started to go “paperless.” All over Nevada, storage units full of hoary case files were scanned, digitized, and destroyed. Lawyers were suddenly freed of the necessity of maintaining off-site storage facilities just to store paper, at substantial savings. Then-Bar Counsel confirmed that scanning paper files satisfied all ethical requirements about retaining financial records (this is discussed further below).
A committee in the Eighth Judicial District (Clark County) discussed in great detail the way in which documents are actually created, circulated, signed, and filed, including the reality that many documents (for example, stipulations) are signed at different times in different places, so that no e-filer could, as a practical matter, truthfully attest to the validity of the signatures.
The rules (EDCR 8.07(e)) were therefore amended to assert that the e-filer verifies “that the signatures are authentic to the best of the filer’s knowledge and belief.” This was seen as the optimum balance between efficiency and verifying legitimacy, replacing the cumbersome requirement of creating two different versions of every signed document as set out in the prior rules.
Noting that the NEFCR deems the electronic form of every document in the court’s electronic files to be the “original,” the committee deemed it illogical to require retention of the paper documents from which that original was created. It did away entirely with the prior requirement of EDCR 8.07(i)-(j) & 8.08(a) for two years’ retention and production upon demand of the paper from which the electronic original was produced, which requirement had caused so much consternation, confusion, ethical complexity, and unnecessary cost on the part of the Bar.
Notably, the district attorney’s office – especially the child support enforcement unit – had been especially critical of what their personnel described as the waste of a large number of hours, significant physical storage requirements, and diversion of funds and manpower needed for substantive work to satisfy this paper-retention requirement – without a single instance in which the paper original of an e-filed document had ever been requested, by anyone.
This was a topic on which considerable time was spent. The committee examined all the different kinds of criminal, civil (including probate and construction defect), family, and other filings that were made, and noted the extremely small number of cases in which the legitimacy of signatures was contested. It examined the variations in procedure and burdens of proof for any such legitimacy contests, with and without the document-retention requirement, weighed against the inconvenience and cost of requiring every lawyer to keep massive amounts of almost-never-referenced paper.
Judges and practitioners in every field participated in the discussion, and ultimately, the question was considered not even close: the document-retention policy was unnecessarily burdensome and expensive, and it was eliminated.
II. THE NEVADA SUPREME COURT’S CURVE BALL
It took a year for those burden-eliminating rules to wend their tortuous way through the Byzantine array of committees that review rule changes in Clark County. In August, 2011, during that year, the Nevada Supreme Court altered the NEFCR to include a new provision – 11(e) – which requires an “electronic filer” to “retain the original version of a document, attachment or exhibit that was filed electronically . . . for seven years after termination of representation” so that the “the court may require the electronic filer to produce the original of the [e-filed document].”
In other words, the Court replaced the burdensome and expensive 2-year paper retention provision for signature pages that the Clark County Committee had just done away with, with a massively more burdensome and expensive 7-year provision that expanded the requirement of what had to be kept from “signature pages” to entire documents.
This was a really “big deal” because just sixty days earlier, the Court had also adopted ADKT 418, which contained rule changes essentially making e-filing in all civil matters mandatory. As a practical matter, this made the document-retention rule apply to essentially every piece of paper ever filed by everyone, in every case.
III. THE ETHICAL COMPONENT
As part of the Clark County review of the original electronic filing rules, prior Bar Counsel made a presentation to the Clark County Family Court Bench/Bar Committee. As he pointed out, even the prior two-year original-signature-retention rule created an ethical dilemma.
Specifically, counsel has a duty to return the entire client file to a client, relinquishing any retaining lien, once the client pays the outstanding bill. NRPC 1.16(d). A later Bar Counsel lectured at Ely, stressing that while a lawyer can make a copy of a file, it is the original that must be returned to the client. A rule simultaneously requiring counsel to pick out and retain all signature pages directly conflicted with that duty, making the lawyer’s duty unclear; this was part of the Clark County committee’s reasoning in eliminating the retention rule.
If anything, NEFCR 11(e) made the prior ethical dilemma much worse, increasing both the quantity of paper counsel must keep and the time counsel is required to retain it, while counsel remains subject to the same existing ethical rules requiring surrender of the file to the client. And if most files are routinely surrendered – as required by those ethics rules – any conceivable utility that the document retention rule might have been thought to have would be inconsistent to the point of being illusory. If the Court meant to repeal the ethics rule by making the electronic filing rule “other law” taking precedence, they were not clear about it.
A member of the Clark County committee called Carson City when NEFCR 11(e) appeared, spoke to a person involved in some way with drafting the new rules from that end, and was apparently told that NEFCR 11(e) grew out of a reference to Rule of Professional Conduct (RPC) 1.15 (“Safekeeping Property”). This makes no sense.
Section (a) of NRPC 1.15 (“Safekeeping Property”) first requires a lawyer to hold funds or other property of clients or third persons “separate from the lawyer’s own property.” The second sentence speaks to how a lawyer should hold funds, and the third compels a lawyer to “appropriately safeguard” any “other property.” The last sentence, which was apparently the basis for NEFCR 11(e), states:
Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of seven years after termination of the representation.
Nothing in the extensive annotations to Model Rule 1.15 suggests any kind of duty to keep the entire original paper file of a client for seven years. The intent of the quoted language is only to keep accounting records for seven years sufficient to allow authorities to figure out what happened to client funds if anyone questioned where the money went.
Long before NEFCR 11(e) was drafted, former Nevada Bar Counsel was asked about the meaning of the Nevada enactment of the ethics rule, and said exactly what is set out above. Nearly a decade ago, my office asked for an opinion by the Bar regarding record and copy-keeping requirements, as part of our intended transition to a “paperless” office without any paper storage after the close of a case. Our proposed retainer agreement language was:
After payment of all sums due and upon Client’s request, Attorney will deliver
Client’s file (other than Attorney’s personal notes, briefs, and work product that
Attorney elects to retain) to Client, along with any Client funds or property in
Attorney’s possession. If Attorney is not instructed otherwise, Client’s file will be
kept in Attorney’s office for a limited time after completion of the case. Files are
digitized, stored as PDF files and then destroyed upon completion of a case. If
you want your file, or anything out of your file, you should obtain it promptly
upon conclusion of your case.
The Bar had no problem whatsoever with this intended procedure; upon specific inquiry, the Bar instructed that it was irrelevant in what form the required retention of accounting records was made, specifically approving retention of electronic billing records as complete compliance with RPC 1.15.
Both prior Bar Counsel and I were on the Ethics 2000 Committee that reviewed RPC 1.15 (along with every other ethics rule) before submitting it to the Nevada Supreme Court for approval in 2004. Neither he, nor I, nor any other member of the Ethics 2000 Committee saw any need for any alteration in the rule, or the prior interpretation of the rule, based on any development in ethics law during the prior 20 years.
In other words, nothing in RPC 1.15 actually requires or even hints at the provisions now embodied in NEFCR 11(e) for physical retention of every piece of paper filed in every case for seven years after completion of representation. NEFCR 11(e) has no valid purpose in legal ethics of any kind.
The Nevada Supreme Court was apprised of everything in this legal note – in writing – twice – four years ago. There was never a response, reaction, or even acknowledgment of any kind, apparently because the physical, economic, and ethical problems created by the rule are “somebody else’s problem.”
IV. WHAT THE RULE MEANT IN THE REAL WORLD – AND ITS COST
In the real world of litigation, a great deal of discovery – for example, bank records – is received on disk in electronic form, and never printed; if portions of it are deemed relevant to the litigation, those pages are electronically extracted and attached to filings. It is believed that this is even more common in certain other legal fields than it is in family law. Requiring each page of that information that is filed with the court to be printed and retained in paper form is a leap backward in the evolution of legal practice.
In terms of in-office procedure, it is even more counter to what has actually been going on in the real world to impose any such requirement as NEFCR 11(e). Many firms – this one included – spent considerable time and effort over the past 15 years digitizing and then destroying all paper files, eliminating the cost of off-site storage while actually greatly improving the ability to find and retrieve closed files. While no hard statistics are known, I personally am aware of similar initiatives in dozens of firms, large and small, across Nevada. Many, as we did, entirely eliminated paper copies of closed files before 2011.
NEFCR 11(e) requires exact reversal of all such efforts, at a staggering real-world cost. In a family law case, it is not that unusual for a file to remain open for more than a decade – perhaps for the entire minority of the children. Keeping the paper file for such a client for “seven years beyond the conclusion of representation” requires physical retention of every scrap of paper filed – no matter how trivial or useless – for a quarter century.
The physical file-storage requirements alone are enormous, in both total size and cost, inevitably pushing up the overhead cost of running a law office and thus the price of legal representation for every client for no practical purpose whatsoever. As far as I have been able to determine, no actual judge in any actual case has ever asked for production of a piece of paper from which the electronic original was created since NEFCR 11(e) was enacted.
What have most firms apparently done? Ignore the rule. Or keep some paper, and destroy other paper, making up internal rules as seems prudent and making the “rule” as a matter of uniform practice a sham. If anyone, anywhere, is actually doing what the rule says must be done (keep paper copies of everything ever e-filed), that firm is penalizing itself, and its clients, by creating massive paper-storage costs that its clients are ultimately paying for.
What happens in the real world when someone wants to reference a document from an old file is that the court directory, or the lawyer’s back-ups, are electronically searched and a copy of what was filed is reproduced, usually in minutes, from any desk in any office.
But what if some judge, someday, ever actually did “require the electronic filer to produce the original of the [e-filed document]”?
First as a practical matter, an expedition would be sent into a storage facility, years or decades after it was packed and stored. If the original file had not been given to the client as required by the ethics rules, if it was marked and indexed adequately by the (probably now-departed) staff member charged with that task – and if no fire, flood, or other happenstance had overtaken it since then – then it is possible that the appropriate box could be found in the dusty and cob-web-filled Raiders-of-the-Lost-Ark warehouse. The reward for what would at minimum be hours of effort would be the retrieval of an aged piece of faded paper, stored in the heat for however long had gone by, which might or might not still be readable.
And if the lawyer cannot, or does not, produce the magic paper despite that Arthurian quest? Unknown. The rule simply creates a mandate, with no mechanism or consequence.
This has generated grumbling along the lines that there are members of the judiciary who, blissfully insulated from any concerns as trivial as the real-world economics of practicing law, see, or at least acknowledge, none of the problems or expenses that have been inflicted.
V. THE UNFAIRNESS OF BURDEN-SHIFTING
Part of the Clark County discussions concerned the double-standard by which the court’s electronic form of a document was considered the “original” of the document, while maintaining that for lawyers, the paper copies from which those electronic forms had been created would be considered the “originals.” Included in this discussion was the reality that the court was in the process of destroying virtually all paper copies of virtually all documents already on file, as they had been deemed irrelevant to the official record.
The committee noted that in all practical terms, the reality of the situation was that the court was shucking off to the private Bar the duty of maintaining the court’s paper file – at the expense of lawyers and litigants. Any such purpose – or, if unintentional, such a result – was seen as indefensible and unjust. In the ensuing several years, no better explanation has appeared.
VI. CURRENT COMPLICATIONS
Clark County is again reviewing its e-filing and service rules. The burdens and illogic of NEFCR 11(e) loom over everything that the committee is attempting to accomplish for the litigants, counsel, courts, and administration of Clark County, complicating and making more expensive and burdensome everything that the current committee might otherwise hope to accomplish.
VII. AN ASIDE ABOUT THE RULE-MAKING PROCESS
It seems likely that the specific problem addressed here – and the time, effort, and expense of addressing it by all concerned – was caused by the fact that the Nevada Supreme Court was not even informed of the efforts (or existence) of the Clark County committee, and by the year-long delay in forwarding the committee’s recommendations to the Court for adoption. If the Court had been informed of what the Clark County committee was doing and why, NEFCR 11(e) as issued presumably would never have been drafted.
No one in the Clark County rule-making hierarchy apparently had any clue that what became 11(e) was even proposed until after the rule was published. How can this be so? Both ADKTs leading to those rules indicated that “public notice” was given and “open hearings” were conducted, but apparently no judge and no lawyer in Clark County involved in addressing the very same rules heard anything whatsoever about either the proposals or the hearings.
The current rule-making process in both the Supreme Court and the district courts is so slow, inefficient, and non-communicative as to be dysfunctional. It would be in the best interest of the Nevada Supreme Court and the Clark County courts, and most certainly in the best interest of the Bar and the general public, for the process of rule-making to be examined, streamlined, and improved. At minimum, the process of informing each entity of the matters under review by the others should be improved.
VIII. CONCLUSION AND RECOMMENDATIONS
NEFCR 11(e) contradicted and turned back the clock on much of what forward-thinking lawyers, judges, and other policy-makers were trying to accomplish. The rule does no actual good for anyone, in or out of the court system. It creates enormous expense and difficulty. It conflicts on its face with the legal and ethical obligations of attorneys to their clients about what to do with their files. In the real world, it is difficult or impossible to comply with. And it is interfering with improvements that could otherwise be made in the local e-filing rules. All of that makes it a lousy rule, which should be eliminated.
What can anyone sharing this opinion actually do? Perhaps it’s time to draw inspiration from newscaster Howard Beal (Peter Finch) in 1976’s “Network” and have every lawyer in the state of Nevada go to their phone, call a Supreme Court Justice and yell into the receiver “I’m mad as hell and I’m not going to take it anymore!” Just a thought.
The entire text of the NEFCRs should be reconsidered in light of the recommendations made by the Clark County committee seeking to revise the e-filing rules in Clark County, since some of the recommendations made appear to be superior to what was adopted as the state-wide rule set.
At minimum, a further public hearing to discuss the differences between the local rules and the NEFCR, what would be better for Bench, Bar, and public, and why, would appear to be warranted.
In the larger picture, the rule-making process, both at the Clark County and Supreme Court levels, should be examined, streamlined, and improved, with the objectives of increasing the speed and efficacy of the rule-making process.
IX. QUOTES OF THE ISSUE
“The paperless office is as much a myth as the paperless bathroom.”
“Somebody Else’s Problem field” definition: “Somebody Else’s Problem field, or SEP, is a cheap, easy, and staggeringly useful way of safely protecting something from unwanted eyes. It can run almost indefinitely on a 9 volt battery, and is able to do so because it utilizes a person’s natural tendency to ignore things they don’t easily accept, like, for example, aliens at a cricket match. Any object around which an S.E.P. field is applied will cease to be noticed, because any problems one may have understanding it (and therefore accepting its existence) become Somebody Else’s Problem. An object becomes not so much invisible as unnoticed.”
– Hitchhiker’s Guide to the Galaxy Wiki; see Douglas Adams, LIFE, THE UNIVERSE AND EVERYTHING (Random House, 1982).
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