Reality: Records Management is a discipline that starts when a record – paper or electronic – is actually created. By waiting until a record is no longer active to begin tracking its movement and access, companies are missing an opportunity to make the record accessible, authentic, and reliable.
These characteristics of a record are required by the courts and government auditors. So if you don’t recognize this early on, you face a “pay me now or pay me later” scenario if your company becomes involved in litigation and has to gather responsive materials.
In “pay me now,” you take the necessary time to manage records correctly throughout their lifecycle. In “pay me later,” you spend significantly more time and expense gathering case-related materials with a greatly increased risk of incurring penalties and sanctions.
Reality: Anyone who has hired non-trained staff to catch up on filing knows the fallacy of this myth. Without a well-conceived filing plan, including naming conventions and standards, documents are often lost or misfiled. The latter can mean more time spent later when you need to find certain information in a hurry.
As an example, imagine you just started a records management position where your predecessor, who was inexperienced in records management, filed proposals and contracts without metadata (information about an item’s content, such as its date). Your boss calls and requests that you access a particular proposal and read some details over the phone. You ask, “Do you know the date of the proposal?” She answers that she doesn’t know the date and only gives you the client's name and the topic of the proposal.
Your best bet is to do a Windows keyword search on the topic (versus keying in the metadata), which yields a long list of related documents, including original drafts. Finding the details you want is not going to be easy or quick – because there was no records management program in place to instruct your predecessor on how to handle the metadata.
Reality: Compared to what? If your company doesn’t have a records management program, the first disaster you encounter could put you out of business! The reason: responding to a discovery request can cost your company millions of dollars in unrecoverable costs if supporting records can’t be found.
Also, your insurance company is now less likely to pay out if your company lost a court case because it didn’t comply with Rule 26 of the Federal Rules of Civil Procedure. (This rule assumes that your company has a records management program in place and can find case-related data.) If this is not the situation, your company can be considered negligent.
Reality: People who believe this often refer to the “IRS rules.” The IRS rules, however, vary from three years to indefinitely, depending upon whether or not you owe additional taxes. (If you owe but are not found fraudulent, the three-year standard applies. If you are found fraudulent, three years becomes “indefinitely.”)
The seven-year recommendation is primarily for a securities loss or a bad debt reduction. Records retention periods vary from state to state, at the federal level, and for global companies. Additionally, contractual obligations between companies increasingly include requirements for retaining records pertaining to the contract’s execution.
Reality: If you’re referring to a record created at work, this is not correct…it’s the company’s record. Employees need to realize that keeping a copy “just in case” after the published retention period has been met can be harmful to the company for a number of reasons.
Here’s one: if your company claims to have destroyed a record, and a copy of that record is found during discovery, the court could consider that copy to be relevant to the case. It can also hurt credibility. Since your company claimed the document was destroyed, but it wasn’t, opposing counsel might suggest investigating other documents that your company claims it destroyed.
Here’s another reason: Keeping obsolete copies can lead to bad decisions, as in acting on an old version of a contract that doesn’t contain subsequent amendments and revisions.
Finally, it’s not “your record” even though you might feel free to take company records and data off a secure network and put them on a thumb drive or your laptop. This puts the data at risk. What if your laptop is stolen? Uh oh!
In conclusion, there are many myths about records management that can have a significant impact on a company’s reputation and bottom line. Get your records management facts straight from the start, and you can avoid getting trapped in a records management debacle.